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April 18, 2012
KJ: Damn the Kings, full speed ahead on arena
I don't even know what to say about this:
With the Sacramento Kings out of the city's arena equation, Mayor Kevin Johnson wants the city to spend the next two to three weeks exploring building a new downtown sports arena, "with or without an anchor tenant."
At a morning press briefing at City Hall, the mayor said that facility might be a scaled-down version of the $391 million facility initially proposed for the Sacramento Kings. He said it could be designed to accommodate expansions.
"This is bigger than basketball," he said. "I still believe that."
Okay, I can come up with a couple of things to say. First off, Johnson goes on to suggest that Sacramento pursue the "Kansas City model": This, as you'll recall from previous posts, involves building an arena with no team to play in it, spending $13.8 million a year on construction debt, and bringing in $1.8 million in revenue from concerts and the like. Profit!
Second, what we now have here is a mayor who, pressed to solve the problem of how to build a new arena so that an NBA team can increase its profits, is now dead set on building a new arena without a team of any kind so that ... I guess just so that he can have a new arena. Either KJ has started to believe his own press releases about economic impact, or he thinks that once it's clear that he intends to go charging ahead after his own windmills, the Maloofs will have second thoughts about defriending him. One of those is definitely crazier than the other, but I'm not prepared to say which.
"Following the KC model", if KJ really means it, may not be bad news. That would imply two tax hikes to go towards the voters. I can't see either of these passing.
And just look at what's happening near Las Vegas now:
www.lasvegassun.com/news/2012/apr/17/proposed-henderson-arena-keeps-clearing-hurdles/
That was under-the-radar... Talking with 3 NBA teams?
Posted by MikeM on April 18, 2012 03:25 PM
I realize it is pie-in-the-sky but would Sacramento State's basketball team be a viable "tenant"? Sacramento State should have a team on the level of a Fresno State, another CSU school in the San Joaquin Valley but with nowhere near the economic power of Sacramento.
Sacramento State is in dire need of new basketball facility. Maybe KJ and the school can get together...
Posted by Dean on April 18, 2012 06:53 PM
KJ's idea may or may not work out, but this much is true:
1) L.A. had no downtownt nightlife and minimal condo/hotel/apartment options to speak of before Staples Center.
2) L.A. now has nightlife and condo/apartment/hotel options in spades.
3) Promoters of concerts, sporting events, pro wrestling, etc. would love to go somewhere besides the antiquated PB Pavilion when in Sacto.
I may be substituting coincidence for causality with numbers 1 and 2, but who knows? It is also possible that the overall tax receipts from the P&L district make the K.C. arena a better proposition that a $12M/yr loser. (And I understand the substitution effect, but I also believe many economists overstate its power.)
Posted by Ben Miller on April 18, 2012 08:30 PM
He's lost his mind!
Also, the only reason PB Pavilion may be antiquated is because the owners put no money back into renovating it! The Palace of Auburn Hills looks great, not because it's a timeless arena, but because the owner kept putting money into upkeeping the place. Most owners want the government to pay for everything. They're sick.
In my city, there is a local arena. It's been standing for years. It is dated. However, because there are no diva sports teams to demand new arenas, no one has any problems with it. It gets all sorts of shows and events. If there are any problems, things get updated and fixed. I like the charm of old arenas. To millionaires and billionaires, spending 2 hours there is akin to sleeping in the local shelter. If they want new arenas, they should pay for them or get lost.
Posted by Roger C. on April 18, 2012 09:31 PM
This is probably my favorite national editorial regarding the arena in Sacramento:
www.bloomberg.com/news/2012-04-16/sacramento-is-fresh-victim-of-bad-stadium-deals.html
I'm pretty amazed at the scorched-earth campaigns everyone seems to be using now. Are references to North Korea really necessary? Does a group of fans really need to ask the Maloofs to make a three-year pledge?
No diplomacy at all. It almost seems like the Maloofs are the most diplomatic group of them all. But now that KJ seems to be making an effort to proceed with an arena with or without a tenant, I hope he knows this means that this will mean the City is paying for 100% of the arena, and that the Maloofs will certainly be willing to work with that idea. KJ just isn't being very smart here.
Anyway, it appears that building an arena would cancel the remainder of the Maloofs' current debt. So not only would the Maloofs not contribute $73M to the new arena, they'd have their $76M debt cancelled if KJ succeeds. My guess is that the Maloofs would stick around for that. But I also don't think they'd have 5 votes on the Council for that.
All KJ needs to justify the additional $149M hit to the City: "Think of the $7B! This is a small price to pay!".
Posted by MikeM on April 19, 2012 02:14 PM
The KC arena is paid for from tourim and rental car fees...not the City general revenue. It has been a great success, without an anchor team...the fifth busiest events venue in the nation, in the 32nd largest market.
Posted by Bob on April 20, 2012 02:00 PM
It's paid for by taxes that could go into the general fund if they weren't earmarked for an arena - I think that's pretty much the definition of general revenue. And while it's a great success in terms of booking events, that hasn't come anywhere near paying off its construction cost.
Posted by Neil deMause on April 20, 2012 03:13 PM
Today, Mayor KJ flew to Las Vegas to meet with George Maloof at the Palms unannounced. George greeted him graciously and then they talked for an hour. Eric Rose, the Maloof family spokesman, said that nothing definitive came from the meeting. The Mayor's office said it was a "productive" meeting.
Talk about pathetic desperation. This impulsive behavior is not the stuff of a true leader. He needs to let it go and start being mayor again fixing potholes.
Posted by Cal on April 21, 2012 01:45 AM
What was revealed during the email/document skirmish in the wake of the Maloof's press conference following the NBA BOG meeting is that KJ LIED to fellow council members -- "for political reasons" -- failing to reveal terms that were proposed and assented to but never told to decision makers in the lead up to the council's vote on KJ'S ARENA SCAM...
...and these lies could very well be actionable -- criminally...
I believe that his last gasp to Vegas to meet with the Maloof's had more to do with THIS than the failed arena attempt...
Posted by bbbbmer on April 23, 2012 08:05 AM