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Bill would aid stadium funding
Proposed legislation expands state's bank power to issue bonds for new facilities.
By Kevin Yamamura -- Bee Capitol Bureau
Published 2:15 am PDT Monday, August 29, 2005
Story appeared on Page A3 of The Bee
Besides debating where the Kings would finish in the NBA playoffs, fans this spring wondered if their team will ever find a new arena in Sacramento.
As the experience showed, stadium financing typically has been a local endeavor - with cities and counties deciding for themselves whether they help a sports team or entertainment company build a new arena.
But state Sen. Kevin Murray has proposed injecting the state into the stadium business by allowing the California Infrastructure and Economic Development Bank to issue bonds and sell licensing and sponsorship rights to pay for new venue construction.
Murray, a Culver City Democrat, said Senate Bill 4 would enable cities, team owners and entertainment companies to raise more money through state-issued revenue bonds and the government's tax-exempt status. He insisted that his plan is not directed at one city or team and would help build not only stadiums but also concert halls and other arts venues.
"This will help anybody and any entity interested in building a big public performance facility," Murray said. "It could be a stadium, an arena or a music hall, all of which we have a dearth of in California."
Earlier versions of SB 4 would have established a new "public performance facilities authority." But facing pressure from critics who suggested a new state agency added needless bureaucracy, Murray changed the bill to expand the powers of the existing state Infrastructure Bank, also known as the I-Bank.
The bank last year handled $2.5 billion in loans and financing for public and private projects, typically having to do with public works and manufacturing, said Stan Hazelroth, I-Bank executive director.
SB 4 expands the bank's powers but prevents the state from using taxpayer money to pay for bonds. Rather, the I-Bank would serve as a conduit for local governments and private companies to receive the tax and cost benefits of public financing, Murray said.
Under the bill, the Infrastructure Bank could issue bonds to be repaid by revenue from tickets and other fees. It also could sell premium seat licenses, naming rights and sponsorships - and avoid federal income taxes that a private company might face.
The Assembly Appropriations Committee moved SB 4 to the Assembly floor Thursday. The panel amended the bill so that it applies only to new projects - not renovations or reconstructions.
SB 4 hasn't raised eyebrows from cities and counties - and many who have studied the proposal suggest that local officials already can do much of what the bill outlines for the I-Bank.
"I think local government currently has the authority to do this if they want to create a stadium," said state Sen. Deborah Ortiz, D-Sacramento, who abstained from voting on the bill when it passed the Senate in June. "I'm not sure why the state should be making decisions and issuing bonds for these uses."
Murray conceded that local governments can already sell lower-cost revenue bonds and obtain tax breaks on licensing revenue. But he said he envisions the state as an easier option for cities that do not want to establish their own joint powers authority or shoulder the financing duties.
Murray said he has not spoken to anyone from the city of Sacramento about his bill - and that he has intentionally kept it city-neutral to avoid any appearance that he wants to help one team in particular.
In Sacramento, the Kings play in Arco Arena, built in 1988 and one of the National Basketball Association's oldest arenas. Team owners have said a new arena would cost an estimated $400 million. Various financing schemes have come and gone in recent years, including a failed one this spring involving a private partnership of Natomas landowners who sought expedited farmland development in exchange for stadium money.
SB 4 alone won't make or break any Kings arena deal, said Robert Waste, a professor of public policy and administration at California State University, Sacramento.
"It puts one more tool in the toolbox of building stadiums and performance halls, but it's not a silver bullet to solve the problem," Waste said. "The question for people in our region is much more bottom line - do the Kings add value to the region, and should we go after (an arena) or not? If the answer is yes, then we find creative ways to do it. If not, then SB 4 or four SB 4s are not going to make a difference."
Sonja Brown, a spokeswoman for Maloof Sports and Entertainment, owner of the Kings, said Murray asked the company to support his bill, but the company declined and officially remains neutral. She said the company decided "the best thing we can do is build teams that continue to engender community pride and unity."
Sacramento Mayor Heather Fargo was unavailable for comment. Ortiz said she has been concerned that SB 4 gives the state and private interests too much say in local land use.
"Local governments should embark upon these projects and decide what is best based on local issues," Ortiz said. "If it's a local land use issue, the local government is the one that has to deal with the infrastructure and impacts."
The League of California Cities initially had similar concerns, said the group's legislative director, Dan Carrigg. The advocacy group had the bill amended to remove an eminent domain reference and to include a requirement that all activities receive local land use approval.
The association still has taken no position on the bill.
"Local governments want to make sure they control where these facilities are located, what they look like," said Carrigg.
The Anschutz Entertainment Group - owner of the multipurpose Staples Center in Los Angeles - has been one of only two listed supporters for the bill this year. AEG in 2002 floated a plan to build a new football stadium in downtown Los Angeles that ultimately failed.
AEG spokesman Michael Roth said his company has no plans to build a new stadium nor take advantage of SB 4. He said his company supports the bill because venues such as Staples Center "can be powerful economic tools to a city and state."
Some have speculated that Murray is pushing the bill only to promote the construction of a new football stadium in Los Angeles as the city tries to attract a National Football League franchise.
But Murray said that is not the case - especially as talks focus more on the Los Angeles Memorial Coliseum, which already has a commission that can do what his bill proposes. "There are all kinds of events out there - and we just don't have enough places to put them in California, a state with 35 million people," Murray said.
http://www.sacbee.com/content/politics/story/13489386p-14330074c.html
Bill would aid stadium funding
Proposed legislation expands state's bank power to issue bonds for new facilities.
