Viewpoints: If Sacramento provides the arena buck, it should get more bang

[Mike0476]

Council Member Kevin McCarty has 4 issues on arena deal.

http://www.sacbee.com/2012/03/18/4344833/if-the-city-provides-the-buck.html

 

[The Hammer]

Whatever McCarty.

This guy just has "insincere tool" written all over him. Can't stand him. And not just because he's against the arena.

D. Fong was saying a lot of the similar things, but I respect him, because he's sincere.

McCarty just seems like an idiot.

 

[JB_kings]

He is just trying to do damage control to his political career. If he really cared about those points he would have participated more in the process. He chose the losing side and this is a last ditch effort to make himself look better.

 

[pshn80]

I haven't read his concerns. Does anyone here think there is any merit to them?

 

[The Hammer]

I haven't read his concerns. Does anyone here think there is any merit to them?

Not the way he's stating them.

He acts like those negotiating the deal aren't taking his "concerns" into the mix.

As if the city isn't negotiating this to make money. By doing that, he's insulting the people who are leading this deal. He's implying that they're either incredibly stupid, or that they're somehow how personally benefiting... that they're not doing their job as city leaders.

DUH we'd like to negotiate it to make money! The money he's not factoring into the system are 1) the immediate increase in property taxes that developing that land will create (and b.s. that the railyards would be "developed anyway"), and two that killing this deal means the Kings leave.

My question is where were you during this entire last year of negotiating? If you were so concerned about these things why weren't you in NY fighting for them at the table??

He provides no backstory on why he personally was not able to get these concerns met over the course of the entire year of dealmaking and negotiating.

He basically implies that the leaders were not negotiating in good faith, yet he totally fails to provide any reasons why he personally was not more involved in the process to ensure that they were negotiating in good faith or why they didn't get a "better deal for Sacramento".

Him coming in at this stage of the game and saying these things, and voting to kill the deal is basically a vote to have the Kings leave town. He makes no mention of that either. That not having a deal by this point means that the Kings leave, which would drastically reduce the amount of money for public freaking pools.

This makes him a total idiot in my opinion.

 

[The Hammer]

He is just trying to do damage control to his political career. If he really cared about those points he would have participated more in the process. He chose the losing side and this is a last ditch effort to make himself look better.

Eeeeeeexxxxactly.

This article smacks of personal desperation.

 

[pdxKingsFan]

How does he come up with this figure?

the city is investing $256 million and netting only $1 million annually

 

[The Hammer]

How does he come up with this figure?

By completely skewing and misrepresenting the facts in an effort to save his political career.

The million is an estimate off of ticket surcharge revenues only I believe (after 9 mil backfill accounted for).

For one, he neglects to mention that a huge chunk of the 256 mil is value that is created BY THE DEAL ITSELF. Which is just horribly misleading.

Second, he makes it sound as if they are investing cash. They are not, they are selling land that is currently not being used, and then the parking lease.

If he can come up with a better use of the land that is currently not being used, I'm all ears.

Also, and this cannot be overstated, a failure to act, and act right now, means a LOSS of tax base revenue. That is not factored into his reasoning at all.

And conversely, he fails to even speculate about the increase in tax base revenue that this whole thing will likely create by stimulating growth and development downtown, not even in the railyard boundaries. Talking condos and other commercial development right around the site, for which there has been much interest already. There's the increase in property value that will create more tax revenue, and there is also the increase in sales tax, hotel tax, etc that all these events will create. And no, it is not simply "moving business from Natomas to downtown". Please. One, old Arco is about to collapse. And two, they will get a **** ton more acts and conventions and NCAA stuff. All that means a crapton more TAX revenue for the city. Nowhere does he mention this.

And that $1 mil is the most conservative possible number from the metric he's using, not to mention how incomplete it is.

He just makes a terrible argument filled with so many holes. Any high school debate team would take him to the cleaners. What a joke. His argument is so bad that it's impossible to be taken seriously. D. Fong on the other hand, I do believe will be actually genuinely trying to poke holes in the deal and trying to make it better.

 

[Brac-o-matic]

I think it's funny that, among other things, he and the CAVE types constantly bring up the fact that they oppose the arena plan because it isn't fair to police.

If it really is damaging to them, then why are the Sacramento police SUPPORTING the arena plan..? Just a question...

 

[The Hammer]

And yes, I'm aware that I've been repeating myself in my replies. This is because I get a lil bit worked up by idiotic logic. I'm working on it.

 

[kennadog]

I think it's funny that, among other things, he and the CAVE types constantly bring up the fact that they oppose the arena plan because it isn't fair to police.

If it really is damaging to them, then why are the Sacramento police SUPPORTING the arena plan..? Just a question...

All McCarty wrote about is (pools, plice, etc.) are operating expenses. If Sacramento folloed that model, we'd have the Chicago mess on out hands. This is one time shot at this money.

