http://www.sacbee.com/101/story/403598.html
NBA aiming for arena assist at Cal Expo today
By Terri Hardy and Mary Lynne Vellinga - Bee Staff Writers
Published 12:00 am PDT Friday, September 28, 2007
Story appeared in MAIN NEWS section, Page A1
Starting today, an unaccustomed spotlight will shine on the 10 people who make up the governing board of Cal Expo.
The volunteer board members, appointed by the governor and legislative leaders, are expected to vote this morning to authorize negotiations with the National Basketball Association on a possible arena for the Kings at the state fairgrounds at Exposition Boulevard off Capital City Freeway.
Months of talks are expected to follow -- in which the NBA will try to hash out the details of a development plan that makes financial sense, and bring it back to the board for approval.
NBA consultant John Moag arrived in Sacramento late Wednesday and spent Thursday briefing members of the Sacramento City Council. More briefings are scheduled for today.
So far, Moag doesn't have much to tell them, said council members who spoke with him. Moag hasn't responded to requests for comment this week.
The idea is to build a mixed-use development on Cal Expo property that would produce enough money to help build an arena, said Mayor Heather Fargo.
"That's the concept; I don't think there are a lot of financial details behind it," Fargo said. "I think they wanted to take this next step first to get a measure of the board's willingness to entertain this idea before they went any further."
By officially opening negotiations now, before all the details are worked out, NBA Commissioner David Stern can say he kept his pledge to announce an arena plan before the Kings season began, Councilman Rob Fong said.
"It buys them the time to say, 'We made an announcement,' and then they're going to work on it," Fong said. "It's probably going to take them the better part of the (basketball) season to work it out."
Councilman Steve Cohn, a critic of previous arena plans that involved tax dollars, said building an arena at Cal Expo has some promise because of the land potentially available for a money-making development.
Cal Expo has 360 acres. While the state fairgrounds and horse track occupy most of the property, venues could be reconfigured. The rest of the property could be developed to produce money to build an arena and to help the state modernize the fairgrounds, officials said.
The city and the Maloofs, who own the Kings, also could sell or develop the 180 acres they own around the current Arco Arena -- throwing that money into the pot as well.
"I'm neither for or against it," Cohn said. "I'm in the mode of, OK, let's dig into it and see if the finances work. I'm glad that we're now looking at options that don't involve a new tax."
An arena at Cal Expo must be accompanied by significant improvements to ease traffic, stressed Cohn, who represents nearby city neighborhoods. Options could include a trolley connecting to downtown or to a light-rail station across the freeway.
"You might be able to do a bridge or a monorail or a streetcar under the freeway," he said.
Figures released by Cal Expo on Thursday help explain why the people who run the state fairgrounds are looking for private partners to help redevelop the land into something more profitable -- while maintaining room for the State Fair, Cal Expo's primary mission.
The California State Fair this year took in less money and drew about 100,000 fewer people than anticipated.
"Disappointing? I think that's a fair characterization," said Cal Expo general manager Norb Bartosik.
Not all the news was bad. Average daily attendance -- paid and complimentary -- at the fair climbed to 47,489 visitors a day from 41,853 in 2005, showing momentum, Bartosik said.
Still, some Cal Expo board members and fair vendors attending a board retreat Thursday were clearly frustrated by the report's findings.
"This fair is the best, most affordable family entertainment anywhere," said Nick Nicora, of the fair's caterer, Ovations FanFare. "It's unbelievable to me that people aren't lined up for miles to get in."
The fair sold 522,500 tickets, but predictions had been for 622,245. Cal Expo staff believed the event would bring in $16.8 million, but collected $15.3 million. Cal Expo officials said their revenue expectations had been set in part through guesswork: This year was the first time the fair dropped to 16 days from 22 the previous two years. Earlier fairs ran 18 days.
Other possible reasons people stayed away, they said, were unfounded safety concerns, hot weather, and problems with marketing and advertising.
"We've never done a 16-day fair before and we were geared for a 22-day fair," Bartosik said. "It turned out that we just ran out of time. People started thinking about the fair and then discovered the fair was over."
In 2006, the State Fair brought in $17.6 million.
The bottom line number -- what the fair made after expenses -- is not yet available. But Bartosik agreed that in general, the fair usually makes enough to cover its expenses, set a small amount in reserve, and little else.
Certainly, he said there is no way that fair proceeds could make a dent in Cal Expo's $40 million backlog of deferred maintenance or the $150 million or more needed to upgrade the aging facility into a more modern entertainment center.
The state-owned Cal Expo is required by law to be self-supporting. It receives no money from California's general fund.
"Year after year, we've just been Band-Aiding things," Bartosik said. "We've been saying to the Legislature, we need more than just a Band-Aid."
To get a major cash infusion, Cal Expo successfully pushed for a bill that would allow the facility to issue bonds at a preferred rate for improvements.
Senate Bill 282, on the governor's desk, would create a joint powers authority that could authorize the issuance of revenue bonds for improvements to Cal Expo and the leasing of Cal Expo land to private developers.
The bonds would be repaid by the revenue generated from whatever project they help finance, said Doug Yoakam, legislative director for the bill's author, Sen. Dave Cox, R-Fair Oaks.
Whatever the outcome of the NBA's negotiations with Cal Expo, Fargo said she appreciates the effort the NBA is making to resolve the issue of building a new arena for the Kings.
"They're looking for a solution," the mayor said, "and this may work."
About the writer: The Bee's Terri Hardy can be reached at (916) 321-1073 or thardy@sacbee.com.
