Councilmember Kevin McCarty: Why I voted NO on arena plan...

[Circa_1985_Fan]

Pretty much the same CAVE broken record we've heard already, but figured I'd post:

http://sacramentopress.com/headline/64692/McCarty_Why_I_voted_no_on_the_arena_deal
Dear District 6 Constituents and City of Sacramento Residents,

At the City Council meeting last night, I voted against a financial plan to build a new downtown sports area. I would like to share why.

Over the past few months, I have heard from hundreds of constituents and city residents who have called and emailed my office. I’ve talked with advocacy groups, business owners, Kings’ fans and interested parties in the arena deal. In addition, I’ve done my homework, researched other city arena deals and read through over 1,700 constituent surveys on this issue. I came to this conclusion carefully and thoughtfully.

In addition, I want folks to know that I am not an automatic "no vote" on public funding for an arena. My stance is that if we put public money into this project, it must be a good deal for the city and its residents. The deal put before us Tuesday night had too many risks and assumptions and not enough upside. It just isn’t a good enough deal for the City of Sacramento.

Here are the problems I see…

Problem 1: Pressing City Priorities

A Parking Authority idea is very intriguing and should be pursued regardless of whether the Arena deal goes forward to help produce millions in new monies annually for our City. If nothing else, this process helped us get here. However, it's really a policy choice where the new parking revenues should be allocated.

For me, it’s unconscionable to put all new parking monies toward the Arena with so many other pressing City needs. In my Council District 6, all three swimming pools are shut down. My community centers and libraries are open only a few days a week and staffed at skeleton levels.

All youth sports programs were eliminated last year citywide. Park maintenance and code enforcement staffs can’t provide adequate service levels, and more than 200 police and fire fighter jobs have disappeared in recent years.

And in less than 3 months, there will be more layoffs as we make another $25 million in budget cuts.

While I believe we must invest in the City’s future, we must also address the City’s current budget needs – unfortunately, the plan presented Tuesday night does NOT do that.

Problem 2: The Kings Loan

Under this plan, the current Kings $67 million loan will not be paid off –but refinanced. This loan would linger on the City’s books for another 30-plus years impacting the City’s credit-score and debt-ratio.

In addition, I am very leery about the absence of any real collateral on this refinanced loan. The existing loan the City has with the Kings has the arena and adjacent land as collateral. This refinanced 30-year loan would have neither. What bank would accept that deal?

This loan should be secured against real property of equal value, or with a significant financial interest, or with an NBA guarantee to protect the City against a default.

Problem No. 3: The $9 million General Fund backfill has too many assumptions, while the deal produces minimal upside

The plan backfills the City’s General Fund for core city services and magically adds up to $9 million. That dollar amount is not guaranteed and is based on assumptions. For example, I’m concerned about the $4 million annual projected income from ticket surcharges. What happens if we have another lockout or strike, or poor attendance year-after-year due to a badly performing team? Our neighbors in Stockton and Oakland lost big because of overly optimistic income projections for arena and stadium deals. Instead, why not insist that the Kings, AEG or the NBA guarantee the $4 million annual backfill?

More importantly, why are we just breaking even financially? Does anyone think AEG and the Kings only hope to break even? If it’s going to make money for them, then it should make money for the City and provide revenue for our priorities—especially since we are the ones putting up 65% of the investment.

These numbers are very revealing to me – AEG is investing $59 million and netting $5.7 million annually, while the City of Sacramento is investing $256 million and netting $1 million annually.

Problem No. 4: We’re going at it alone

We started with a regional effort last year, but today we stand alone. Sacramento would be going into this deal with very little help from other government entities in the region. Other small-market NBA cities have partnered with neighboring local governments to help make the deal work. West Sacramento and Yolo County have not been engaged as partners. They are fewer than 1,000 feet from the proposed arena site and have many businesses and retailers who would benefit from the arena’s presence. Officials in the City of Rancho Cordova have shown a willingness to listen to a partnership proposal, but they have not been engaged either. This arena will be a regional amenity; we cannot and should not be standing alone.

Problem No. 5: Our City contribution has doubled in 5 months

Five months ago, City staff and the Mayor’s “Think-Big” Committee stated that our City’s cost contribution for the arena would be 33%. That was a fair deal.

