Bretón: Wilson right guy for arena talks

[VF21]

http://www.sacbee.com/kings/story/463201.html

Marcos Bretón: Wilson's the right guy for arena talks
By Marcos Bretón - mbreton@sacbee.com
Last Updated 12:55 am PDT Wednesday, October 31, 2007
Story appeared in METRO section, Page B1

When Sacramento officials flew to Las Vegas last summer to "negotiate" an arena deal with the Kings owners, the locals were like chickens entering a rotisserie.

They weren't guests at Joe and Gavin Maloof's table. They were the main course.

With all the leverage stacked in the Kings' favor, the Sacramento folks emerged from meetings as if flattened by a Peterbilt. The Maloofs emerged like they'd had a visit to a masseuse.

Hold that thought. And fast forward to former California Gov. Pete Wilson being retained by Cal Expo officials as the top gun against the NBA in the new effort to negotiate construction of an arena at Cal Expo.

Wilson's fee of $400-an-hour has evoked sarcasm – especially as a "discounted" price.

Get over it. It could turn out to be a bargain.

If there is one thing the former governor understands, it's power and how to use it. Because of this – and because Wilson has advantages his predecessors didn't – Sacramento arena negotiations are in a fair fight for the first time.

"I feel pretty hopeful," said Sen. Darrell Steinberg, D-Sacramento, who represented the Maloofs in last year's failed negotiations and is not involved this time around. "A lot of the barriers and obstacles have been removed."

Steinberg means taxes are off the table. No public vote is necessary. And two sides that couldn't get along – the Maloofs and officials from Sacramento city and county – are on the sidelines.

What we're talking about now is a very complex real estate deal. The idea is to bring in a developer to build a commercial project at state-owned Cal Expo that would produce enough money to build an arena and revamp the fairgrounds. Cal Expo has to make sure it benefits without having the fairgrounds reduced to a postage stamp.

Will it make sense financially for either side? No one knows; no meetings are currently scheduled.

But don't be surprised if negotiations are headquartered in California. It's hard to imagine Wilson schlepping anywhere to negotiate a deal where the NBA approached Cal Expo – and not the other way around.

So in the days before real negotiations begin, what's missing around here is a community education for how these deals work.

Around town, there still seems to be an unrealistic sentiment that a deal can and should be 100 percent privately financed.

You heard it here first: That's not going to happen. Some public resources – in infrastructure costs or road improvements on Capital City Freeway – undoubtedly will come into play.

People like Wilson, the Maloofs and the lawyers stand to make a lot of money. Developers could make a lot of money.

What would that mean? That a Cal Expo arena would be like every other new arena and stadium in America. Even AT&T Park in San Francisco was made possible by public money for infrastructure and redevelopment. Even "progressive" cities such as Minneapolis have raised taxes unilaterally to build a palatial baseball stadium. Cities with far worse deficits than Sacramento – Washington, D.C., for one – have broken the public bank to build a sports palace.

We're not talking about that here.

If it happens, a Cal Expo arena would be built with a lot of private money, would be vetted with a lot of daylight.

It shouldn't matter if people get rich, too. It should matter that it gets done right and Sacramento is better for it.

About the writer: Reach Marcos Breton at (916) 321-1096 or mbreton@sacbee.com.

 

[VF21]

Hey, Arena Skeptic? Did you see this part?

"I feel pretty hopeful," said Sen. Darrell Steinberg, D-Sacramento, who represented the Maloofs in last year's failed negotiations and is not involved this time around. "A lot of the barriers and obstacles have been removed."

Steinberg means taxes are off the table. No public vote is necessary. And two sides that couldn't get along – the Maloofs and officials from Sacramento city and county – are on the sidelines.

Bottom line is the article's bottom line...

It shouldn't matter if people get rich, too. It should matter that it gets done right and Sacramento is better for it.

 

[kennadog]

Yes that bottom line is the real point. This seems like a decent idea and probably Sacramento's last chance. I hope it works. I've said all along, I'd like to see a new arena venue in Sacrmento, with or without the Kings (preferably with). I have no faith in the city or county to build such a venue.

By the way, I was reading in the Bee the other day that Thomas Enterprises' budget for development of the railyards includes getting $3 million in public subsidy from the city for phase I development and $7 million in public subsidy for phase II of the development. Mainly all for infrastructure. Of course, the city has no idea how it's going to come up with any of the money, so don't expect any development there in the near future.

That's a total of $1 billion in public subsidy. (As I've said over and over in here, cities and counties give public money to private developers all the time.) Other developers have walked away from the railyards and its mainly been due to the financial infeasibility for them.

Sometimes, if a city wants to get something done, they are going to have to give a public susbsidy. The railyards will never been developed without a lot of it. Thomas Enterprises stands to make a lot of money out of the dvelopment along the way. Developers get big bucks for what they do, but they also take a big financial risk. Is the reward comensurate with the risk? That's a whole 'nother discussion. Suffice it to say that plenty of developers have been bankrupted by developments that didn't pan out.

 

[Arena Skeptic]

Hey, Arena Skeptic? Did you see this part?



Bottom line is the article's bottom line...

Sure, I read it. Darrell Steinberg is very naive.

Pretty simple, really.

Doesn't matter that we CAN do it without a vote. I've always said they CAN do it without a vote, from a legal POV. There is no question about it.

It'd be political suicide, that's all. When 80% of the voters vote against funding or even negotiating, and then you do it anyway, you tend to get a reaction, little of it being positive.

Feel free to proceed, but when the opponents to this start to organize, don't say I didn't warn you. Our City has a $50 million hole in its budget. If the City decides to guarantee loans (not necessarily fund them; the funding would have to be 100% private) in the face of a $50 million hole, you will not get a majority on the Council to vote for it.

Note that I may have few objections if this is funded privately.

One of the galling parts of Q&R was the Maloofs' insistence that this would be a publicly-owned arena; it's just that a single private party would have controlled it 100% during its useful lifetime. That sounds an awful lot like a pure subsidy to me.

 

[kennadog]

Sure, I read it. Darrell Steinberg is very naive.

Pretty simple, really.

Doesn't matter that we CAN do it without a vote. I've always said they CAN do it without a vote, from a legal POV. There is no question about it.

It'd be political suicide, that's all. When 80% of the voters vote against funding or even negotiating, and then you do it anyway, you tend to get a reaction, little of it being positive.

Feel free to proceed, but when the opponents to this start to organize, don't say I didn't warn you. Our City has a $50 million hole in its budget. If the City decides to guarantee loans (not necessarily fund them; the funding would have to be 100% private) in the face of a $50 million hole, you will not get a majority on the Council to vote for it.

Note that I may have few objections if this is funded privately.

One of the galling parts of Q&R was the Maloofs' insistence that this would be a publicly-owned arena; it's just that a single private party would have controlled it 100% during its useful lifetime. That sounds an awful lot like a pure subsidy to me.

And Thomas is asking for $1 billion in pure subsidy from the city for the railyards development. Or didn't you read that article in the Bee?

 

[Circa_1985_Fan]

And Thomas is asking for $1 billion in pure subsidy from the city for the railyards development. Or didn't you read that article in the Bee?

I doubt it...but I just think that no matter WHAT plan is drawn up for a new arena from now until eternity...the only one he's probably in favor of in ANY way is: Maloofs pay 100%.