Land Swap shot down by consultant - Strike one!
- Thread starter PurpleHaze
- Start date
I refuse to look at any comments. This is a serious and maybe unrecoverable blow to a new arena, though. According to news on TV tonight, the city has no plan B. I really have to take some time to absorb this really bad news. Not that I wasn't at all prepared for this. I knew it was so complicated a plan as to be near impossible.
It just boggles the mind that other cities build sports/entertainment complexes without even having a pro sports team and Sacramento can't do anything. Hell, it boggles the mid what tiny little West Sacramento is accomplishing, while
Sacramento just stumbles around failing over and over to get much of anything done, arena aside.
It just boggles the mind that other cities build sports/entertainment complexes without even having a pro sports team and Sacramento can't do anything. Hell, it boggles the mid what tiny little West Sacramento is accomplishing, while
Sacramento just stumbles around failing over and over to get much of anything done, arena aside.
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Here's the Bee article today. Kamilos has added a new twist to the deal. I'm not optimistic, but it does change some of the negatives the consultant pointed out in his report. The new twist was to counter at least some of the issues. Partial quote:
Read more: http://www.sacbee.com/2010/09/15/3030112/consultants-report-may-undercut.html#ixzz0zcUY9X6y
Read more: http://www.sacbee.com/2010/09/15/3030112/consultants-report-may-undercut.html#ixzz0zcUY9X6y
Well the consultant recommended that the Cal Expo sell off about 125 acres of their present site to finance the work over a period of time. He thinks that's Cal Expo's best option.
We should here soon on how the dowtown railyards project is going to go. The current lender can foreclose, but they have to try and keep Thomas from declaring bankruptcy on the poject. Apparently the word now is that the lender may take over the project, but perhaps still give Thomas Enterprises a role in the development work. I would like an arena downtown, but the railyards project will eventually get done, with or without an arena.
We should here soon on how the dowtown railyards project is going to go. The current lender can foreclose, but they have to try and keep Thomas from declaring bankruptcy on the poject. Apparently the word now is that the lender may take over the project, but perhaps still give Thomas Enterprises a role in the development work. I would like an arena downtown, but the railyards project will eventually get done, with or without an arena.
While one does get oh so tired of proposal after proposal being shot down as the entire Sacramento area sinks back into cowtowndom with its arena falling apart, its fairgrounds falling apart, its major league sports team on the verge of leaving, and no vision as to how to arrest things, the above sounds VERY interesting, dependent as always on the Cal Expo board's willingness to give up control.
And I believe the potential involvement of VisionQuest is a recent development.
JB_kings: I've worked with development proposals for years, from a government prospective. Believe me, a proposal can go through many changes, before it actually gels to an acceptable project with firm financing lined up. Sometimes the whole deal ends up not looking much like the original proposal. Especially the financing part.
Not only that, but Kamilos' plan was very preliminary to begin with and had to be outlined in a hurry to meet the deadline for proposals set by the city. Same for all the proposals submitted.
As for Cal Expo giving up control, you'd think that would thrill them. Cal Expo has almost always struggled to remain financially viable to operate. They'd reduce administrative costs, get a guarantee to at at least break even every year with VisionQuest basically absorbing any potential losses. It would be interesting to see how they would work out future needs for capital improvements to the fair, though. And there's still the sticky question of who owns the land? The State or VisionQuest? I'm assuming Vision Quest.
JB_kings: I've worked with development proposals for years, from a government prospective. Believe me, a proposal can go through many changes, before it actually gels to an acceptable project with firm financing lined up. Sometimes the whole deal ends up not looking much like the original proposal. Especially the financing part.
Not only that, but Kamilos' plan was very preliminary to begin with and had to be outlined in a hurry to meet the deadline for proposals set by the city. Same for all the proposals submitted.
As for Cal Expo giving up control, you'd think that would thrill them. Cal Expo has almost always struggled to remain financially viable to operate. They'd reduce administrative costs, get a guarantee to at at least break even every year with VisionQuest basically absorbing any potential losses. It would be interesting to see how they would work out future needs for capital improvements to the fair, though. And there's still the sticky question of who owns the land? The State or VisionQuest? I'm assuming Vision Quest.
