http://www.sacbee.com/101/story/29290.html
Maloofs' demands for arena unusual
No other NBA teams have similar deals, a sports economist says.
By Mary Lynne Vellinga and Terri Hardy - Bee Staff Writers
Last Updated 12:32 am PDT Tuesday, September 26, 2006
Kings owners Joe and Gavin Maloof are seeking concessions from Sacramento that appear unprecedented in the world of NBA arena construction.
The Maloofs walked out of negotiations earlier this month, saying local officials reneged on giving them 8,000 parking spaces and a final say on what new restaurants or businesses would open next to the arena proposed for the downtown railyard.
Andrew Zimbalist, a sports economist at Smith College in Northampton, Mass., said he could think of no new NBA arena deal anywhere in the country that has anywhere near 8,000 spaces, an assertion supported by Bee visits to new arenas in Memphis, Tenn., and Indianapolis. "That seems excessive," Zimbalist said.
He also said he knew of arena owners who were able to prevent snack carts from operating outside the front doors but not restaurants.
Sacramento officials deny they made such promises, pointing out that there's no mention of them in the term sheet signed by the Maloofs and city and county negotiators.
In response to the Maloofs' angry exit, officials have gone back to the drawing board with railyard developer Thomas Enterprises to address some of the family's concerns. But 8,000 parking spaces aren't likely to be forthcoming.
Sacramento Assistant City Manager John Dangberg said he has been in contact with Kings President John Thomas, signaling a thawing of relations. Dangberg said a revised site plan from arena architect Ellerbe Beckett should be ready for delivery to the Maloofs by midweek.
On Monday, Joe Maloof reiterated his version of events. "We're truthful people; we don't lie," he said.
He insisted local officials went back on a promise on the parking issue, and said they also promised his family the right to approve businesses that could end up competing with those they want to open on the arena/entertainment center's ground floor.
Yet the concessions the family seeks would be highly unusual in the NBA today. The parking deal far surpasses the number of spaces that normally come with a publicly financed arena and could boost the cost of a $500 million arena by $135 million.
"It would be unprecedented, certainly for a downtown location," said Sacramento County Supervisor Roger Dickinson, who represented the county in the negotiations.
One of the people responsible for bringing the Vancouver Grizzlies to Memphis said the Maloofs' insistence on 8,000 paid parking spaces would have been unthinkable to leaders there, where a $250 million arena opened in 2004. "I don't know how the city and county could ever agree to those terms," said Tom Jones, former senior adviser to the Shelby County mayor.
Joe Maloof said Monday that his team needs the money from 8,000 spaces -- the same number that regularly fill for events at Arco Arena in Natomas. Today, the team controls more than 11,000 surface parking spaces around Arco Arena, which was built with private money.
"We thought we had an agreement with the city and county that all the parking revenue would stay with the team, which is what we need," Maloof said.
Thomas, team president, said the Kings would be taking a big chance in moving to the railyard and need to protect their revenue and have some control over what moves in next door. "There's a huge difference between this project and virtually any other," he said. "We're moving a thriving business into an open field that today is a toxic wasteland."
Parking is worth millions of dollars annually to the Maloofs. It costs $10 to park at Arco Arena today. If the new arena hosted 200 events a year, a conservative figure, and filled 5,000 spaces each time, the Kings would earn $10 million a year from parking.
The figure would go much higher if the team controlled the parking during the day, renting it to downtown office workers.
Dickinson said event parking rates probably would go up to at least $15 as well.
Most new downtown sports venues control few parking spaces compared with the number of people attending events.
The San Francisco Giants get the revenue from 5,000 spaces, Dickinson said, but they have a seating capacity of 41,503, compared with about 18,000 seats planned for the new Kings arena.
The new arena built in Charlotte, N.C., contains no on-site parking. In Memphis, the 2-year-old FedExForum, cited by the Maloofs as a model for their arena, includes 1,300 VIP parking spaces in a garage next door.
The Indianapolis Pacers have a right to use 1,400 parking spaces in a city garage adjacent to Conseco Fieldhouse but don't get the money from them, said Rick Fuson, executive vice president.
