Recap of Oct. 26th City Council meeting

[Mike0476]

I attended tonight's meeting and recorded it but since I was sitting in the last row the volume was not that good. So instead I'll provide a brief recap.

A man talked about the arena efforts and related it to Kevin Johnson with different songs such as 'Tubthumping' by Chumbawamba (I get knocked down but I get up again), Rolling Stones and I forget what else. Despite the weird message he tried to send, he does want to see a new arena.

A woman was next and she summarized what we already know in the Convergence plan (how it was going to work and how it failed). Gerry Kamilos was in attendance.

Another woman then came up to speak for the Natomas group. She mentioned all the positives of building a new arena in the Natomas area because it already has the infrastructure, restaurants, hotels, housing, etc.

Mayor Kevin Johnson thanked Gerry Kamilos and his Convergence group for thinking outside the box and their contributions in trying to make this work. He also mentioned he has already spoken to the CEO of Inland, the company who purchased the rail yards. He would still like the arena to be located there.

The Convergence group will have a new modified plan within 90 days.

The City Council will meet again to discuss this issue and look over all the proposals on January 11th or 18th.

Rob Fong expressed his interest in getting this done.

After leaving the meeting I felt pretty good about things and how they're not giving up. I can only wonder if under different leadership how things would have been so different.

I also spoke to someone who has one of the proposals and he knew from the beginning the Convergence plan would never work for obvious reasons. If his proposal is chosen then I hope it works out.

It would be nice to have Kings fans and even non Kings fans come out to the meetings and show their support. There were no naysayers. I guess they like to hide behind their monitors.

 

[Sac.1989]

Good on ya mate, one can hope we somehow get this done. It'll only be through the continual efforts of people such as yourself that give us any hope.

 

[Warhawk]

Hey Mike - thanks for going and providing the recap. We really appreciate it!

 

[Sparky6string]

Yes thank you for this. Knowledge is power.

 

[kennadog]

Thank you so much Mike for going and representing Kings fans. It would be very hard for me to attend, but I might if a critical vote meeting comes up.

I'm a Kings fan, obviously, but I'd would've supported the idea of an arena even without the Kings. I think it is valuable to the community as an amenity and also could finally spur downtown redevelopment. A good part of the reason Natomas has restaurants, hotels, etc., is because of Arco being there.

 

[BMiller52]

Hey Mike - thanks for going and providing the recap. We really appreciate it!

Agreed.

I hope they choose a different plan this time that has a chance at working, maybe the guy Mike talked to. Also, depending on what day the next city council arena meeting is on I wonder if some of us even living outside Sacramento should go? I live by Chico but imagine the impact it would show the city council if people from outside the area showed up and said "look, the Kings are why we go to your city and spend money there. without the kings we wouldn't do that. A lot of people come from outside the area to see the Kings, and spend their money in Sacramento. Without the Kings, the city of Sac will lose a lot of tourism dollars etc". What do you guys think?

 

[kupman]

I am hoping this plan is still on the table with life:

http://www.sacramentofirst.org/wp-content/uploads/2010/01/arenaOnTheRiver_Proposal.pdf

I liked it best from the beginning because:
1) The financing is simple and does what the naysayers ask "the arena is built from the money of the people who use it." No new taxes.

2) The state is not involved.

3) it develops the river front like no other proposal and has good connectivity to other great Sactown destinations - Old Sac, Crocker and others.

4) it would provide really great views of the river, Tower Bridge and down town Sac.

5) It just looks cool

This idea has been around for about 10 years. Take a look at the details. They did not draw this up on a back of an envelope during lunch. A lot of work has gone into it.

 

[Bricklayer]

I am hoping this plan is still on the table with life:

http://www.sacramentofirst.org/wp-content/uploads/2010/01/arenaOnTheRiver_Proposal.pdf

I liked it best from the beginning because:
1) The financing is simple and does what the naysayers ask "the arena is built from the money of the people who use it." No new taxes.

2) The state is not involved.

3) it develops the river front like no other proposal and has good connectivity to other great Sactown destinations - Old Sac, Crocker and others.

4) it would provide really great views of the river, Tower Bridge and down town Sac.

5) It just looks cool

This idea has been around for about 10 years. Take a look at the details. They did not draw this up on a back of an envelope during lunch. A lot of work has gone into it.

I think I remember that idea from back before the economy tanked. But what is the funding plan? Because at this point that is everything. If the money is there, I think we've finally reached the point where everybody would be eager to buid an arena. Well not everybody, but most of the people who matter. But the one is the thing. So how does this one generate it? Developer gets waterfront space in exhange fro building arena?

 

[Capt. Factorial]

I think I remember that idea from back before the economy tanked. But what is the funding plan? Because at this point that is everything.

The funding plan for this one is the Equity Seat Rights plan. Which to me looks untenable on its face. They're proposing (in the document above) to raise over $900M in capital by selling 125 suite season tickets (at $300,000/year each, and despite saying earlier in the document that there are 70 -- not 125 -- suites in the proposed building) and 1000 season ticket seats at $800/game. Both of these go over 30 years. $800 a game, 30 year commitment (or find someone to sell it to)? I can't imagine that going far. Dead courtside, maybe. But not 1000 seats at that price. Who would buy them?