• A few months later, the City’s cost contribution increased to 50%. • Last night, the City’s cost contribution increased further to 65%. • That is an increase of nearly 100% since September.

As I said earlier, I am not an automatic “no vote” on public funding for an arena, but it has to be a better deal for our City and its residents. We deserve a bigger bang for our buck.

 

[Section 101]

Problem 1: Pressing City Priorities

A Parking Authority idea is very intriguing and should be pursued regardless of whether the Arena deal goes forward to help produce millions in new monies annually for our City. If nothing else, this process helped us get here. However, it's really a policy choice where the new parking revenues should be allocated.

The ESC enhances the parking value. Without an ESC the parking will not produce the same amount of money.

For me, it’s unconscionable to put all new parking monies toward the Arena with so many other pressing City needs. In my Council District 6, all three swimming pools are shut down. My community centers and libraries are open only a few days a week and staffed at skeleton levels.

All youth sports programs were eliminated last year citywide. Park maintenance and code enforcement staffs can’t provide adequate service levels, and more than 200 police and fire fighter jobs have disappeared in recent years.

And in less than 3 months, there will be more layoffs as we make another $25 million in budget cuts.

While I believe we must invest in the City’s future, we must also address the City’s current budget needs – unfortunately, the plan presented Tuesday night does NOT do that.

You you admit the status quo is not working. What is your plan to fix it?

If pools are closing then start charging money for their up keep. Let the people who use them pay for them. The same goes for librarys, sports programs, etc.

Letting a major employer leave the area will reduce the amount of taxes collected by the city thus increasing the deficit even more.

Problem 2: The Kings Loan

Under this plan, the current Kings $67 million loan will not be paid off –but refinanced. This loan would linger on the City’s books for another 30-plus years impacting the City’s credit-score and debt-ratio.

In addition, I am very leery about the absence of any real collateral on this refinanced loan. The existing loan the City has with the Kings has the arena and adjacent land as collateral. This refinanced 30-year loan would have neither. What bank would accept that deal?

This is a valid argument. However, look at a possible result of MSE leaving to another city. They could walk away from the loan. There could be lawsuits over the loan. In the meantime who keeps making the payments? The city could still be on the hook for the existing loan hurting its credit rating and causing the general fund to be used on repayment.

Problem No. 3: The $9 million General Fund backfill has too many assumptions, while the deal produces minimal upside

The plan backfills the City’s General Fund for core city services and magically adds up to $9 million. That dollar amount is not guaranteed and is based on assumptions. For example, I’m concerned about the $4 million annual projected income from ticket surcharges. What happens if we have another lockout or strike, or poor attendance year-after-year due to a badly performing team? Our neighbors in Stockton and Oakland lost big because of overly optimistic income projections for arena and stadium deals. Instead, why not insist that the Kings, AEG or the NBA guarantee the $4 million annual backfill?

Guess what? The $9 mill annual for parking is an assumption too. There is no guarantee the parking will generate the same money each year. With rising gas prices and the continual loss of businesses in the downtown/sacramento area there will be less people parking reducing the revenues.

More importantly, why are we just breaking even financially? Does anyone think AEG and the Kings only hope to break even? If it’s going to make money for them, then it should make money for the City and provide revenue for our priorities—especially since we are the ones putting up 65% of the investment.

These numbers are very revealing to me – AEG is investing $59 million and netting $5.7 million annually, while the City of Sacramento is investing $256 million and netting $1 million annually.

AEG is taking a bigger risk. If the attendance for events doesn't meet expectations the could be looking at losses. They are the ones responsible for running the ESC and bringing in the entertainment.

Keep in mind the city will own the ESC. It will also gain from the increased value in the property of the ESC and increased taxes for new businesses around the ESC. And if you think that the businesses are just moving from a current location around the current arena that's fine. But they will be going out of business if the current arena is gone. Better to move than go away completely reducing revenues.

Problem No. 4: We’re going at it alone

We started with a regional effort last year, but today we stand alone. Sacramento would be going into this deal with very little help from other government entities in the region. Other small-market NBA cities have partnered with neighboring local governments to help make the deal work. West Sacramento and Yolo County have not been engaged as partners. They are fewer than 1,000 feet from the proposed arena site and have many businesses and retailers who would benefit from the arena’s presence. Officials in the City of Rancho Cordova have shown a willingness to listen to a partnership proposal, but they have not been engaged either. This arena will be a regional amenity; we cannot and should not be standing alone.

