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http://sacramento.bizjournals.com/sacramento/stories/2004/12/06/story1.html?t=printable
Arena deal may spur 40,000 new homes
Landowners want cap on Maloof funding
Mike McCarthy, Sacramento Business Journal, 12-3-04
A proposal to speed the development of 10,000 acres of rural North Natomas, and use some of the profits to buy a new arena for the Sacramento Kings, could lead to the construction of more than 40,000 new homes on the land.
That possibility is one of several emerging as the arena plan proposed by Sacramento County Sheriff Lou Blanas continues to get refined by landowners, their consultants and public officials.
Among the new developments:
Most of the key North Natomas landowners who are being asked to fund the new arena want a limit on how much money Maloof Sports & Entertainment, which owns the Kings, gets from them.
A survey of recent homebuyers in the Sacramento area said 51 percent would back a plan to speed development in the area if the landowners help pay for the arena. The venture's backers plan a ballot initiative to that effect in November 2005.
Building 40,000 homes would make the Natomas Joint Vision Area larger than any new-home community proposed in the Sacramento region. The sheer volume of house lots would help the landowners easily fund an approximately $350 million arena. It could probably pay for more than that.
Some owners want a limit: After two previous efforts to build a new venue for the Kings in downtown Sacramento went nowhere, Blanas -- after talking it over with a friend, land developer Angelo Tsakopoulos -- proposed in September that the landowners controlling most of the 10,000 acres kick in money to build a new arena.
In exchange, they get faster development processing for their property, probably by Sacramento County's government.
The area, mostly north of Elkhorn Boulevard, was designated for eventual development in a December 2002 "joint vision" agreement between Sacramento city and county. The deal was that the city would eventually annex the land and share future revenue from its development with the county.
Landowners in the vision area have been trying for most of a decade to get the city or county to let them build. They haven't seen much action stemming from the joint vision.
They are understandably eyeing Blanas' idea closely, although sources said most are still examining the feasibility and have not signed off on it yet.
The arena might cost $350 million, take or add about $50 million. Most of the landowners would rather the arena cost less than more. They are pushing for a "cap or specified amount" on the money going to Maloof Sports, said Jeff Raimundo, a principal in the public relations firm of Townsend Raimundo Besler & Usher, hired by the landowners to help with the political aspect of the Blanas plan.
Under the current proposal, the landowners face a somewhat open-ended expense for the arena.
Currently, the idea calls for the landowners to donate 20 percent of their net proceeds from selling the land -- after parcel maps are approved -- toward an arena and a new charitable foundation that would support the arts, after-school programs and sports programs for children, Raimundo said.
But, said informed sources, the concept could produce net revenue from land sales of much more than the $300 million arena cost estimated by backers of the Blanas plan. A 20 percent share could surpass $600 million. Some landowners, dreading needless expenses, want the cap.
A minority of the landowners see big profits whatever the arena might cost, the sources said. They aren't as worried about overruns.
Bridge loan is out, bonds might be in
The land would be sold for development over decades, making it impossible to ensure payments for the arena anytime soon, let alone within the roughly four years targeted by the parties involved. The solution is to find a way to fund the arena up-front.
Previously the planners considered securing a bridge loan, repaid by future land sales. Raimundo said that idea is no longer on the table.
Consultants for the group are looking at other ways to raise the money, including a sale of bonds. Bonds are only viable, however, on land with a more immediate potential for development. One source estimated that some 3,000 acres would be in position to develop earlier and support the bonds.
The likeliest tracts for early development include 1,200 acres in which major local developer Tsakopoulos has an interest, including the 525-acre Greenbriar Farms and 134-acre West Lakeside -- properties with good locations on either side of Interstate 5 southeast of Sacramento International Airport.
Should Tsakopoulos and the other first-phase landowners chip in more than their 20 percent share, they would be repaid by the other landowners.
Number has roots in a SACOG plan
Sources close to the talks among developers and Sacramento city officials say the number of homes being considered for the land range from 35,000 to 44,000. That's based on the assumption that 6,500 to 7,000 of the acres will be approved for development, with the balance of the land remaining open space, said the sources.
