Lets hear some ideas

JB_kings · Nov 11, 2006

Frankly I've been a bit down this week over this arena situation. None of these finger pointing articles are helping matters. So I propose we channel some of our energies into coming up with ideas that don't involve a public vote and have reasonable chance of being successful. There have been a number of ideas scattered among the threads. But it might help to have one thread to kick them around.
Oh, and lets keep this on the real side.

The first point is that the railyard is just too costly of a place to build. It could be done if the public was more willing to participate, but they clearly don't want to be involved.
The 100 acres of land north of Arco is a great no cost base to start with. Use 50-75 acres as your construction site for a new arena and parking. The other 25-50 acres should be rezoned to increase it's value and sold off to get some funds towards construction. Using this land should offset about 20 % of the projected 500 million price tag of a new building and parking. So now we are down to a 400 million.
Given that we want to avoid a public vote, there has to be about 400 million financed.
What has AKT offered? Last I heard he would put up 5,000 acres to the public in exchange for rezoning the 7,000 acres near Folsom and Rancho Murrietta. I have no idea how much that would bring. But I have heard that might be valued at 250 million. Unlike the Natomas rezone, AKT has all his partners signed off on the deal. If that is real, then we are much closer.
The Maloofs have committed an average of 4 million a year over 30 years.
I'm not a real estate dude, so help me out here kennadog. Borrowing 400 million - how much cash needs to be put forward by the JPA? Is this a 30 year mortgage? There appears to be a lot of land avaliable to be used as collateral.
Kick it around, it's much more fun than name calling...

voteno · Nov 11, 2006

financing deal

The arena is built on land currently owned by the Maloofs. The city gives the Maloofs 50% of the arena cost. The maloofs put up 20% of the cost, which they have said that they are willing to do. Do some rezoning for a developer who kicks in some money. Factor in ticket surcharges and you should be in the ballpark. The public would likely accept this as it is a reasonable use of taxpayer money and doesnt give to much away. I know most of you wont agree, but this is what the public would likely support. The wont support a complete give away that was proposed and they should not be expected to.

Sketcher · Nov 11, 2006

Possible Plan B

My idea on what comes next is in the thread "Back to Square One". Perhaps it should be moved to this thread.
---------------------------------------------
Sketcher is back. If the Maloofs are serious about looking for new arena ideas here's one I've publicly mothballed for months awaiting outcome of the vote. It was presented to John Thomas earlier this year and met with a short dismissive reply. Now, fellow Kings fans, here's a workable alternative for your consideration.

A) A NEW ARENA SHOULD BE BUILT AT THE CURRENT LOCATION OF THE ARCADE CREEK GOLF COURSE off of the Capital City Expressway.

Reasons why:

1) The City of Sacramento owns the land.
2) The land could be donated to the project at no cost.
3) The land around Arco and arena could be sold for $70MM.
4) Proceeds of the sale would be used to payoff the city loan.
5) Taxpayers would be happy to have that loan paid back.
6) The city would be more willing to underwrite bond financing.
7) The site has great visibility and access i.e. two freeways, light rail.
8) The site is within close proximity to an RTD light rail station.
9) The site would have far less infrastructure costs than the railyards.
10) The site could be designated a sports district with golf, softball, basketball facilities etc..
11) The site is preferable to Cal Expo because it has better access and parking lot configuration.
12) The trap shooting club is being replaced with a car dealership thus eliminating the argument that development shouldn't take place on that side of the freeway.
13) Team planes could land at McClelland although overflight issues might need to be addressed.
14) It appears to be a clean site, few observable and delaying environmental considerations.
15) This site could be under construction quicker than the railyards or Natomas.
16) Golfers can be redirected to other city courses.

B) HOW DO WE PAY FOR IT?

1) Given the sales tax defeat this must be primarily a combination of a private party equity contribution and facility user fee or seat tax. If the venue has 2MM users per year x $5-10 per seat fee on top of the ticket price, that revenue would pay for the interest on the construction bond financing. Taxpayers would be out of the equation except for guaranteeing the bonds which should be okay because they've gotten back the $70MM loan.