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A few thoughts,
First, Cal Expo has come to the conclusion that – there is more money and control if they do the redevelopment themselves. That’s probably logical and correct. Basically, Cal Expo Plan 1.0 called for a private developer to sell about 1/3 of the property with a new arena to be built there with part of the proceeds. The report calls for Cal Expo to “cut out the middle man” and build whatever they want on the remaining 2/3 owned by the state. I’d bet the board is willing to study the counter offer, but I think they probably pass. I'm not saying they are better suited to do this or will do a better job - but the report hits the point that, if done right, it's better for Expo to cut out the middle man. You can say the report is wrong ... but it's logical and the board will probably agree with it.
Second, as to the notion that the board members might be thrilled to give up control, I strongly doubt that. While Expo is languishing, the board members control the property and it gives them clout, pull, and prestige with the horse racing community and larger Sacramento community. The Kamillos counter offer basically calls for them to fire themselves and relinquish all of that. If the board can argue it’s not in the best interest of Cal Expo/the state, then I doubt they will be rushing to hand over their keys.
Even if they got Cal Expo back on board, the report could be a fatal blow. We’ve talked at length about the fact that: (1) many state reps will never vote for the state to get involved in the arena game; and (2) there are regions of the state that could benefit from this failing – ie Anaheim and San Jose. This report is 144 pages of amo that can be used to shoot down legislation in committee or on the floor. This is the real killer. The long odds of state approval … just got a lot worse.
First, Cal Expo has come to the conclusion that – there is more money and control if they do the redevelopment themselves. That’s probably logical and correct. Basically, Cal Expo Plan 1.0 called for a private developer to sell about 1/3 of the property with a new arena to be built there with part of the proceeds. The report calls for Cal Expo to “cut out the middle man” and build whatever they want on the remaining 2/3 owned by the state. I’d bet the board is willing to study the counter offer, but I think they probably pass. I'm not saying they are better suited to do this or will do a better job - but the report hits the point that, if done right, it's better for Expo to cut out the middle man. You can say the report is wrong ... but it's logical and the board will probably agree with it.
Second, as to the notion that the board members might be thrilled to give up control, I strongly doubt that. While Expo is languishing, the board members control the property and it gives them clout, pull, and prestige with the horse racing community and larger Sacramento community. The Kamillos counter offer basically calls for them to fire themselves and relinquish all of that. If the board can argue it’s not in the best interest of Cal Expo/the state, then I doubt they will be rushing to hand over their keys.
Even if they got Cal Expo back on board, the report could be a fatal blow. We’ve talked at length about the fact that: (1) many state reps will never vote for the state to get involved in the arena game; and (2) there are regions of the state that could benefit from this failing – ie Anaheim and San Jose. This report is 144 pages of amo that can be used to shoot down legislation in committee or on the floor. This is the real killer. The long odds of state approval … just got a lot worse.
I think the Vision Quest counter/proposal is a BIG twist, and a very GOOD twist as well. The fact that they would be the operators of Cal Expo during this whole thing, and the fact that they would 'stop the bleeding' during this whole process, AND their association with the Disney company...win/win IMO. September 24th just got THAT more interesting!
Circa, I don’t see it that way.
First, the Vision Quest thing doesn’t change the fact there is more money out there– while retaining control – if Cal Expo goes it alone. Bringing in another group merely deals with the deficit/transition issues that I’ve been talking about here for months. It doesn’t address the largest issue in the report - it’s a better deal to cut out the city and Kings.
The “new” plan works for Vision, Kamilos, the city and the Kings … but it’s not better for the people that will vote on the Expo board. Two years ago, the offer was “Hey we can spruce this up for you and put an arena on the land.” Then the convergence plan came along. The message to Expo changed "Sure, you are going to be in a smaller place, but it’s going to be very nice.” Now it’s – Why don’t we just take the control off your hands entirely – either for a while or forever. Not sure how that message would be more enticing to the board giving up control … particularly if they think the report gives them a basis to fix the problems themselves.