Valid argument again. But lets ask the question if regional partners were brought in and it was determined the cost would be significantly lower and the economics would be better if the ESC was in say Folsom, Rancho Cordova or Roseville would the city still be willing to put up their share? The city has the most to gain and the most to lose. West Sacramento is second on this list and should be doing more. Step it up Cabalbon !!


Problem No. 5: Our City contribution has doubled in 5 months

Five months ago, City staff and the Mayor’s “Think-Big” Committee stated that our City’s cost contribution for the arena would be 33%. That was a fair deal.

• A few months later, the City’s cost contribution increased to 50%. • Last night, the City’s cost contribution increased further to 65%. • That is an increase of nearly 100% since September.

As I said earlier, I am not an automatic “no vote” on public funding for an arena, but it has to be a better deal for our City and its residents. We deserve a bigger bang for our buck.

Once again the city will be owning the ESC. I believe the 1/3 plan had MSE owning the building and running it. Your getting a $391 million building at 65% cost ! Plus it will be jump starting the railyards project providing the city with additional revenues! So I ask once again what is your plan to the status quo?

 

[The Hammer]

Is this guy just Sheedy's ***** or what?

There's no way he'll be able to defend this vote next election cycle when he'll be facing a motivated opponent who will tear this apart in a public setting. 'Fraid he'll be out of a seat at that time. This vote of his was basically political suicide... why the hell did he do it?

 

[kennadog]

Those are some of the real concerns.

Number two in particular bothers me, although I think the Kings can come up with some kind of sufficient collateral. But this issue nags at me, too.

Number three is concerning and scary given that even more cuts to city services are coming in the next fiscal year. The city council asked them how would the $9 million gap in the GF be backfilled. They did NOT ask city staff to estimate if revenues would generate more. Staff told them, there was back up in the report on other potential sources and it was all very carefully backed-up. In response to a council member, "The back-ups would hae back-ups."

Also, the sources listed were back-up sources generated only by the new arena and the new parking. In this regard, the staff did not say that future development in the railyard should, hopefully, bring the GF revenue that far exceeds a static $9 million/year.

I'm a little ticked off about number 4, too. We actually did provide support for Raley Field. Not a lot monetarily, but the city is part of the bonding authority with W. Sacramento and Yolo County. That spreads the risk in floating bonds. West Sacramento owes us.

Not good reasons:

The costs listed in number one, are all ongoing operating expenses. The city should definitely NOT use a one time wad of cash as a short term solution to the budget. That was the mistake Chicago made. They filled budget shortfalls for two years with the $1 billion they received for their parking. So they ended up putting off the cuts for two years and have absolutely nothing to show for that one billion dollars.

We can argue if all or some of the money should be put into other city capital improvements, like the water/sewer infrastructure, in particular. However, as pointed out last night, water/sewer projects are not going to create any revenue at all for the city. I would say it also will bring zero private investment. One can argue that the money the Maloofs and AEG are putting up is not enough, but if we don't do the deal, the City loses even that investment from private entities.

As to number 5, that's really rather pointless. It's either a good deal for the city as an economic stimulas and revitaization catalyst for the rail yards and downtown or not. That's the hoped for return on investment to the city here, idiot. The city isn't looking solely for profit like AEG and the Maloofs. We're looking for a bigger, more revenue-producing downtown. And then there are the intangibles like happiness and civic pride.

Finally, I'll guarantee the Darrell Fong has all those same reservations, but he voted yes, becasue the city isn't obligating themselves to build an arena by approving the term sheet. However, a yes vote allows for the details and much more information to be provided. D. Fong realized that while he has serious concerns, there is still not enough information to be certain on all those issues. He's keeping his mind open for more information without committing the city to the arena yet.

For those who wondered what could stop the arena. Those are some of the issues that could stop the arena. We have to convince 5 council members that those issues have been reasonably and sufficiently resolved.

Those of us in #FANS and other arena supporters can't act totally blind about the risks involved. Then we would be as blind as the CAVE people on the other side. There are risks involved in any development. If we argue there aren't we lose all credibility. The question are the perceived riskas outweighed by the perceived gains? I still think yes.