Dunmore Communities floated a trial balloon on developing all of the golf course property with your typical mixed use master planned project. Comments by city staff indicated that it would never happen. However, the highest and best public use for that property is probably not the Arcade Creek cow pasture golf course. This idea certainly makes a lot more sense than the other locations and has financial benefits as well.

kennadog · Nov 11, 2006

JB_kings said:

The bolded part is the real kicker here. Trying to rezone that land will cause a major battle. I work in housing development and it can take years and years for those kinds of battles. Development of the area south of 50 is already a touchy subject.

I was diappointed when the city was silent when the land owners/developers in North Natomas were willing to put up all the money to a nonprofit sports/entertainment authority that would own the arena. That was also in exchange for rezoning and moving up approval on developemnt.

The difference is, that the land in North Natomes is already planned for development. All the developers were asking for was to move up the timing. It fell through, because some not all of the owners decided they did not want to participate.

The silence from the city/county was deafening at that point. There was a bunch of major land owners still willing to participate, but they could no longer provide 100% financing. The city could have offered at that point to fill the gap, which would have been less than half, I believe. I still don't know why the public officials sat on their hands, when they might have had a chance at a mostly privately-financed arena.

There could have been undisclosed problems, but I never hear the city/county make one peep about possibly finding a way to fill the gap left by the land owners who did not want to participate (did not want to give up 10% of the value of the sale of their land). I think that would have been sweet.

kennadog · Nov 11, 2006

Sketcher said:

Having lived off the Capitol City freeway in that area, I would disagree with the better access. I also see no reason why construction would start there sooner than on the current arena site, where they could start tomorrow with money and plans.

The bond can't be just for construction. I assume you mean a construction/permanent loan with interest only payments? If you are making interest only payments, how does the bond principal get paid off at maturity? The city won't want to guarantee the bond financing, unless they are sure there is a dependable revenue stream to pay the principal and interest on the bond financing. If, for any reason, the revenue falls short on the payments, the city would then have to pay as the guarantor.

I do sort of like the bond financing idea, because the money doesn't come from the city/county, it comes from the investors. (The idea was floated once, then dropped.) You just have to have a pretty solid revenue stream for the monthly debt service, though. This is where generally he franchise is going to have to have a revenue stream that can pay the debt service. (Paul Allen's arena ownership went bankrupt, because it couldn't make enough money to pay the loan payments, basically.)

On the other hand, municipal bonds can offer a better interest rate than conventional bankers, because the interest to the investors is tax free on municipal bonds. Even with the better interest rate, the franchise might not make enough revenue to support the debt payments.

ShatteredVision · Nov 11, 2006

Cap City Freeway is a constant bottleneck coming from Downtown...

If they could only think of a way to revitalize Sacramento's history as a train hub, that would be a fun way to go...

Sketcher · Nov 13, 2006

Yes I did mean the municipal bonds would be a construction/permanent loan. As far as principal paydown, that would depend upon how much investor equity i.e. the Maloofs or others had put into the deal. Perhaps there would sufficient revenue stream to pay both interest and principal. Perhaps the Maloof's agree to paying down $15MM/yr on the principal and ultimately own the facility. The point being here a formula that only looks to the vested owners and users of the facility to pay for it is what will work here. The details are for someone smarter than me to figure out.

As to an earlier construction start, since the property is already publicly owned versus the Natomas site that is privately owned, I would think different rules of entitlement would apply (easier and faster). Especially now that there are strained relations between the Maloofs and the city about parking and other issues at Natomas that may loom larger than you think. The city has an easier canvas to paint on at Arcade Creek.

As to access, some prior quotes seem to indicate some Nimbism at work. No one wants it in their backyard because it generates more traffic. Yes Capital City Expressway is congested on commutes. But, what about the potential congestion on I-5 downtown that didn't deter efforts to build at the railyards? The Arcade Creek site can be approached from all directions including Roseville Road, Fulton, Watt, I-80, and the Capital City Expressway. And, as I stated there is an existing RTD station with parking not too far away which is something that may or may not ever happen in Natomas. Certainly improvements around Arcade Creek with new freeway on and offramps, and other access points will solve the problem of added congestion on Capital City Expressway. No site is perfect but the list of benefits for this site makes it a worthy contender for a new location.