If anything, Cal Expo is saying – Thanks for the offer, but the first plan is the best, and we’ll try to do it without you at some point. Ie – we’ll just keep 100% of the Cal Expo value for ourselves and try to work it out.
The counter offer has more sweeteners … so they will probably study it (or maybe not) but I think the big issues remain.
And that’s the small hurdle. After the Expo vote, you now must convince a majority of the state legislature – not just to get into the arena game and sell this property - but to make the state fair basically a private entity in the process. And they need to do that with a report that says its more profitable for the state in the long term to say no. Every time they add a layer to this – it gets tougher.
First, the Vision Quest thing doesn’t change the fact there is more money out there– while retaining control – if Cal Expo goes it alone. Bringing in another group merely deals with the deficit/transition issues that I’ve been talking about here for months. It doesn’t address the largest issue in the report - it’s a better deal to cut out the city and Kings.
The “new” plan works for Vision, Kamilos, the city and the Kings … but it’s not better for the people that will vote on the Expo board. Two years ago, the offer was “Hey we can spruce this up for you and put an arena on the land.” Then the convergence plan came along. The message to Expo changed "Sure, you are going to be in a smaller place, but it’s going to be very nice.” Now it’s – Why don’t we just take the control off your hands entirely – either for a while or forever. Not sure how that message would be more enticing to the board giving up control … particularly if they think the report gives them a basis to fix the problems themselves.
If anything, Cal Expo is saying – Thanks for the offer, but the first plan is the best, and we’ll try to do it without you at some point. Ie – we’ll just keep 100% of the Cal Expo value for ourselves and try to work it out.
The counter offer has more sweeteners … so they will probably study it (or maybe not) but I think the big issues remain.
And that’s the small hurdle. After the Expo vote, you now must convince a majority of the state legislature – not just to get into the arena game and sell this property - but to make the state fair basically a private entity in the process. And they need to do that with a report that says its more profitable for the state in the long term to say no. Every time they add a layer to this – it gets tougher.
From the SNR story last week:
And while the consultant’s report was due out in late August, Kamilos asked Plescia for a little more time. He wanted the consultant to include some additional information from another player in the Convergence plan called VisionMaker Worldwide, a theme-park developer run by former Disney and Universal executives.
“Certainly our team is convinced that there are no other options that will deliver a new state fair as quickly as our plan,” Kamilos explained.
But there’s a good chance that the Plescia report—now due no later than September 14—says it makes more sense for the state fair to go it alone. If that’s the case, it could be the end of Convergence, though Kamilos says it’s not do or die.
“I have no idea what happens to the Cal Expo portion at that point,” Kamilos said. “We would have to retool the model.”
And there we go. We already knew that the first draft of the report wasn't great and Kamilos was floating a new idea to improve it. Looks a lot like the first conclusion stuck and Kamilos has to/is trying to make a better counter. Therefore, most of this isn't new. It's just coming to the surface.
Since the board might be able to control as much as 100% of Cal Expo's value and Kamilos can only offer the board a small part of that value ... I see a problem.
Kamilos worked hard to get ahead of/cut off this report and it didn't happen.
And while the consultant’s report was due out in late August, Kamilos asked Plescia for a little more time. He wanted the consultant to include some additional information from another player in the Convergence plan called VisionMaker Worldwide, a theme-park developer run by former Disney and Universal executives.
“Certainly our team is convinced that there are no other options that will deliver a new state fair as quickly as our plan,” Kamilos explained.
But there’s a good chance that the Plescia report—now due no later than September 14—says it makes more sense for the state fair to go it alone. If that’s the case, it could be the end of Convergence, though Kamilos says it’s not do or die.
“I have no idea what happens to the Cal Expo portion at that point,” Kamilos said. “We would have to retool the model.”
