It isn't just suites, people!
It is kitchens that are woefully undersized (and not enough of them). It is loading docks that can't handle the rapid turnarounds. It is lousy ice-making equipment that can't make ice quickly. It is small locker rooms. It is the inability to hold newer events based on staging and presentation limitations. It is functional and economical obsolescence of a structure. You are focusing on probably the least important aspect of the reason the building needs to be replaced!
Those items are required for timely events and new revenue streams.
I wonder how often we'll have to keep saying this? I think I'm just going to have to write up a list so I don't have to keep typing it all over again. Its luxury boxes and club seats, but that is hardly the whole reason. I think they are shooting for about the same number of suites as San Antonio, which is about 60.
Things that matter for all events and some that don't matter for basketball at all (the ones I can remember, I know there are other reasons):
1) A better ice rink. Modern rinks can make ice in a few hours. Arco takes two days, meaning you could never have a hockey team and event turn-around is inefficient costing you time that could be used for another non-ice event. Some arenas can have a hockey game that day and non-ice event that night!
2) The ice rink needs to be in a position that is under the court, going the same direction. For some unknown reason the ice at Arco is at right angles to the court and they actually have to remove seating for ice events.
3) The marshalling area is too small. This is the area where events unload all their equipment and arrange it for easy and quick moving in and out of the arena as needed. This also costs time/money to events. It takes them longer to move stuff in and out and is difficult. Some events just can't be staged for the lack of room in this area.
4) Most modern arenas have 4-5 loading docks. Our arena has two and apparently one cannot be used now, as it has been deemed unsafe.
5) There is only one kitchen. Ridiculous by modern standards.
6) There is only one, ground-level concourse. This makes egress from the facility much harder and probably is a safety hazard. I can't imagine people having to all exit quickly form Arco, without people being trampled to death. Th United Center in Chicago holds 22,000 people. When I exited a full house game, I had loads of space around me. At Arco, its like cows going down a chute, all croweded together cheek by jowl and barely able to move at times.
7) The visitor's locker room is tiny and does not have hot water. Apparently, one coach told his women athletes to keep their leotards on when showering to try and keep a little bit warm. How embarrassing for Sacramento is that?
8) The roof needs replacing. This would cost millions just by itself. And there's no reason to spend millions on an economically obsolete building. Sort of like spending lots of money on shiny, fancy rims for a car that's on the verge of not running.
9) And as the city's report from consulting engineers, most of these things cannot be fixed by remodeling, because the foundation is inadeqaute to support such renovation. It's cheaper to build new.
10) I think we have the only NBA arena with wooden floors under most seats. Of course, that is the source of the beloved Arco "thunder." I would miss that foot-stomping, but I can live without it.

Some of the seating was from Arco I.
The NCAA doesn't consider Arco adequate for college basketball, yet our NBA team plays there. Good grief.
There are college arenas nicer than Arco. If you've been to more modern areans, you realize how woefully pathetic Arco is. It is not worthy of Sacramento at this point.