Ryle · Nov 13, 2006

Nothing will get done with the City/County of Sacramento because they are to backward *** to get anything done. They couldn't even get a minor league baseball stadium done and the team had to go to West Sac(Yolo County) to get a stadium built.

I also tend to wonder why the Bee continues to pile on. It was almost embarrasing to read the Bee over the weekend with all of the negative opinions and the letters to the editor were a joke.

I will stand by my opinion that an Arena will be built but it will be in Natomas and I still believe that the Maloofs never wanted the stadium downtown in the first place.

kennadog · Nov 13, 2006

Not Nimbyism on my part as I don't live near the Capital City anymore. I've communted across I-80 down I-5 to downtown and I've also communted down the capital city freeway into downtown. There is no comparison. The capital city freeway is a far worse bottleneck, even midday on Saturdays, traffic can come to a complete stop.

It should be perfectly easy to build on the Natomas site. Since the land is zoned properly, all the entitlements are already there and so is the infrastructure. The city would have some say about location on the acreage and design, but that's it and is really magisterial. They could not stop a new arena from being built there.

JB_kings · Nov 13, 2006

Sketcher said:

Yes I did mean the municipal bonds would be a construction/permanent loan. As far as principal paydown, that would depend upon how much investor equity i.e. the Maloofs or others had put into the deal. Perhaps there would sufficient revenue stream to pay both interest and principal. Perhaps the Maloof's agree to paying down $15MM/yr on the principal and ultimately own the facility. The point being here a formula that only looks to the vested owners and users of the facility to pay for it is what will work here. The details are for someone smarter than me to figure out.

As to an earlier construction start, since the property is already publicly owned versus the Natomas site that is privately owned, I would think different rules of entitlement would apply (easier and faster). Especially now that there are strained relations between the Maloofs and the city about parking and other issues at Natomas that may loom larger than you think. The city has an easier canvas to paint on at Arcade Creek.

As to access, some prior quotes seem to indicate some Nimbism at work. No one wants it in their backyard because it generates more traffic. Yes Capital City Expressway is congested on commutes. But, what about the potential congestion on I-5 downtown that didn't deter efforts to build at the railyards? The Arcade Creek site can be approached from all directions including Roseville Road, Fulton, Watt, I-80, and the Capital City Expressway. And, as I stated there is an existing RTD station with parking not too far away which is something that may or may not ever happen in Natomas. Certainly improvements around Arcade Creek with new freeway on and offramps, and other access points will solve the problem of added congestion on Capital City Expressway. No site is perfect but the list of benefits for this site makes it a worthy contender for a new location.

Maybe I missed something in your idea, but the city owns the 100 acres north of Arco. It is not privately owned. The Arco land owned by the Maloofs doesn't really figure in since it has been widely assumed that they would sell that land to pay towards the '97 loan.

Sketcher · Nov 13, 2006

Thanks JB on the clarification of who owns what at Arco. It's my presumption that the more of the loan that is paid back from sale of Arco and the land around it would make it politically more feasible to go the bond financing route. The city needs to demonstrate they are reducing city indebtedness before taking on the guarantees for an arena bond. Staying in Natomas would reduce the amount that can be used to payoff the loan.

This is not a criticism of the replies I've received but I seem to sense on this forum the same type of negativity that pervades the overall populace. Someone presents an idea and if it doesn't fit with the viewer's preconceived notions or agenda, then it's fair game to start shooting holes in it. I'm not being overly sensitive here to criticism but I am saying that when the call goes out for alternatives everyone seems to think it's there duty to shoot holes in it. The Arcade Creek location has issues that need to be addressed. But where else in the city other than Cal Expo is there an alternative to Natomas? Rather than immediately point out the negatives we need to have a mindset of how do we view this issue in it's totality and find positive solutions for making it happen. Otherwise we end up in the political muck we find ourselves in after the election. The anti-arena folks are now emboldened by the vote. We need to get emboldened by a positive plan that makes sense with all things considered. If the arena goes in Natomas I'll be a happy camper. But this alternative makes sense as well.