NBA aiming for arena assist at Cal Expo today
By Terri Hardy and Mary Lynne Vellinga - Bee Staff Writers
Published 12:00 am PDT Friday, September 28, 2007
Story appeared in MAIN NEWS section, Page A1
Starting today, an unaccustomed spotlight will shine on the 10 people who make up the governing board of Cal Expo.
The volunteer board members, appointed by the governor and legislative leaders, are expected to vote this morning to authorize negotiations with the National Basketball Association on a possible arena for the Kings at the state fairgrounds at Exposition Boulevard off Capital City Freeway.
Months of talks are expected to follow -- in which the NBA will try to hash out the details of a development plan that makes financial sense, and bring it back to the board for approval.
NBA consultant John Moag arrived in Sacramento late Wednesday and spent Thursday briefing members of the Sacramento City Council. More briefings are scheduled for today.
So far, Moag doesn't have much to tell them, said council members who spoke with him. Moag hasn't responded to requests for comment this week.
The idea is to build a mixed-use development on Cal Expo property that would produce enough money to help build an arena, said Mayor Heather Fargo.
"That's the concept; I don't think there are a lot of financial details behind it," Fargo said. "I think they wanted to take this next step first to get a measure of the board's willingness to entertain this idea before they went any further."
By officially opening negotiations now, before all the details are worked out, NBA Commissioner David Stern can say he kept his pledge to announce an arena plan before the Kings season began, Councilman Rob Fong said.
"It buys them the time to say, 'We made an announcement,' and then they're going to work on it," Fong said. "It's probably going to take them the better part of the (basketball) season to work it out."
Councilman Steve Cohn, a critic of previous arena plans that involved tax dollars, said building an arena at Cal Expo has some promise because of the land potentially available for a money-making development.
Cal Expo has 360 acres. While the state fairgrounds and horse track occupy most of the property, venues could be reconfigured. The rest of the property could be developed to produce money to build an arena and to help the state modernize the fairgrounds, officials said.
The city and the Maloofs, who own the Kings, also could sell or develop the 180 acres they own around the current Arco Arena -- throwing that money into the pot as well.
"I'm neither for or against it," Cohn said. "I'm in the mode of, OK, let's dig into it and see if the finances work. I'm glad that we're now looking at options that don't involve a new tax."
An arena at Cal Expo must be accompanied by significant improvements to ease traffic, stressed Cohn, who represents nearby city neighborhoods. Options could include a trolley connecting to downtown or to a light-rail station across the freeway.
"You might be able to do a bridge or a monorail or a streetcar under the freeway," he said.
Figures released by Cal Expo on Thursday help explain why the people who run the state fairgrounds are looking for private partners to help redevelop the land into something more profitable -- while maintaining room for the State Fair, Cal Expo's primary mission.
The California State Fair this year took in less money and drew about 100,000 fewer people than anticipated.
"Disappointing? I think that's a fair characterization," said Cal Expo general manager Norb Bartosik.
Not all the news was bad. Average daily attendance -- paid and complimentary -- at the fair climbed to 47,489 visitors a day from 41,853 in 2005, showing momentum, Bartosik said.
Still, some Cal Expo board members and fair vendors attending a board retreat Thursday were clearly frustrated by the report's findings.
"This fair is the best, most affordable family entertainment anywhere," said Nick Nicora, of the fair's caterer, Ovations FanFare. "It's unbelievable to me that people aren't lined up for miles to get in."
The fair sold 522,500 tickets, but predictions had been for 622,245. Cal Expo staff believed the event would bring in $16.8 million, but collected $15.3 million. Cal Expo officials said their revenue expectations had been set in part through guesswork: This year was the first time the fair dropped to 16 days from 22 the previous two years. Earlier fairs ran 18 days.
Other possible reasons people stayed away, they said, were unfounded safety concerns, hot weather, and problems with marketing and advertising.
"We've never done a 16-day fair before and we were geared for a 22-day fair," Bartosik said. "It turned out that we just ran out of time. People started thinking about the fair and then discovered the fair was over."
In 2006, the State Fair brought in $17.6 million.
The bottom line number -- what the fair made after expenses -- is not yet available. But Bartosik agreed that in general, the fair usually makes enough to cover its expenses, set a small amount in reserve, and little else.
Certainly, he said there is no way that fair proceeds could make a dent in Cal Expo's $40 million backlog of deferred maintenance or the $150 million or more needed to upgrade the aging facility into a more modern entertainment center.
The state-owned Cal Expo is required by law to be self-supporting. It receives no money from California's general fund.
"Year after year, we've just been Band-Aiding things," Bartosik said. "We've been saying to the Legislature, we need more than just a Band-Aid."
To get a major cash infusion, Cal Expo successfully pushed for a bill that would allow the facility to issue bonds at a preferred rate for improvements.
Senate Bill 282, on the governor's desk, would create a joint powers authority that could authorize the issuance of revenue bonds for improvements to Cal Expo and the leasing of Cal Expo land to private developers.
The bonds would be repaid by the revenue generated from whatever project they help finance, said Doug Yoakam, legislative director for the bill's author, Sen. Dave Cox, R-Fair Oaks.
Whatever the outcome of the NBA's negotiations with Cal Expo, Fargo said she appreciates the effort the NBA is making to resolve the issue of building a new arena for the Kings.
"They're looking for a solution," the mayor said, "and this may work."
About the writer: The Bee's Terri Hardy can be reached at (916) 321-1073 or thardy@sacbee.com.
