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January 10, 2012
Sacramento solicits bids for parking money to fund Kings arena
The city of Sacramento is moving ahead with that plan to solicit bids for its future parking revenues, issuing a request for qualifications to see who's interested in coughing up $200 million that could be used (part of it, anyway) towards a new Kings arena. City officials plan on presenting a list of qualified bidders to the city council by February 14, at which point the council can issue a formal request for proposals (i.e., honest to goodness bids, not just expressions of interest) that would take several months.
That timetable would seem to be a problem if you read the Sacramento Bee's description of the "impending March 1 deadline from the National Basketball Association for the city to come up with a financing plan for the $387 million facility," after which the league "would give the owners of the Sacramento Kings the freedom to once again explore moving the franchise." Except, of course, that the Kings owners have already said that that deadline isn't to be taken seriously. Unless you're a newspaper writer, that is.
In any case, it's still not clear that the city council will approve this whole mess, given that it would blow a $9 million a year hole in the city budget from now until the end of time. But right now it's the only straw Mayor Kevin Johnson's arena plan has to cling to, so cling they will — at least until the next arena plan with no idea for how to pay for it is ready.
We were told that by December 13, there'd be a funding plan in place, and that the days leading up to March 1, we'd just be putting things together. But so far, we have a $406M arena estimate (that was updated from $387M weeks ago), an existing $67M in bonds that won't go away when the Kings move, and a parking plan that may result in $133M net to the City (parking meters cannot be included in the lease-out, and the Council and Bee reporters KNOW this; and once they lease out the parking, they are required by law to pay off $52M in existing bond debt: $185M - $52M = $133M net).
Not to mention the $9M structural deficit this would create. And talking about 50 years as the term on this parking lease-out, when we are pretty sure they'll be pestering us again for a new arena within 15 years.
And still no talk about how much the Maloofs are willing to pay up-front.
Oh, and we're 51 days away from the March 1 deadline.
No problem.
Posted by MikeM on January 10, 2012 12:16 PM
Give billions of dollars to support this epic franchise.
Posted by Suckcramento Queefs on January 10, 2012 12:34 PM
Hopefully the council and city staff is spending most of their time on this very important matter...
Posted by santa clara jay on January 10, 2012 05:26 PM
Good news is as long as they keep making progress the March 1 deadline isn't much of a deadline.
Posted by Dan on January 10, 2012 06:07 PM
There was one semi-interesting development on this yesterday. Two, actually.
1) KJ had a pretty scathing interview with the Bee editorial board in which he said the delay from Dec 22 until Jan 9 "sent the wrong message" to the NBA, but then he noted that the deal is a mere $50M from being fully-funded (I stand by analysis above; I believe the gap is over $233M by a fair amount).
2) KJ withdrew an item on the Council Meeting agenda to discuss a no-cost contract with BofA and Walker Parking to help evaluate the RFQ responses. No reason was given, but you can see how this would open the door to speculation. That's a bad development, because the RFQ submission deadline is January 30, and the City won't be equipped to evaluate these RFQ's on their own.
We're getting more and more deadline slippage. March 1 isn't that long from now. I guess it's a good thing this is a leap year.
Posted by MikeM on January 11, 2012 04:22 PM
Well, look here, Sacbee is running a poll on what to do about the parking:
blogs.sacbee.com/city-beat/2012/01/city-beat-poll-what-to-do-with-downtown-parking-assets.html
For what it's worth, I think newspaper polls are notoriously unreliable.
Posted by MikeM on January 12, 2012 04:40 PM
It turns out that, yup, newspaper polls are notoriously unreliable. Take a look at the comment thread in that story and you can see what happened. A well-known member of the local media decided to manipulate the poll. To me, it makes no sense that someone with a fairly high local profile would do something like that. He's going to get taken to task for that.
Anyway, now a member of the County Board of Supervisors is getting nervous:
www.sacbee.com/2012/01/13/4184432/serna-floats-backup-option-for.html
A little context is in order here. Near the bottom of the article, it is disclosed that they haven't started working on the term sheets yet. They're deferring that until late February. Given that the deadline is March 1, I think that presents a problem. Kevin Johnson earlier this week said that the two sides are $50M apart. How in the world does he know if the two sides are $50M apart if there are no term sheets yet?
I can tell you that the two sides are a mere $5,000 apart to purchase my next Ferrari as often as I want, but that doesn't mean a thing if I've never been to the dealership.
Posted by MikeM on January 13, 2012 11:53 AM
It is curious that the other comments here make incidental complaints about time-squeezing, and a few misc. items. But none of them expresses solid opposition to this latest scheme of the city, a few wealthy individuals and developers and a handful of noisy cheerleaders in purple shirts.
There have been a dozen other failed schemes over the past decade, but none have been so lame as to risk the city's future and the only dependable revenue stream it has left (its parking concessions) to leverage this deal. From beginning to end, from over-hyping jobs and receipts, non-existent regional interest, failures to attract solid private investment (which should tell everyone something about the real gamble it is), and a dozen other doubtful issues, this is a swindle lead by the usual NBA's self-interest that cares nothing about what happens to the city.
Even the time-table is the usual high-pressure sales tactic that the NBA uses to get cities to jump before they've thought things through. Personal Seat Licenses is the only driver on their bus, and does nothing to get fans to the game. After all is said and done, less that 15% of the city are Kings fans or care about the arena.
Anyway, the curious thing is that there does not seem to be any organized opposition to the deal. I don't know if someone has a last minute monkey wrench to throw at it, but I sure hope so. This is a real cesspool-of-schemes, but no one seems to be doing anything to stop it. As for the Sac
Bee, their in somebody's hip pocket and haven't said boo against the idea and print nothing that dares raise serious questions. Typical of the Bee, but it doesn't help much to get a critical look at things. Strange deal all around. Maybe it is what Sacramento deserves, but that doesn't make me like it any better.