Arena Skeptic · Nov 13, 2006

The biggest problem is "The Chasm."

The Maloofs have emphatically stated that they won't do this if there's a seat surcharge.

The voters have stated even more emphatically that they won't finance an arena with a sales tax hike.

The resurrection of AKT's idea to rezone the eastern part of the County is extremely likely to trigger an election. Rezone elections in that part of the county have usually been rejected (here's that word again) emphatically.

The problem with the idea put forth last year, to rezone and sell Natomas land, with each landowner contributing a portion of those sales to build an arena, falls apart when some owners demand more, others don't want to sell, etc.

But maybe the biggest problem of all: Sacramento's reliance on a government economy, and the extraordinarily small number of large corporations headquartered in Sacramento, and problems with the local TV contract.

As I've said before, we have a large chasm, and no one around here has the skills to build a bridge across it.

Just for the record, I'd be extremely offended if we try to fund an arena without a public vote. On the day-to-day, $11 million Saca Towers subsidies, I'm fine with the idea of a representitive government deciding that. But for projects of close to $1 billion (and it turns out that between the arena, parking, overruns, bond interest and infrastructure, we were already close to that much with Q&R), that demands a public vote. The politicians know this. They understand this.

In order to get an arena done, the Maloofs MUST bend on the idea of surcharges. That's a requirement. If the Maloofs stand fast against that idea, you're back to a public vote, and supporters of Q&R still remember what 81-19 feels like.

I still think Q&R somewhat resemble an offer the Maloofs have already had. We've all heard by now that LV is working on its own $409 million arena project. I think they'll get that through. If I'm right about that, it could be the Maloofs are just waiting to see how things go.

The article on Saturday, in the Bee, about how Sacramento holds the upper-hand over other cities, made one really bad assumption: Voter approval. If the Maloofs have to pay for even 60% of the arena, Sacramento has already been outbid. We probably got an offer that is not quite as good as what someone else has offered, and turned it down (resoundingly). We just don't know this with 100% certainty yet.

I tell you, they're going to TRY between now and All Star Week, but if we don't have something DONE by then, it'll be adios. That's what this has come down to: Three more months.

I don't think we'll get it done.

It must include a surcharge; the Maloofs are dead-set against a surcharge; AKT's idea requires a vote that is sure to fail; the voters will reject sales tax hikes every time.

The Maloofs' stance on surcharges and the public's stance on sales tax hikes is the dealbreaker. You have to find a compromise right there.

kennadog · Nov 13, 2006

Sketcher: Sorry if I seemed negative. I have tried and tried to come up with a scenario. I still think the current site is the quickest, easiset and likely the least expensive way to go.

AS: It isn't a billion dollar project if it isn't built downtown. Whether anything gets built downtown is dependent on the city coming up with infrastructure money, regardless of whether an arena gets built there or not. You can't look at it as one project. Its two complete and separate projects. If the Kings leave, the city still has a half million dollar issue dowtown in the railyards (getting more expensive daily).

As to a ticket surcharge. If it increases the current surcharge, that is likely to be a problem. The Maloofs have pretty much raised ticket prices to what the market will bear at this point and they know it. No extra revenue likely is received, if you get more $ per ticket, but sell less tickets, because you've over-priced the market.

A public vote is only required for a tax increase. If some other way to finance an arena is found, then no ballot vote. That doesn't mean that citizenry can't let there feelings be known, just like on any other issue presented at public hearings with a public vote.

LPKingsFan · Nov 13, 2006

West Sac next to Raley Field?

VF21 · Nov 13, 2006

Sketcher said:

As a matter of fact, you are being overly sensitive.

People who discuss things on message boards ALWAYS shoot holes into posts. It's a way to continue the discussions. It's been referred to as "finding the fatal flaw."

If someone presents a proposal, it's certain to have flaws that will need to be addressed. Why wouldn't you want to address them?