Section 101 is faster than me.

 

[Circa_1985_Fan]

Is this guy just Sheedy's ***** or what?

There's no way he'll be able to defend this vote next election cycle when he'll be facing a motivated opponent who will tear this apart in a public setting. 'Fraid he'll be out of a seat at that time. This vote of his was basically political suicide... why the hell did he do it?

Yeah I've been saying that all along...if he voted no(and he did)he would be alienating/losing his biggest campaign cheerleader in Darrell Steinberg, who was one of the driving forces behind us getting this deal approved.

 

[Section 101]

Those are some of the real concerns.

Number two in particular bothers me, although I think the Kings can come up with some kind of sufficient collateral. But this issue nags at me, too.

Number three is concerning and scary given that even more cuts to city services are coming in the next fiscal year. The city council asked them how would the $9 million gap in the GF be backfilled. They did NOT ask city staff to estimate if revenues would generate more. Staff told them, there was back up in the report on other potential sources and it was all very carefully backed-up. In response to a council member, "The back-ups would hae back-ups."

Also, the sources listed were back-up sources generated only by the new arena and the new parking. In this regard, the staff did not say that future development in the railyard should, hopefully, bring the GF revenue that far exceeds a static $9 million/year.

I'm a little ticked off about number 4, too. We actually did provide support for Raley Field. Not a lot monetarily, but the city is part of the bonding authority with W. Sacramento and Yolo County. That spreads the risk in floating bonds. West Sacramento owes us.

Not good reasons:

The costs listed in number one, are all ongoing operating expenses. The city should definitely NOT use a one time wad of cash as a short term solution to the budget. That was the mistake Chicago made. They filled budget shortfalls for two years with the $1 billion they received for their parking. So they ended up putting off the cuts for two years and have absolutely nothing to show for that one billion dollars.

We can argue if all or some of the money should be put into other city capital improvements, like the water/sewer infrastructure, in particular. However, as pointed out last night, water/sewer projects are not going to create any revenue at all for the city. I would say it also will bring zero private investment. One can argue that the money the Maloofs and AEG are putting up is not enough, but if we don't do the deal, the City loses even that investment from private entities.

As to number 5, that's really rather pointless. It's either a good deal for the city as an economic stimulas and revitaization catalyst for the rail yards and downtown or not. That's the hoped for return on investment to the city here, idiot. The city isn't looking solely for profit like AEG and the Maloofs. We're looking for a bigger, more revenue-producing downtown. And then there are the intangibles like happiness and civic pride.

Finally, I'll guarantee the Darrell Fong has all those same reservations, but he voted yes, becasue the city isn't obligating themselves to build an arena by approving the term sheet. However, a yes vote allows for the details and much more information to be provided. D. Fong realized that while he has serious concerns, there is still not enough information to be certain on all those issues. He's keeping his mind open for more information without committing the city to the arena yet.

For those who wondered what could stop the arena. Those are some of the issues that could stop the arena. We have to convince 5 council members that those issues have been reasonably and sufficiently resolved.

Those of us in #FANS and other arena supporters can't act totally blind about the risks involved. Then we would be as blind as the CAVE people on the other side. There are risks involved in any development. If we argue there aren't we lose all credibility. The question are the perceived riskas outweighed by the perceived gains? I still think yes.

Section 101 is faster than me.

. I don't think the point of the $9 mil for parking being an assumption has been brought up before. Parking revenue could drop big time with the increased gas prices.

 

[Larry David]

I ready McCarty's response, all I saw was, "I'm running for the state assembly in 2014, and I think that a 'no' vote plays better than a 'yes' vote."

If he just said what he was really thinking, he could have knocked it out in 21 words. But, that's not how things are done.

 

[kennadog]

. I don't think the point of the $9 mil for parking being an assumption has been brought up before. Parking revenue could drop big time with the increased gas prices.

Yes, Sheedy pointed that out and I was sitting there thinking that's a good argument that $9 million is a bad assumption, too.

 

[JB_kings]

Yes, Sheedy pointed that out and I was sitting there thinking that's a good argument that $9 million is a bad assumption, too.

Then RT ridership goes up and we charge them.

 

[The Hammer]

I ready McCarty's response, all I saw was, "I'm running for the state assembly in 2014, and I think that a 'no' vote plays better than a 'yes' vote."