And there we go. We already knew that the first draft of the report wasn't great and Kamilos was floating a new idea to improve it. Looks a lot like the first conclusion stuck and Kamilos has to/is trying to make a better counter. Therefore, most of this isn't new. It's just coming to the surface.
Since the board might be able to control as much as 100% of Cal Expo's value and Kamilos can only offer the board a small part of that value ... I see a problem.
Kamilos worked hard to get ahead of/cut off this report and it didn't happen.
I agree that Cal Expo probably won't go for the change in plan, because they still may want to go it alone. Realize, however, that the consultant's plan will take quite a few years to result in rehab of Cal Expo as he talks about the needed work being done incremently. I think that would be very disappointing if Cal Expo gets "updated" that way, regardless of the arena. That's hardly a grand re-invisioning of Cal Expo. Its a typical, boring, government kind of proposal. Take a look at most State buildings and you'll see the utter lack of creativity in government architecture designed generally to be cheap. Sacremento gets screwed, becasue legislaters don't care what Sacramento looks like as a city, when deciding what to approve in design. The city has no control over the design.
I agree, too, that the Board likes their jobs. They'll think that whether its financially good for Cal Expo or not. That's politics.
If the convergence goes away, then Kamilos' proposal is dead. Or you'd have to do another request for proposals, in order to give other people a chance to come up with something else, too. However, none of the other proposals submnitted along with Kamilos' prtoposal had the financing problem adequately resolved. I think we're pretty much out of time.
And again, even if Kamilos can sell something to the Cal Expo board, the legislature's going to be the really hard hurdle to get over.
I agree, too, that the Board likes their jobs. They'll think that whether its financially good for Cal Expo or not. That's politics.
If the convergence goes away, then Kamilos' proposal is dead. Or you'd have to do another request for proposals, in order to give other people a chance to come up with something else, too. However, none of the other proposals submnitted along with Kamilos' prtoposal had the financing problem adequately resolved. I think we're pretty much out of time.
And again, even if Kamilos can sell something to the Cal Expo board, the legislature's going to be the really hard hurdle to get over.
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They never really had a ball to begin with. No idea of how to fund the construction. They just were throwing out ideas about using the land north of the current arena to build on. It was pretty much the Natomas Chamber of Commerce throwing out ideas that had no solid funding identified. They threw Magic Johnson's name in there as somebody who might be interested in development in the project. But there was nothing concrete that I read.
A CoC has nothing to work with and they probably far exceeded their budget in just making some PR announcements about having a plan back then. The City of Sac owns the Natomas land. There isn't enough there to divide into a new arena and be able to sell off or develop the rest to offset the cost of building a new arena. Pretty much they are at square one like everyone else with no idea how to fund this thing.
The best hope is for the revamped plan that Kamilos is rolling out to have more legs than the last one.
A CoC has nothing to work with and they probably far exceeded their budget in just making some PR announcements about having a plan back then. The City of Sac owns the Natomas land. There isn't enough there to divide into a new arena and be able to sell off or develop the rest to offset the cost of building a new arena. Pretty much they are at square one like everyone else with no idea how to fund this thing.
The best hope is for the revamped plan that Kamilos is rolling out to have more legs than the last one.
We are one of the largest cities in the nation to still have a weak mayor system. We should have switched to a strong mayor system years ago. Of course, the other council members have to vote for it. Hard to get them to give the mayor more power, but it is why nothing gets done and Sacramento ends up the least controversial, most boring options as far as planning, design and vision for the city. It verges on the edge of no plan, no progress. KJ is really just a council member with a few extra powers. Very few.
Yeah, it's in the Bee article from yesterday, Kamilos has a company called VisionQuest on board to finance($150 million)/operate the State Fair at the new Natomas site should Cal Expo want to play along with the convergence deal still. VisionQuest has ties with the Disney and Univeral companies in the past in running amusement and theme parks. But you have to look on the back page of the article to get THAT...it's not like the Bee would put the GOOD stuff on the front page with the 'THUMBS DOWN' headlines. 
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