We have a very intelligent, articulate group of posters here with a broad spectrum of knowledge about various aspects of the components of any kind of arena proposal that might come along.

When they point out something wrong with a proposal, they aren't making it personal. They aren't attacking the poster; they're trying to address potential problems with what has been brought up.

Please don't take it personally because I know most of these people and they certainly don't mean it to appear as though they're attacking you.

Peace.

Sketcher · Nov 13, 2006

VF21,

I don't take it personally and I understand that skepticism is necessary since our arena opponents will certainly try to poke holes in any proposal. My only desire is find a solution that has a minimum of shortcomings and is in fact doable. I agree with ArenaSkeptic that a surcharge is a necessary component of any deal. I think the access and traffic issue at Arcade Creek is solvable, especially given that there is already an RTD light rail line closeby.

Okay so here's another idea. How about getting a Hollywood production company to do a movie about the building of a new arena as a central element of the story? The movie company could contribute to the cost of the "set" and later the building would become a landmark attraction for movie goers who want to go see where the movie was made. I know it's a stretch here but I don't have a Plan C. Thanks all for your comments!

VF21 · Nov 13, 2006

Sketcher said:

I like that idea. It worked for "Field of Dreams"...

I like to see all the ideas, including the ones that are outside the box, so to speak. Who knows when one might just be the winning one everyone can't believe no one else had thought of before?

It's all good, Sketcher.

voteno · Nov 13, 2006

That is part of the problem

[
As to a ticket surcharge. If it increases the current surcharge, that is likely to be a problem. The Maloofs have pretty much raised ticket prices to what the market will bear at this point and they know it. No extra revenue likely is received, if you get more $ per ticket, but sell less tickets, because you've over-priced the market.
.[/quote]

The Maloofs are unwilling to contribute much to the building of an arena. A surcharge is one of the best ideas, that would help sway the public to authorizing an arena to be built with public funds. If there is any wiggle room at all in the price, the maloofs would want that for future price increases. If it goes to a public vote, things have to happen to show that the people who use the arena as well as the maloofs pay for a substantial part of the arena

jmtylr · Nov 13, 2006

Arena

I agree that the new arena should go on the city owned land next to Arco, and the city's contribution would be the donation of the land.

Does anyone know if the hotel and car rental taxes can by raised to help pay for the arena, by the city council, or county, or would it have to be by a public vote? That way, the residents should have no complaints about having to pay for the tax.

I was recently in Seattle and their hotel and are rental taxes are absured, compared to ours. Their car rental tax is 11% aprx, not to mention 11% airport access fee and a 12% airport facility fee.

I am a season ticket holder for the Kings, and yes, I would be willing to take a surcharge on my tickets to help pay off the arena.

Warhawk · Nov 13, 2006

jmtylr said:

I agree that the new arena should go on the city owned land next to Arco, and the city's contribution would be the donation of the land.

Does anyone know if the hotel and car rental taxes can by raised to help pay for the arena, by the city council, or county, or would it have to be by a public vote? That way, the residents should have no complaints about having to pay for the tax.

I was recently in Seattle and their hotel and are rental taxes are absured, compared to ours. Their car rental tax is 11% aprx, not to mention 11% airport access fee and a 12% airport facility fee.

I am a season ticket holder for the Kings, and yes, I would be willing to take a surcharge on my tickets to help pay off the arena.

Uh, our taxes on those items are, I believe from other posts here in the past, already at a similar level.

Warhawk · Nov 13, 2006

voteno said:

So exactly what part of "a ticket surcharge won't work" did you not understand?

You keep beating the same pointless drums over and over again....

VF21 · Nov 13, 2006

Warhawk - I think part of the dialogue from "War Games" ( http://www.imdb.com/title/tt0086567/quotes ) applies here.

Warhawk · Nov 13, 2006

VF21 said:

Yeah, I know.

I have a feeling this will be his next arguement in all this:

Sir Bedevere: ...and that, my liege, is how we know the Earth to be banana shaped.
King Arthur: This new learning amazes me, Sir Bedevere. Explain again how sheep's bladders may be employed to prevent earthquakes.

Lets hear some ideas

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