If he just said what he was really thinking, he could have knocked it out in 21 words. But, that's not how things are done.

Larry, you'll have to educate me as to why you believe he thought a no vote would play better than a yes vote for his purposes. Would not he be representing an area of Sac for his state assembly bid? Doesn't he realize that a large majority of cititzens are for the arena? Will he not have to defend this vote against his opponent then?

I realize if moved to Anaheim, he'd be a shoo in.

 

[John Galt]

When I was a kid I was told a story (maybe apocrophal I'm not sure but it made an impression). The short version was that the US sent tons of grain seeds to some foreign country with a famine problem so they could grow fields of wheat and feed their people. They ate the seeds. Kevin McCarty wants to eat the seeds.

 

[mr. moustache]

Larry, you'll have to educate me as to why you believe he thought a no vote would play better than a yes vote for his purposes. Would not he be representing an area of Sac for his state assembly bid? Doesn't he realize that a large majority of cititzens are for the arena? Will he not have to defend this vote against his opponent then?

I realize if moved to Anaheim, he'd be a shoo in.

A large majority of the citizens *aren't* for the arena.

 

[kennadog]

A large majority of the citizens *aren't* for the arena.

This is likely true. Which is why more of the regional governments should step up. Especially ones with the richer people.

 

[Glenn]

A large majority of the citizens *aren't* for the arena.

This is why we elect representatives who supposedly are wiser than we are or at the least know more about the issues. NIMBY or CAVE is the mind set of this community. I hope that this project shows them that advancing into the 21st century is not a bad thing.

 

[The Hammer]

A large majority of the citizens *aren't* for the arena.

Really? Genuinely asking. Not local anymore so don't know the vibe on the street. Have there been polls?

And if so, that's just kinda sad.

Also, will that still be the case once the public has time to get fully educated on this? As in, over the next two years while it's being designed and built? Or whatever time before the next election for McCarty... like 2014.

It would have been better to bank on it's success, because we all know it's going to be built, and be successful, than to be that one guy other than Sheedy who tried to block it and send the Kings packing.

 

[JB_kings]

I ready McCarty's response, all I saw was, "I'm running for the state assembly in 2014, and I think that a 'no' vote plays better than a 'yes' vote."

If he just said what he was really thinking, he could have knocked it out in 21 words. But, that's not how things are done.

Some of the political people I talk to say he made a huge mistake. His career now is pretty much maxed out.

 

[The Hammer]

When I was a kid I was told a story (maybe apocrophal I'm not sure but it made an impression). The short version was that the US sent tons of grain seeds to some foreign country with a famine problem so they could grow fields of wheat and feed their people. They ate the seeds. Kevin McCarty wants to eat the seeds.

Exactly. Just crazy.

And, funnily, I can't tell if he actually believes what he's saying/voting, or if he is only doing that because that's what he things his constituents think, or that's what whatever base he's gunning for capturing would think. Either way... it's not effective leadership. Just zero vision whatsoever.

 

[Glenn]

Some of the political people I talk to say he made a huge mistake. His career now is pretty much maxed out.

That makes sense. Why else would he go to such lengths to publish what he says are his beliefs? It's the pits being on the wrong side of an issue.

 

[The Hammer]

That makes sense. Why else would he go to such lengths to publish what he says are his beliefs? It's the pits being on the wrong side of an issue.

Yeah... but it was so easy to be on the right side of this one. I wonder who he was getting his advice from. Maybe it's just easier for me to have perspective not surrounded by flaming cavers and ininformed citizens. Still... boggles the mind if he supposedly had political ambitions.

 

[ReinadelosReys]

Pretty much the same CAVE broken record we've heard already, but figured I'd post:

http://sacramentopress.com/headline/64692/McCarty_Why_I_voted_no_on_the_arena_deal
Dear District 6 Constituents and City of Sacramento Residents,

At the City Council meeting last night, I voted against a financial plan to build a new downtown sports area....

Sorry, I couldn't get past this sentence.

1. "sports area" Not to nit pick, and yes I am not an English teacher, but this should have been double proof read.

2. Calling it a "sports are(n)a" I didn't know the facility would only be open 41 nights a year. Way to play into the counter arguments, Mr. McCarty.

 

[Glenn]

Sorry, I couldn't get past this sentence.

