http://www.sacbee.com/content/news/story/14257183p-15071946c.html
New arena financing takes shape
A hike in county sales tax could be part of a plan put to voters.
By Terri Hardy and Ed Fletcher -- Bee Staff Writers
Published 12:01 am PDT Friday, May 19, 2006
In the next two weeks, city and county leaders hope to present a multifaceted financing plan for a new Sacramento sports arena using taxpayer dollars as well as money from the Maloof family, the owners of the Sacramento Kings.
The high-stakes push is being fueled by an Aug. 1 deadline to put a public financing question on the November ballot.
"Everyone believes there's a real window of opportunity to get this done now," said Sacramento Vice Mayor Rob Fong. "There is renewed interest on everyone's part to engage on a very serious level on this issue, and we're very heartened by regional support for this project. That's crucial to the ultimate success."
Geoff Davey, the county's chief financial officer, said an arena solution needs to involve the entire county.
"It would be incorrect to assume it is just a sales tax," Davey said. "We are no more than a week or two out (from presenting a plan) because the timetable is so short."
Consideration is being given to myriad options, including a quarter-cent countywide sales tax increase, land swaps and participation by other cities within Sacramento County, according to officials involved in arena talks.
If a tax is part of the equation, by law voters must give consent by Nov. 7. The Sacramento County Board of Supervisors must approve the ballot language by Aug. 1, said county counsel Robert Ryan.
Should it miss that deadline, the next possible date that the board could schedule would be June 2008, county officials said.
Darrell Steinberg, a former state assemblyman and Sacramento city councilman working for the owners of the Sacramento Kings to broker the arena deal, said once funding ideas are on the table, negotiations with the Sacramento Kings can begin in earnest.
"The Maloofs are ready to roll up their sleeves and get to work," Steinberg said. "We want to hear what the city and county are thinking and have to say. Once that happens (the Maloofs) will be fully engaged."
With a history of several failed attempts, arena supporters are wary of providing too many details or rushing the process despite the tight deadline. Only when all key stakeholders are in agreement will a plan be made public, said John Dangberg, a Sacramento assistant city manager for economic development and the city's arena point person.
Supervisor Roger Dickinson said keeping the Kings is important to the region, but he stressed that any deal "must make good business sense. It must make sense to the public."
Dickinson pointed out that Arco Arena is privately owned and suggested that if the Kings leave the area, the region would lose the use of that facility. If a new arena is built, the supervisor said it's possible the Kings would sell the arena to repay the debt owed to the city.
Supervisor Illa Collin said, "It makes sense to put something on the ballot that voters can say yes or no."
"I'm always in favor of giving voters a choice," she said. "Maybe we'll have something that will really work this time and serve the broad community."
As funding options have been explored over the past few months, attention has turned to a sales tax increase. It's the only type of tax that can be placed on a countywide ballot without separate votes by individual cities within the county, Ryan said.
A sales tax increase would be expected to generate approximately $60 million annually, said Russell Fehr, the city's finance director. The current sales tax rate in the county is 7.75 percent.
Another crucial issue is whether a proposed tax increase is for general or specific purposes. If a general sales tax increase is proposed on the ballot -- without any details on how the money would be spent -- it requires only a simple majority approval from voters. Specific taxes require two-thirds vote and are difficult to pass.
In the case of arena funding, Davey said arena backers are considering asking for a general sales tax increase. In addition, they would include a companion advisory question on how to use the money.
Ryan said that strategy is legally viable. In 1998, the state Supreme Court upheld a Santa Clara County sales tax increase passed for no specified purpose on a simple majority vote. The same ballot included a separate measure that said extra sales tax funds should be used for transportation improvements.
The court ruled that the two measures were not legally linked and therefore the two-thirds "supermajority" vote required for specific purposes was not needed, according to court documents.
It remains to be seen whether arena backers will be able to successfully convince even a majority of voters that a new arena is necessary, despite reports from the NBA that Arco is outdated and will need replacing. The idea of public financing could be an even tougher sell.
"To me, I don't use it so I shouldn't have to pay for it," said Nora Borja, a Citrus Heights resident. "We already pay enough in taxes."
But Chris Uboma, who works in Sunrise Mall, said Sacramento needs a shot in the arm.
"I don't have (any) problem with it. It's going to attract more attention to the city. It's going to enhance the city for people to come here."
Uboma would like to see the arena in a downtown location -- a view shared by Mayor Heather Fargo. Fargo, who was unavailable for comment Thursday, believes that downtown, particularly the Union Pacific railyard, would be a good arena location, said Chuck Dalldorf, an adviser working on special projects for the mayor.
Although the railyard is still in escrow, its developer, Thomas Enterprises Inc., in March submitted a plan setting aside a large portion of the property for a sports and entertainment district. Five acres were included for an arena.
The developer is now getting permits from the city on how to use the railyard, including an arena, said Suheil Totah, vice president for development for Thomas Enterprises.
"We're getting those approvals so we could build an arena if the financing plan comes together," Totah said Thursday. "We think it's something the community and the city want to see. It will be a great addition for our overall project."
About the writer: The Bee's Terri Hardy can be reached at (916) 321-1073 or thardy@sacbee.com.