At this point, the plan also calls for another 10,000 acres of Natomas to be set aside as permanent open space, and the developers would also secure 50,000 acres outside the basin as preserve, Raimundo said.
All the ideas are very tentative, he said.
The idea of up to 44,000 homes comes from the Blueprint program, a proposal for the region's future development drafted by the Sacramento Area Council of Governments.
SACOG created theoretical land-use plans for virtually all of the land in the six-county Sacramento region by getting opinions from representatives of each community in the region. The resulting consensus plan, or "preferred alternative" for the joint- vision area, calls for 44,214 homes.
That would give the joint-vision area more homes than usual per acre; SACOG projected that today's standard planning practices would put slightly fewer than 26,000 homes on the land. But the higher density should encourage people to use mass transit, walk and bike, reducing the impact of car trips on local air quality.
It's about land, not the Kings
Environmentalists are watching the whole project suspiciously.
"This is really a land-use deal," said David Mogavero, a spokesman for the Environmental Council of Sacramento. "The question is, what are the implications for the community of development of that area? It's not 'do we want to get money for a sports arena.' "
Although the Blanas plan remains a work in progress, some or all of these ideas may show up in an initiative planned for a November 2005 ballot in the city and county of Sacramento.
The measure, being drafted by the San Francisco law firm of Nielsen, Merksamer, Parrinello, Mueller & Naylor, would ask voters to approve the Blanas plan.
The public might go along, if a recent poll in Market Perspectives Annual Home Survey is prophetic. Market Perspectives, a local firm that analyzes the new-home market, surveyed 2,500 people who bought homes in the Sacramento area this year.
Of those, 498, or 19.9 percent, responded, and 51 percent of them favor the idea of funding the arena by allowing the development. Another 22 percent are uncertain, and 28 percent said "no."
"The majority favor it," said John Schleimer, head of Market Perspectives. "And I would assume that of the 22 percent who are not sure, half would eventually favor it."
Staff writer Kelly Johnson contributed to this article.
Arena deal may spur 40,000 new homes
Landowners want cap on Maloof funding
Mike McCarthy, Sacramento Business Journal, 12-3-04
A proposal to speed the development of 10,000 acres of rural North Natomas, and use some of the profits to buy a new arena for the Sacramento Kings, could lead to the construction of more than 40,000 new homes on the land.
That possibility is one of several emerging as the arena plan proposed by Sacramento County Sheriff Lou Blanas continues to get refined by landowners, their consultants and public officials.
Among the new developments:
Most of the key North Natomas landowners who are being asked to fund the new arena want a limit on how much money Maloof Sports & Entertainment, which owns the Kings, gets from them.
A survey of recent homebuyers in the Sacramento area said 51 percent would back a plan to speed development in the area if the landowners help pay for the arena. The venture's backers plan a ballot initiative to that effect in November 2005.
Building 40,000 homes would make the Natomas Joint Vision Area larger than any new-home community proposed in the Sacramento region. The sheer volume of house lots would help the landowners easily fund an approximately $350 million arena. It could probably pay for more than that.
Some owners want a limit: After two previous efforts to build a new venue for the Kings in downtown Sacramento went nowhere, Blanas -- after talking it over with a friend, land developer Angelo Tsakopoulos -- proposed in September that the landowners controlling most of the 10,000 acres kick in money to build a new arena.
In exchange, they get faster development processing for their property, probably by Sacramento County's government.
The area, mostly north of Elkhorn Boulevard, was designated for eventual development in a December 2002 "joint vision" agreement between Sacramento city and county. The deal was that the city would eventually annex the land and share future revenue from its development with the county.
Landowners in the vision area have been trying for most of a decade to get the city or county to let them build. They haven't seen much action stemming from the joint vision.
They are understandably eyeing Blanas' idea closely, although sources said most are still examining the feasibility and have not signed off on it yet.
