We have long opposed of the construction of an arena in downtown Sacramento. We have argued need, cost, and investment to the community. This financially strapped city had spent more than a million dollars on studies related to the Arena.
The Railyards
Through the years there have many locations considered for a new Arena including Downtown Plaza. However, city leaders believed an Arena for the Sacramento Kings in the Railyards would serve as a catalyst for the development.
Last year after all the pieces were in place to build an Arena in the Railyards, at the eleventh hour, the Maloof Family owners of the Sacramento Kings and the Arena in Natomas withdrew from the project. Before the withdrawal, the project had the support from business leaders.
But there where questions. Was the parking financing plan overly optimistic? With no adjacent parking , what impact would the Arena have on surrounding businesses. Economist Christopher Thornberg study(1) seems to conclude ,the entire financing for the Railyards was too risky for Sacramento.
A Fresh Pair of Eyes
Most Arenas and Stadiums constructed specifically for professional sports have short life spans. The average age for Arenas is 27 years and 32 years for Stadiums. Sacramento’s Memorial Auditorium was built in 1926, the Bill Graham (Formally San Francisco) Civic Auditorium built in 1915 . Both building continue to host venues.
Last Summer, San Francisco based JMA Ventures an Real Estate Investment Firm bought the Downtown Plaza. In January,JMA said it was interested in building an arena at Downtown Plaza. The plans weren’t contingent on a professional sports franchise.
We were initially encouraged. We fantasized about a multi-use arena with smaller rooms and theaters,hosting meetings, small concerts generating daily traffic .
New reports seems to indicate the Kings would be apart of the project.
Through the years Downtown Plaza has been considered a potential site for an arena.
The City of Sacramento should not be in the Arena Business
The Plaza vs The Railyards is a no brainer Infrastructure , Parking, Hotel’s ,Freeway close and Transit vs none of those things at the Railyards. The financial component at Railyards is very fragile relying on many components and should any of those pieces fail, the taxpayers of Sacramento will make up the difference.
(2)Because it’s private property, a mall conversion would be spared much of the red tape involved at the city-owned arena site in the railyard. Building at the railyard would require various approvals from Amtrak, Union Pacific and the U.S. government, which has earmarked millions of dollars for a future transportation hub.
(3) JMA did a feasibility study on putting an arena there. A spokesperson for JMA says they have gotten calls from potential partners in building an arena there. However, the JMA spokesperson said they aren’t considering putting up money for a stake in the team itself.
Sacramento City Manager John Shirey city manager says he is prepared to pay for another feasibility study, costing up to $100,000. Another June 2004 study said the Downtown Plaza was not feasible to build an arena on because of its then-owner. Skip ahead to 2009, where a new arena task force was considering the mall again.
$100,000 is only money in this cash strapped city. A city that has spent over a million dollars to retain a money losing NBA franchise. A franchise that owes the city 77 million dollars. Unlike the Railyards, Downtown Plaza is privately owned.
The Asterisk* and the Stockton Promise
Most Sacramentians are satisfied with The Sleep Train Arena( formally Arco) locations. parking and freeway accessibility being its best feature. easy access to freeways. The owners (The Maloof family) has done little in the way of upgrades. Parking will be a challenge downtown. With one freeway entrance and exit downtown ,gridlock is guaranteed, the impact on business could be severe on event days.
Being a realist, there will be public money involved. Conventional wisdom says the city says would make a financial commitment similar to what was offered to the railyard development last spring: a $255 million public subsidy from the city’s parking revenue.
Voter should approve subsidy’s over $100 million dollars in a calender year.
Stockton’s Arena, Ballpark and Marina is beautiful. The citizens of Stockton were told, the complex would stimulate downtown. Taxes generated by those new businesses and visitors to Stockton made the entertainment complex a must build. The eight year old complex has never made a profit and loses and estimated 3 million dollars a year .
CityFella,
(1) http://www.stoparenasubsidy.com/stoparenasubsidy.com/links_files/kings_conference_beacon_report.pdf
(2)http://www.sacbee.com/2013/02/03/5161046/both-downtown-plaza-and-sacramento.html
(3)http://fox40.com/2013/01/13/downtown-plaza-in-play-for-new-sacramento-arena/
CityFella
Shlomo von Glickstein
February 12, 2013
Your rationale for city investment for an arena lacks at least two insights:
1) This project is not feasible without at least HALF of its cost provided through public subsidy;
2) This project is not feasible without a pro sports team franchise in the locality.
This project is being driven by Goldman Sachs, who is driving Mayor Pedo to drive the city of Sacramento into bankruptcy, and permanent indentured servitude of its citizens to Wall Street.
A much better proposal is being brought by the owners of the River Cats to open a soccer franchise, using the vastly underutilized Hughes Stadium as its venue. It asks for little or not public subsidy at all.
The city is broke — with $2 billion in underfunded pension liabilities and long term debt already sustained, and $2.5 billion in infrastructure improvements necessary to provide basic services… The city cannot participate responsibly…
JMA purchased DP for a song, realized it overpaid and overpromised, and when the opportunity to penetrate public subsidies for an arena use, rather than waiting for RDA funding for repurposing the site for much needed affordable housing, as is being developed in the immediately adjacent area, it glommed on to the corporate welfare teet like a newborn…and its feasibility ‘study’ failed to include the capacity of the city to assume greater debt load…
Arenas do not make great cities — they usually bankrupt them, and Goldman has a trail of such cities in its wake…
Just when is Sacramento going to finally oust this serial child molester from public service who seeks to straddle the city with unending mountains of debt to serve his corporate right backers????
cityfella
February 12, 2013
One of the casualties of the economic crises is publicly funded Arenas and Stadiums. In the last three years Owners have significantly contributed to the building of the last five Arenas and Stadiums. For the first time owner have signed 30 to 50 year leases. This is unprecedented. For years municipalities mortgaged the farm and grandma for a professional sports franchise.
The Maloofs walking away from a such lucrative deal spoke volumes about their balance sheet. We will soon see they had sell the Kings. Virginia Beach was a desperate act.
In Anaheim, I believe they would have eventually lost the team.
Sacramento is/was the only city-still willing to mortgage the farm.
The Proposed New Arena in San Francisco is private money(the city will give them the Pier next to ATT park) Chris Hansen (the deep pockets wanting to buy the Kings for Seattle) says he has the money to build an new Arena. (he’s bought the land-downtown-across from Safco’s Field Parking garage.
So the question in Sacramento, is there still support for leasing the garages?
Is there a plan B?
jcmarckx2009
February 12, 2013
Hi, I’d like to nominate your blog for the Liebster Award. I find your blog consistently engaging, and I’m not just saying that because you are a fellow Sacramentan!
Please let me know if this okay.
cityfella
February 14, 2013
Where do I mail the check……. Thank You (very kind)
Robert
March 4, 2013
Build it in the Railyards,, the suitable place!
valburt
March 5, 2013
Fix and Remodel Arco….Why do poor people have to pay for castle for billionaires….. Kevin Johnson is tool….and should have stayed in Phoenix.