Chicago got $1 billion dollars. These used it to avoid cutting the city budget, plugged the gaps. The money was completely gone in two years with nothing to show for it and still having to cut the city budget. All they did was postpone the inevitable. The proper way to apy for the things he writes about is one thing: more annual revenue to the general fund. That means a continuous stream of reveue.....say the kind to be raised from property taxes and sales taxes. The arena itself and the railyards development should provide both streams of revenue nicely. Plus working at the arena on events night puts more money into the pockets of policemen.

McCarty is disengenous and misleading in his remarks.I respect D. Fong much more, because he has serious specific concerns, but isn't closed-minded. He may vote no in the end, but at least he's open to having his mind changed.

McCarty doesn't take into account the likelyhood of more convention money spent at Sacramento hotels, restaurants, shops, etc. How about more big name events, that draw people from all over the region to spend money in Sacramento. Howe about an NCAA tournament again? How about the possibility of Olympic events in a new Sacramento Arena.

He does had some of the same concerns as D. Fong and some are legitimate concerns. Hoever, a term sheet is non-binding on any of the parties and only outlines the plan. Now is when they get down to the details.

 

[JB_kings]

As I was walking through the Arco parking lot the other night on my way into the arena, I saw countless cars with license plates from Nevada and Oregon. It's not just big events that draw from outside the region. It's sometimes as simple as Kings vs. Celtics.

 

[pdxKingsFan]

By completely skewing and misrepresenting the facts in an effort to save his political career.

I know all that I just wondered where he came up with that stupid number. Obviously the arena creates thousands of jobs, has taxes, etc. that will benefit the city beyond 1 million.

The million is an estimate off of ticket surcharge revenues only I believe (after 9 mil backfill accounted for).

That would make sense.

I thought the city was getting a cut of the operations take too, that would increase as time went on, which would certainly be well over 1 million annually. Am I confusing it with another deal?

 

[The Hammer]

I know all that I just wondered where he came up with that stupid number. Obviously the arena creates thousands of jobs, has taxes, etc. that will benefit the city beyond 1 million.


That would make sense.

I thought the city was getting a cut of the operations take too, that would increase as time went on, which would certainly be well over 1 million annually. Am I confusing it with another deal?

Yes, I'm sure you know that as wells as most others on this board, just had to state the obvious I guess.

And b) Yes, city is getting a cut of operations revenue, even from non Kings events, in addition to the fixed ticket $1 per surcharge (designated for repairs/upkeep) and the fixed % surcharge (5% I think).

The revenue sharing deal (on all non Kings events only, I think) is something like 10% of first 10 mil, 20% of next 5 mil, and 50% of everything on top of that.

I don't think he's accounting for that in any of his "$ 1 mil is all the city will make on their $256 mil investment" line. I think he's only using the surcharge %'s. I could be wrong.

 

[Section 101]

Yes, I'm sure you know that as wells as most others on this board, just had to state the obvious I guess.

And b) Yes, city is getting a cut of operations revenue, even from non Kings events, in addition to the fixed ticket $1 per surcharge (designated for repairs/upkeep) and the fixed % surcharge (5% I think).

The revenue sharing deal (on all non Kings events only, I think) is something like 10% of first 10 mil, 20% of next 5 mil, and 50% of everything on top of that.

I don't think he's accounting for that in any of his "$ 1 mil is all the city will make on their $256 mil investment" line. I think he's only using the surcharge %'s. I could be wrong.

If the city wants to make more money they need to help bring more top dollar events to the arena. They get a share of the profits:

15 percent of the first $10 million
30 percent of next $5 million
50 percent of any subsequent profits

 

[The Hammer]

If the city wants to make more money they need to help bring more top dollar events to the arena. They get a share of the profits:

15 percent of the first $10 million
30 percent of next $5 million
50 percent of any subsequent profits

Ok cool, well there you go.

I agree, that's one good way for the city to make some money.

Thing is Sac is already a prime spot to have a big name venue. It can intercept people everywhere east of it, within about 2 hours south, and 2-4 hours north. It's easier for that whole population area to go to Sac rather than Oracle, the next big name act.

How McCarty can't see this is beyond me.

They'll Stockton business, Modesto business, Tahoe business, Nevada City, Chico...

All those folks spend their concert money in Oakland. A large part will now be spent in Sac.

Good thing is that AEG will be doing all the work to book those big names, they already manage tens of seriously top notch venues around the world, so they'll just route their rolodex through Sac. If people haven't, I would recommend a quick dip into thier website. It shows what venues they own/manage/book etc. It's pretty impressive. They seem to be the best in the business. http://aegworldwide.com/

 

[pdxKingsFan]

The revenue sharing deal (on all non Kings events only, I think) is something like 10% of first 10 mil, 20% of next 5 mil, and 50% of everything on top of that.

Ok yeah, that sounds like what I recalled which is why I was shocked at these lowball numbers. I've seen the operations numbers at an arena on game night. City will do just fine.