The arena might cost $350 million, take or add about $50 million. Most of the landowners would rather the arena cost less than more. They are pushing for a "cap or specified amount" on the money going to Maloof Sports, said Jeff Raimundo, a principal in the public relations firm of Townsend Raimundo Besler & Usher, hired by the landowners to help with the political aspect of the Blanas plan.
Under the current proposal, the landowners face a somewhat open-ended expense for the arena.
Currently, the idea calls for the landowners to donate 20 percent of their net proceeds from selling the land -- after parcel maps are approved -- toward an arena and a new charitable foundation that would support the arts, after-school programs and sports programs for children, Raimundo said.
But, said informed sources, the concept could produce net revenue from land sales of much more than the $300 million arena cost estimated by backers of the Blanas plan. A 20 percent share could surpass $600 million. Some landowners, dreading needless expenses, want the cap.
A minority of the landowners see big profits whatever the arena might cost, the sources said. They aren't as worried about overruns.
Bridge loan is out, bonds might be in
The land would be sold for development over decades, making it impossible to ensure payments for the arena anytime soon, let alone within the roughly four years targeted by the parties involved. The solution is to find a way to fund the arena up-front.
Previously the planners considered securing a bridge loan, repaid by future land sales. Raimundo said that idea is no longer on the table.
Consultants for the group are looking at other ways to raise the money, including a sale of bonds. Bonds are only viable, however, on land with a more immediate potential for development. One source estimated that some 3,000 acres would be in position to develop earlier and support the bonds.
The likeliest tracts for early development include 1,200 acres in which major local developer Tsakopoulos has an interest, including the 525-acre Greenbriar Farms and 134-acre West Lakeside -- properties with good locations on either side of Interstate 5 southeast of Sacramento International Airport.
Should Tsakopoulos and the other first-phase landowners chip in more than their 20 percent share, they would be repaid by the other landowners.
Number has roots in a SACOG plan
Sources close to the talks among developers and Sacramento city officials say the number of homes being considered for the land range from 35,000 to 44,000. That's based on the assumption that 6,500 to 7,000 of the acres will be approved for development, with the balance of the land remaining open space, said the sources.
At this point, the plan also calls for another 10,000 acres of Natomas to be set aside as permanent open space, and the developers would also secure 50,000 acres outside the basin as preserve, Raimundo said.
All the ideas are very tentative, he said.
The idea of up to 44,000 homes comes from the Blueprint program, a proposal for the region's future development drafted by the Sacramento Area Council of Governments.
SACOG created theoretical land-use plans for virtually all of the land in the six-county Sacramento region by getting opinions from representatives of each community in the region. The resulting consensus plan, or "preferred alternative" for the joint- vision area, calls for 44,214 homes.
That would give the joint-vision area more homes than usual per acre; SACOG projected that today's standard planning practices would put slightly fewer than 26,000 homes on the land. But the higher density should encourage people to use mass transit, walk and bike, reducing the impact of car trips on local air quality.
It's about land, not the Kings
Environmentalists are watching the whole project suspiciously.
"This is really a land-use deal," said David Mogavero, a spokesman for the Environmental Council of Sacramento. "The question is, what are the implications for the community of development of that area? It's not 'do we want to get money for a sports arena.' "
Although the Blanas plan remains a work in progress, some or all of these ideas may show up in an initiative planned for a November 2005 ballot in the city and county of Sacramento.
The measure, being drafted by the San Francisco law firm of Nielsen, Merksamer, Parrinello, Mueller & Naylor, would ask voters to approve the Blanas plan.
The public might go along, if a recent poll in Market Perspectives Annual Home Survey is prophetic. Market Perspectives, a local firm that analyzes the new-home market, surveyed 2,500 people who bought homes in the Sacramento area this year.
Of those, 498, or 19.9 percent, responded, and 51 percent of them favor the idea of funding the arena by allowing the development. Another 22 percent are uncertain, and 28 percent said "no."
"The majority favor it," said John Schleimer, head of Market Perspectives. "And I would assume that of the 22 percent who are not sure, half would eventually favor it."
Staff writer Kelly Johnson contributed to this article.