Build the Arena at Downtown Plaza*


7W3PLAZA

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.

See: https://sacratomatovillepost.com/2010/05/02/my-eyes-have-seen-the-future-keep-the-arena-at-the-arco-site/

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

6 Comments

  1. 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????

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    1. 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?

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  2. 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.

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  3. 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.

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