New arena financing takes shape
A hike in county sales tax could be part of a plan put to voters.
By Terri Hardy and Ed Fletcher -- Bee Staff Writers
Published 12:01 am PDT Friday, May 19, 2006
In the next two weeks, city and county leaders hope to present a multifaceted financing plan for a new Sacramento sports arena using taxpayer dollars as well as money from the Maloof family, the owners of the Sacramento Kings.
The high-stakes push is being fueled by an Aug. 1 deadline to put a public financing question on the November ballot.
"Everyone believes there's a real window of opportunity to get this done now," said Sacramento Vice Mayor Rob Fong. "There is renewed interest on everyone's part to engage on a very serious level on this issue, and we're very heartened by regional support for this project. That's crucial to the ultimate success."
Geoff Davey, the county's chief financial officer, said an arena solution needs to involve the entire county.
"It would be incorrect to assume it is just a sales tax," Davey said. "We are no more than a week or two out (from presenting a plan) because the timetable is so short."
Consideration is being given to myriad options, including a quarter-cent countywide sales tax increase, land swaps and participation by other cities within Sacramento County, according to officials involved in arena talks.
If a tax is part of the equation, by law voters must give consent by Nov. 7. The Sacramento County Board of Supervisors must approve the ballot language by Aug. 1, said county counsel Robert Ryan.
Should it miss that deadline, the next possible date that the board could schedule would be June 2008, county officials said.
Darrell Steinberg, a former state assemblyman and Sacramento city councilman working for the owners of the Sacramento Kings to broker the arena deal, said once funding ideas are on the table, negotiations with the Sacramento Kings can begin in earnest.
"The Maloofs are ready to roll up their sleeves and get to work," Steinberg said. "We want to hear what the city and county are thinking and have to say. Once that happens (the Maloofs) will be fully engaged."
With a history of several failed attempts, arena supporters are wary of providing too many details or rushing the process despite the tight deadline. Only when all key stakeholders are in agreement will a plan be made public, said John Dangberg, a Sacramento assistant city manager for economic development and the city's arena point person.
Supervisor Roger Dickinson said keeping the Kings is important to the region, but he stressed that any deal "must make good business sense. It must make sense to the public."
Dickinson pointed out that Arco Arena is privately owned and suggested that if the Kings leave the area, the region would lose the use of that facility. If a new arena is built, the supervisor said it's possible the Kings would sell the arena to repay the debt owed to the city.
Supervisor Illa Collin said, "It makes sense to put something on the ballot that voters can say yes or no."
"I'm always in favor of giving voters a choice," she said. "Maybe we'll have something that will really work this time and serve the broad community."
As funding options have been explored over the past few months, attention has turned to a sales tax increase. It's the only type of tax that can be placed on a countywide ballot without separate votes by individual cities within the county, Ryan said.
A sales tax increase would be expected to generate approximately $60 million annually, said Russell Fehr, the city's finance director. The current sales tax rate in the county is 7.75 percent.
Another crucial issue is whether a proposed tax increase is for general or specific purposes. If a general sales tax increase is proposed on the ballot -- without any details on how the money would be spent -- it requires only a simple majority approval from voters. Specific taxes require two-thirds vote and are difficult to pass.
In the case of arena funding, Davey said arena backers are considering asking for a general sales tax increase. In addition, they would include a companion advisory question on how to use the money.
Ryan said that strategy is legally viable. In 1998, the state Supreme Court upheld a Santa Clara County sales tax increase passed for no specified purpose on a simple majority vote. The same ballot included a separate measure that said extra sales tax funds should be used for transportation improvements.
The court ruled that the two measures were not legally linked and therefore the two-thirds "supermajority" vote required for specific purposes was not needed, according to court documents.
It remains to be seen whether arena backers will be able to successfully convince even a majority of voters that a new arena is necessary, despite reports from the NBA that Arco is outdated and will need replacing. The idea of public financing could be an even tougher sell.
"To me, I don't use it so I shouldn't have to pay for it," said Nora Borja, a Citrus Heights resident. "We already pay enough in taxes."
But Chris Uboma, who works in Sunrise Mall, said Sacramento needs a shot in the arm.
"I don't have (any) problem with it. It's going to attract more attention to the city. It's going to enhance the city for people to come here."
Uboma would like to see the arena in a downtown location -- a view shared by Mayor Heather Fargo. Fargo, who was unavailable for comment Thursday, believes that downtown, particularly the Union Pacific railyard, would be a good arena location, said Chuck Dalldorf, an adviser working on special projects for the mayor.
Although the railyard is still in escrow, its developer, Thomas Enterprises Inc., in March submitted a plan setting aside a large portion of the property for a sports and entertainment district. Five acres were included for an arena.
The developer is now getting permits from the city on how to use the railyard, including an arena, said Suheil Totah, vice president for development for Thomas Enterprises.
"We're getting those approvals so we could build an arena if the financing plan comes together," Totah said Thursday. "We think it's something the community and the city want to see. It will be a great addition for our overall project."
About the writer: The Bee's Terri Hardy can be reached at (916) 321-1073 or thardy@sacbee.com.
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I hope this finally works (*please*). If it doesn't that will truly be the beginning of the end of the Sacramento era of the Kings.