Local officials said surrounding a downtown arena with parking defeats one of its main purposes -- to help enliven the area around it. If the Kings relocate downtown, officials hope that at least some patrons will take light rail rather than driving.
A report released Monday by Sacramento Regional Transit found that a significant portion of fans -- up to 41 percent in the case of AT&T Park in San Francisco -- take public transit to new downtown sports facilities.
City and county negotiators say they told the Kings that if voters approved a quarter-cent sales tax in November, about $45 million of the money raised would go to pay for a new garage next to the arena with about 2,000 parking spaces. The team would get the money from those spaces.
Even 2,000 parking spaces is generous compared with the parking provided for owners of other NBA teams, such as those in Memphis and Indianapolis. In those cities, owners have tapped other revenue streams, seemingly finding corporate sponsors for every inch of their space.
The Memphis arena's parking garage is sponsored by Ford Motor Co. FedEx not only holds the naming rights to the arena in Memphis, it also sponsors a level of luxury suites in Indianapolis. Meanwhile, patrons park in spots vacated by daytime commuters.
Memphis has a "car culture" like California's, and most fans drive to games, said Andy Dolich, the Grizzlies' president of business operations. Workers at corporations such as AutoZone Inc. and First Tennessee Bank often leave their cars at work and walk to the arena.
The Maloofs' demand that they control which businesses locate outside their front door is also unusual.
On Beale Street in Memphis, the restaurants are part of the draw. "Other (team) owners would love to have their own Beale Street," Dolich said.
The Pacers' Fuson said his team also benefits from being in the heart of a lively, restaurant-filled downtown. But he did not cast judgment on the Maloofs for trying to extract every dollar of revenue they can.
A new arena is no guarantee of economic success, he said. When it opened in 1999, Conseco Fieldhouse attracted sellout crowds. But attendance has fallen in recent years. Memphis, too, has seen crowds dwindle.
"I would advise anyone in our business to get whatever they can," Fuson said.
About the writer: The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga@sacbee.com.
Maloofs' demands for arena unusual
No other NBA teams have similar deals, a sports economist says.
By Mary Lynne Vellinga and Terri Hardy - Bee Staff Writers
Last Updated 12:32 am PDT Tuesday, September 26, 2006
Kings owners Joe and Gavin Maloof are seeking concessions from Sacramento that appear unprecedented in the world of NBA arena construction.
The Maloofs walked out of negotiations earlier this month, saying local officials reneged on giving them 8,000 parking spaces and a final say on what new restaurants or businesses would open next to the arena proposed for the downtown railyard.
Andrew Zimbalist, a sports economist at Smith College in Northampton, Mass., said he could think of no new NBA arena deal anywhere in the country that has anywhere near 8,000 spaces, an assertion supported by Bee visits to new arenas in Memphis, Tenn., and Indianapolis. "That seems excessive," Zimbalist said.
He also said he knew of arena owners who were able to prevent snack carts from operating outside the front doors but not restaurants.
Sacramento officials deny they made such promises, pointing out that there's no mention of them in the term sheet signed by the Maloofs and city and county negotiators.
In response to the Maloofs' angry exit, officials have gone back to the drawing board with railyard developer Thomas Enterprises to address some of the family's concerns. But 8,000 parking spaces aren't likely to be forthcoming.
Sacramento Assistant City Manager John Dangberg said he has been in contact with Kings President John Thomas, signaling a thawing of relations. Dangberg said a revised site plan from arena architect Ellerbe Beckett should be ready for delivery to the Maloofs by midweek.
On Monday, Joe Maloof reiterated his version of events. "We're truthful people; we don't lie," he said.
He insisted local officials went back on a promise on the parking issue, and said they also promised his family the right to approve businesses that could end up competing with those they want to open on the arena/entertainment center's ground floor.
Yet the concessions the family seeks would be highly unusual in the NBA today. The parking deal far surpasses the number of spaces that normally come with a publicly financed arena and could boost the cost of a $500 million arena by $135 million.