 

[Superman]

The funding plan for this one is the Equity Seat Rights plan. Which to me looks untenable on its face. They're proposing (in the document above) to raise over $900M in capital by selling 125 suite season tickets (at $300,000/year each, and despite saying earlier in the document that there are 70 -- not 125 -- suites in the proposed building) and 1000 season ticket seats at $800/game. Both of these go over 30 years. $800 a game, 30 year commitment (or find someone to sell it to)? I can't imagine that going far. Dead courtside, maybe. But not 1000 seats at that price. Who would buy them?

I'm no Isaac Newton, but that sounds like a $9 million commitment for the suites, and an $800,000 commitment for the courtside seats. And you need at least 1,125 people willing to spend those amounts of money. I'm not exactly enthused by those numbers.

 

[ReinadelosReys]

Thank you so much Mike for going and representing Kings fans. It would be very hard for me to attend, but I might if a critical vote meeting comes up.

I'm a Kings fan, obviously, but I'd would've supported the idea of an arena even without the Kings. I think it is valuable to the community as an amenity and also could finally spur downtown redevelopment. A good part of the reason Natomas has restaurants, hotels, etc., is because of Arco being there.

Ditto!

 

[kupman]

The funding plan for this one is the Equity Seat Rights plan. Which to me looks untenable on its face. They're proposing (in the document above) to raise over $900M in capital by selling 125 suite season tickets (at $300,000/year each, and despite saying earlier in the document that there are 70 -- not 125 -- suites in the proposed building) and 1000 season ticket seats at $800/game. Both of these go over 30 years. $800 a game, 30 year commitment (or find someone to sell it to)? I can't imagine that going far. Dead courtside, maybe. But not 1000 seats at that price. Who would buy them?

Who would by them? Wealthy Kings fans. The same people who have yachts in the Bay and a mountain home in Tahoe. You don't need many of them - a few hundred to buy a few seats each. They would buy it not only because they like to see the Kings, but they could also build equity over time. It is the same reason that people buy high end art and jewelry. Cooperations and firms could also be customers.

This model is working at Cal where they are more than 1/2 way home to their goal, and they are doing it during hard economic times. Plus, the people at Morgan Stanley seem to know what they are doing.

 

[kennadog]

Yes, this kind of financing seems to work better at the college level from what I've read. It looks like a pretty optimistic projection of value, too. (Just at a quick look; no deep analysis.) Of course, my experience with developers is that they are always way too optmistic. Of course, developers take big economic risks on a deal, so I guess they have to convince themselves, too, that the deal will work, before they take the leap.

I did really like that riverfront idea, though. That section of riverfront is dismal right now and its such a prime location. Its downside is that it won't be close to the already planned transportation hub. Convenient access is horrible, so that's why they show a lot of transportation infrastructure to be added. And it wouldn't spur development like an arena in the rail yards would, hopefully. It is cool, looking, though, with the river views it would have.

 

[Trueblood]

We need to keep in mind that this works in college as well because the college arenas are just a lot cheaper. Plus, you don't have players to pay or at least aren't supposed to.

Instead of getting a ton of money from very, very, VERY longshot financial commitments, money that would be taken out of the Maloof's pockets as well, we should just go back to giving the Maloofs control of the arena in exchange for a 30 year, $300 million guarantee. That's a lot easier regardless of what loan payments come into play.

 

[Larry David]

We need to keep in mind that this works in college as well because the college arenas are just a lot cheaper. Plus, you don't have players to pay or at least aren't supposed to.

Instead of getting a ton of money from very, very, VERY longshot financial commitments, money that would be taken out of the Maloof's pockets as well, we should just go back to giving the Maloofs control of the arena in exchange for a 30 year, $300 million guarantee. That's a lot easier regardless of what loan payments come into play.

I doubt the "college" plan is viable, but it's up front money. The $300 million in rent doesn't provide any up front construction money, which is the deal breaker right now.

With their money issues, I'm sure this is the route the Maloofs want to go. But there is no money in the pot. In Natomas or the Rail Yards, the city throws in the land and the team will pay rent ... BUT ... everybody is still looking for a 3rd party to front almost 100% of the construction cost.

I'm not saying the college plan should be used. I'm disputing that 30 years of rent makes anything " lot easier."

Back in 2004, the city and the Kings both were ready to put money on the table. Now, its probably not even possible.

 

[Trueblood]

I doubt the "college" plan is viable, but it's up front money. The $300 million in rent doesn't provide any up front construction money, which is the deal breaker right now.

With their money issues, I'm sure this is the route the Maloofs want to go. But there is no money in the pot. In Natomas or the Rail Yards, the city throws in the land and the team will pay rent ... BUT ... everybody is still looking for a 3rd party to front almost 100% of the construction cost.

I'm not saying the college plan should be used. I'm disputing that 30 years of rent makes anything " lot easier."

Back in 2004, the city and the Kings both were ready to put money on the table. Now, its probably not even possible.

It's not possible because it's too expensive. The same $350 million arena now costs close to $500. The Maloofs should've taken that deal. I know it's 20-20 hindsight but that looks like gold now.

And yes, it is easier. The Maloofs were willing to do the 30 year, $300 million provided there was up front money. While it may not be there now, I still say it's easier to figure out something rather than bank on the amount of money and commitment from fans. This team barely has what, 6,000 season ticket holders who can only commit one year at a time? In this economy, how does anyone commit to those kind of numbers?

I'm wondering if Macquarie Capital is still on board with whatever plan Kamilos will announce in 90 days. It's a long shot but I'm guessing that whatever idea they come up with will be connected with Macquarie. I don't think Macquarie cared as much about the old plan as they do with getting their feet wet in North America.