1. "sports area" Not to nit pick, and yes I am not an English teacher, but this should have been double proof read.

2. Calling it a "sports are(n)a" I didn't know the facility would only be open 41 nights a year. Way to play into the counter arguments, Mr. McCarty.

Good find. I didn't bother to read what he wrote. This is the problem with the citizens of this area, They see it not only as a sports arena and not an entertainment center but it gets linked to the idea it is publicly funded and has no public benefit. In other words, it's a gift to the Maloofs. Nothing new that I said except when a council member thinks that way, it shows he doesn't know what was being built and his job is to know or find something else to do.

 

[Gary]

Downtown parking = good deal for the city when the arena is there and there are events on average more than every other day of the year..

Lightrail that goes to the front of the arena = good deal for the city because right now the light rail is not used as much as it could be, and it's definitely not generating much in the way of money. Think about BART during a Giants game. I catch the BART at Pittsburgh and it's almost packed all the way to the game. Now think about the light rail packed because of the downtown being a destination, and the arena having a lot of events.

Local businesses downtown = good deal because the more people going downtown the more tax money is generated. Not to mention new arenas will draw NCAA tournament games which generate millions of dollars a game. Grant talked about a republican event (I think in Kansas City) which made 100mil for the city for that one day event.

Think about it.. We know Sacramento is pretty dang spread out as it is right now. We get the arena downtown and we get a more centralized area for commerce, and not to mention the Rivercats are there in the summer so you could go to a concert at the arena then catch a Rivercats game and not have to drive from one end of town to the other.

This is totally win-win and the idiot McCarthy doesn't realize it, and hopefully he gets booted from office.

 

[rainmaker]

What would be great, is since Sheedy and McCarty voted against it, when the arena is built and tens of millions in extra revenue for the city comes in, both Sheedy's and McCarty's districts don't get a penny. They went against it, well if it works out, your district should be left out and not included in the benefits. Then, they can go ahead and tell their districts what their plan is to make up the revenue they just lost. Far too much in politics politicians criticize without offering any other solutions.

 

[kennadog]

Really? Genuinely asking. Not local anymore so don't know the vibe on the street. Have there been polls?

And if so, that's just kinda sad.

Also, will that still be the case once the public has time to get fully educated on this? As in, over the next two years while it's being designed and built? Or whatever time before the next election for McCarty... like 2014.

It would have been better to bank on it's success, because we all know it's going to be built, and be successful, than to be that one guy other than Sheedy who tried to block it and send the Kings packing.

I can't remember when council member said, but said that when he has explained the deal and answered questions with anti-arena folks, they generally change to a much more positive view of the deal.

And Glenn is right. This is why we have a representative democracy, Their job is to learn and know as much as they can on everything they will vote on. Many have aides that help them, but on a deal this big, I would hope they went through the last 10 months absorbing all the consultant reports, all the city staff reports, all the city legal counsel information, etc. The everyday person on the street, even educated ones don't have that much time to familiarize themselves with every issue and what every city department 's issues are, unless it's one that is of particular importance to them.

Not only that, but elected representatives need to weigh the differing opinions of their constituents and help the misinformed or uninformed understand the the basics.

McCarty isn't dumb or uninformed and some of his points are well taken. D. Fong has issues, too, but voted yes in order to be provided further and more detailed information, before he actually commits the city irrevocably. Fong may yet vote no along the way and I think he leans that way, but I respect him for wanting to wait for more information and being open to changing his mind.

McCarty does not strike me as a leader. I'm going to be unkind here, but he looks like the smart, but wimpy, nerd kid who always got picked on in school. Maybe he's overcompensating now that he has power.

 

[The Hammer]

Pretty much the same CAVE broken record we've heard already, but figured I'd post:

http://sacramentopress.com/headline/64692/McCarty_Why_I_voted_no_on_the_arena_deal
Dear District 6 Constituents and City of Sacramento Residents,

At the City Council meeting last night, I voted against a financial plan to build a new downtown sports area. I would like to share why.

Good spot Reina. Beyond the misspelling, this little tiddly bit exposes his bias, and blatantly. This thing will be used by the Kings for about 1/7 of the total events out of the year, maybe less. 41 nights out of possibly up to 250 event, maybe even 300 in the coming years.