"It would be unprecedented, certainly for a downtown location," said Sacramento County Supervisor Roger Dickinson, who represented the county in the negotiations.
One of the people responsible for bringing the Vancouver Grizzlies to Memphis said the Maloofs' insistence on 8,000 paid parking spaces would have been unthinkable to leaders there, where a $250 million arena opened in 2004. "I don't know how the city and county could ever agree to those terms," said Tom Jones, former senior adviser to the Shelby County mayor.
Joe Maloof said Monday that his team needs the money from 8,000 spaces -- the same number that regularly fill for events at Arco Arena in Natomas. Today, the team controls more than 11,000 surface parking spaces around Arco Arena, which was built with private money.
"We thought we had an agreement with the city and county that all the parking revenue would stay with the team, which is what we need," Maloof said.
Thomas, team president, said the Kings would be taking a big chance in moving to the railyard and need to protect their revenue and have some control over what moves in next door. "There's a huge difference between this project and virtually any other," he said. "We're moving a thriving business into an open field that today is a toxic wasteland."
Parking is worth millions of dollars annually to the Maloofs. It costs $10 to park at Arco Arena today. If the new arena hosted 200 events a year, a conservative figure, and filled 5,000 spaces each time, the Kings would earn $10 million a year from parking.
The figure would go much higher if the team controlled the parking during the day, renting it to downtown office workers.
Dickinson said event parking rates probably would go up to at least $15 as well.
Most new downtown sports venues control few parking spaces compared with the number of people attending events.
The San Francisco Giants get the revenue from 5,000 spaces, Dickinson said, but they have a seating capacity of 41,503, compared with about 18,000 seats planned for the new Kings arena.
The new arena built in Charlotte, N.C., contains no on-site parking. In Memphis, the 2-year-old FedExForum, cited by the Maloofs as a model for their arena, includes 1,300 VIP parking spaces in a garage next door.
The Indianapolis Pacers have a right to use 1,400 parking spaces in a city garage adjacent to Conseco Fieldhouse but don't get the money from them, said Rick Fuson, executive vice president.
Local officials said surrounding a downtown arena with parking defeats one of its main purposes -- to help enliven the area around it. If the Kings relocate downtown, officials hope that at least some patrons will take light rail rather than driving.
A report released Monday by Sacramento Regional Transit found that a significant portion of fans -- up to 41 percent in the case of AT&T Park in San Francisco -- take public transit to new downtown sports facilities.
City and county negotiators say they told the Kings that if voters approved a quarter-cent sales tax in November, about $45 million of the money raised would go to pay for a new garage next to the arena with about 2,000 parking spaces. The team would get the money from those spaces.
Even 2,000 parking spaces is generous compared with the parking provided for owners of other NBA teams, such as those in Memphis and Indianapolis. In those cities, owners have tapped other revenue streams, seemingly finding corporate sponsors for every inch of their space.
The Memphis arena's parking garage is sponsored by Ford Motor Co. FedEx not only holds the naming rights to the arena in Memphis, it also sponsors a level of luxury suites in Indianapolis. Meanwhile, patrons park in spots vacated by daytime commuters.
Memphis has a "car culture" like California's, and most fans drive to games, said Andy Dolich, the Grizzlies' president of business operations. Workers at corporations such as AutoZone Inc. and First Tennessee Bank often leave their cars at work and walk to the arena.
The Maloofs' demand that they control which businesses locate outside their front door is also unusual.
On Beale Street in Memphis, the restaurants are part of the draw. "Other (team) owners would love to have their own Beale Street," Dolich said.
The Pacers' Fuson said his team also benefits from being in the heart of a lively, restaurant-filled downtown. But he did not cast judgment on the Maloofs for trying to extract every dollar of revenue they can.
A new arena is no guarantee of economic success, he said. When it opened in 1999, Conseco Fieldhouse attracted sellout crowds. But attendance has fallen in recent years. Memphis, too, has seen crowds dwindle.
"I would advise anyone in our business to get whatever they can," Fuson said.
About the writer: The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga@sacbee.com.