By Kevin Yamamura -- Bee Capitol Bureau
Published 2:15 am PDT Monday, August 29, 2005
Story appeared on Page A3 of The Bee
Besides debating where the Kings would finish in the NBA playoffs, fans this spring wondered if their team will ever find a new arena in Sacramento.
As the experience showed, stadium financing typically has been a local endeavor - with cities and counties deciding for themselves whether they help a sports team or entertainment company build a new arena.
But state Sen. Kevin Murray has proposed injecting the state into the stadium business by allowing the California Infrastructure and Economic Development Bank to issue bonds and sell licensing and sponsorship rights to pay for new venue construction.
Murray, a Culver City Democrat, said Senate Bill 4 would enable cities, team owners and entertainment companies to raise more money through state-issued revenue bonds and the government's tax-exempt status. He insisted that his plan is not directed at one city or team and would help build not only stadiums but also concert halls and other arts venues.
"This will help anybody and any entity interested in building a big public performance facility," Murray said. "It could be a stadium, an arena or a music hall, all of which we have a dearth of in California."
Earlier versions of SB 4 would have established a new "public performance facilities authority." But facing pressure from critics who suggested a new state agency added needless bureaucracy, Murray changed the bill to expand the powers of the existing state Infrastructure Bank, also known as the I-Bank.
The bank last year handled $2.5 billion in loans and financing for public and private projects, typically having to do with public works and manufacturing, said Stan Hazelroth, I-Bank executive director.
SB 4 expands the bank's powers but prevents the state from using taxpayer money to pay for bonds. Rather, the I-Bank would serve as a conduit for local governments and private companies to receive the tax and cost benefits of public financing, Murray said.
Under the bill, the Infrastructure Bank could issue bonds to be repaid by revenue from tickets and other fees. It also could sell premium seat licenses, naming rights and sponsorships - and avoid federal income taxes that a private company might face.
The Assembly Appropriations Committee moved SB 4 to the Assembly floor Thursday. The panel amended the bill so that it applies only to new projects - not renovations or reconstructions.
SB 4 hasn't raised eyebrows from cities and counties - and many who have studied the proposal suggest that local officials already can do much of what the bill outlines for the I-Bank.
"I think local government currently has the authority to do this if they want to create a stadium," said state Sen. Deborah Ortiz, D-Sacramento, who abstained from voting on the bill when it passed the Senate in June. "I'm not sure why the state should be making decisions and issuing bonds for these uses."
Murray conceded that local governments can already sell lower-cost revenue bonds and obtain tax breaks on licensing revenue. But he said he envisions the state as an easier option for cities that do not want to establish their own joint powers authority or shoulder the financing duties.
Murray said he has not spoken to anyone from the city of Sacramento about his bill - and that he has intentionally kept it city-neutral to avoid any appearance that he wants to help one team in particular.
In Sacramento, the Kings play in Arco Arena, built in 1988 and one of the National Basketball Association's oldest arenas. Team owners have said a new arena would cost an estimated $400 million. Various financing schemes have come and gone in recent years, including a failed one this spring involving a private partnership of Natomas landowners who sought expedited farmland development in exchange for stadium money.
SB 4 alone won't make or break any Kings arena deal, said Robert Waste, a professor of public policy and administration at California State University, Sacramento.
"It puts one more tool in the toolbox of building stadiums and performance halls, but it's not a silver bullet to solve the problem," Waste said. "The question for people in our region is much more bottom line - do the Kings add value to the region, and should we go after (an arena) or not? If the answer is yes, then we find creative ways to do it. If not, then SB 4 or four SB 4s are not going to make a difference."
Sonja Brown, a spokeswoman for Maloof Sports and Entertainment, owner of the Kings, said Murray asked the company to support his bill, but the company declined and officially remains neutral. She said the company decided "the best thing we can do is build teams that continue to engender community pride and unity."
Sacramento Mayor Heather Fargo was unavailable for comment. Ortiz said she has been concerned that SB 4 gives the state and private interests too much say in local land use.
"Local governments should embark upon these projects and decide what is best based on local issues," Ortiz said. "If it's a local land use issue, the local government is the one that has to deal with the infrastructure and impacts."
The League of California Cities initially had similar concerns, said the group's legislative director, Dan Carrigg. The advocacy group had the bill amended to remove an eminent domain reference and to include a requirement that all activities receive local land use approval.
The association still has taken no position on the bill.
"Local governments want to make sure they control where these facilities are located, what they look like," said Carrigg.
The Anschutz Entertainment Group - owner of the multipurpose Staples Center in Los Angeles - has been one of only two listed supporters for the bill this year. AEG in 2002 floated a plan to build a new football stadium in downtown Los Angeles that ultimately failed.
AEG spokesman Michael Roth said his company has no plans to build a new stadium nor take advantage of SB 4. He said his company supports the bill because venues such as Staples Center "can be powerful economic tools to a city and state."
Some have speculated that Murray is pushing the bill only to promote the construction of a new football stadium in Los Angeles as the city tries to attract a National Football League franchise.
But Murray said that is not the case - especially as talks focus more on the Los Angeles Memorial Coliseum, which already has a commission that can do what his bill proposes. "There are all kinds of events out there - and we just don't have enough places to put them in California, a state with 35 million people," Murray said.
http://www.sacbee.com/content/politics/story/13489386p-14330074c.html
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Never trust a State politician! Somebody is being bribed with power or money. I would vote against it despite the bill's potential value to the Maloofs. I just don't like the concept of giving the State more control.