To call it a "sports arena"... I mean it's just so obvious that you are trying to use language that panders to those who are already against it. Just totally biased. I lost respect for him right there.

And, for him to actually accuse this thing as having "minimal upside". Just... wow. Rarely is there a more inaccurate use of the word. Sacramento could, and likely will, make so much god damn money off this thing, from so many angles. And we haven't even seen the full breakdown on the revenue sharing on arena profits/consessions with AEG, have we? Maybe we have. I'd also like to see some projections, and case studies (not that I've spent any time looking.)

What my gut tells me is that the Dangberg and Shirey are actually being very conservative in their projections. I don't think they needed to exaggerate to get votes, the votes were won by the work of making this a good deal. All of which could mean that when this thing does begin to have impact and boost the general fund, all the sudden the city looks like hereos. Promise short, deliver long, is how I think they are playing it.

 

[Capt. Factorial]

What my gut tells me is that the Dangberg and Shirey are actually being very conservative in their projections.

I dare say they are. I noticed that because of the $1 per ticket Facility Fee (which goes toward an arena upkeep fund) you can actually determine the exact attendance estimates they are using. The Kings attendance estimate isn't terribly low - they estimate 667K per year. Full sellouts with no playoffs would be 814K (assuming 18,500 seats), they are estimating just a tad over 15,000 per game, about 82% capacity.

But the attendance estimates for the non-Kings events is another story - only 647K per year. Obviously these events might not draw quite so many per event and we don't know exactly how many will be booked, but we know that current PBP attendance is about 2 million visitors annually, and it's not unheard of for new arenas to push that value toward 3 million. The sum of estimated Kings and non-Kings attendance is 1.314 million, which means the non-Kings (AEG) estimates are really low. And remember that the city gets the full benefit of the parking revenues for non-Kings events. I think they're lowballing these estimates pretty hard and showing that the numbers work for the lowball. Add another million visitors to non-Kings events (which is reasonable) and the city is flush with cash out of this deal.

 

[The Hammer]

I dare say they are. I noticed that because of the $1 per ticket Facility Fee (which goes toward an arena upkeep fund) you can actually determine the exact attendance estimates they are using. The Kings attendance estimate isn't terribly low - they estimate 667K per year. Full sellouts with no playoffs would be 814K (assuming 18,500 seats), they are estimating just a tad over 15,000 per game, about 82% capacity.

But the attendance estimates for the non-Kings events is another story - only 647K per year. Obviously these events might not draw quite so many per event and we don't know exactly how many will be booked, but we know that current PBP attendance is about 2 million visitors annually, and it's not unheard of for new arenas to push that value toward 3 million. The sum of estimated Kings and non-Kings attendance is 1.314 million, which means the non-Kings (AEG) estimates are really low. And remember that the city gets the full benefit of the parking revenues for non-Kings events. I think they're lowballing these estimates pretty hard and showing that the numbers work for the lowball. Add another million visitors to non-Kings events (which is reasonable) and the city is flush with cash out of this deal.

So, let me get this straight (and yes I've been too lazy to read the 18 page deal myself), when we're talking about "leasing out the parking" what we're really talking about is leasing out the parking revenues of 3 downtown structures near the arena on 41 nights (and only nights) a year??? That 30 year contract is going to net the city 200M in upfront cash?? And all the rest of the time (days, and all non-Kings events-- likely around 150-250) the city will get 100% of that parking revenue?? If so, would not that in itself backfill this so-called 9M/year loss from general fund due to losing parking revenue?

 

[The Hammer]

btw -- does anyone have a link as to where i could actually read the plan, or a version of the plan that was presented to city council?

 

[Section 101]

So, let me get this straight (and yes I've been too lazy to read the 18 page deal myself), when we're talking about "leasing out the parking" what we're really talking about is leasing out the parking revenues of 3 downtown structures near the arena on 41 nights (and only nights) a year??? That 30 year contract is going to net the city 200M in upfront cash?? And all the rest of the time (days, and all non-Kings events-- likely around 150-250) the city will get 100% of that parking revenue?? If so, would not that in itself backfill this so-called 9M/year loss from general fund due to losing parking revenue?

No. It's all the parking lots the city owns.

 

[The Hammer]

No. It's all the parking lots the city owns.

But just on arena nights?