Thursday, August 03, 2006

Sacramento Civil War: The Arena Debate

I have stayed away from this topic since there was nothing ever finalized. Finally after 6 years the debate has come to the forefront.

Bottom line for me: We need this arena.

I hear so many arguments against this and many times they are very shortsighted and only make this out to be about the Kings and the Maloofs. Those people are wrong.

We hear a lot about how it will energize downtown, yeah that may be the case for the Railyards, but downtown is already on it's way. This is truly about quality of life here in Sacramento and how to make it even better.

*People argue that entertainment dollars simply shift from one location to another locally.
While that may be the case in other cities, that is not the case here in Sacramento. Other cities, such as SF, have multiple facilities that can hold large events. If they lose one, the event will most likely go to another venue.

Think about it, here in Sacramento, we have Arco Arena and that is it for major concerts. Sorry, but I don't see Bocelli or U2 performing at the Memorial. Anyone in Sacramento that wants to see those performances will now have to travel to the Bay Area for shows...thus taking all their entertainment dollars with them. Of those 17,317 people that go to events at Arco, how many of them do you think go out to dinner or drinks before hand? 1/4? 1/3? Whatever the amount is, that money that people spend at events will be leaving Sacramento.

Say what you want, but if the Maloofs leave, Arco is gone and we are stuck without a major venue for shows. We can look forward to spend $3-$4 a gallon and two hours each way to drive to the Bay Area. I think we can tell which way those dollars are heading

*I can't afford to go to Kings game.
It makes me laugh when I hear people talk about how they can't go to Kings game because it's too expensive. Yes, there are really some people who can't afford to go to a Kings game, but a majority of those people who say that are wrong.

You can go to a game and pay a whopping $10 per ticket, add a couple bucks for ticketmaster charge and that's $12 a ticket.

Oh but the parking and the food!!!
Don't want to pay the high prices for bad food..guess what? Try eating at home before the game. Don't want to pay $8 for a beer? Kill a 6 pack in the parking lot before the game.
Don't want to pay $10 for parking? Park at the Safeway or Raley's and walk 15 mins.

You can go to a Kings game for about the same price as going to a movie or 2 daily Starbuck runs. There are cheap ways to go to a game. You don't have to sit front court with 3 beers and 2 hot dogs to be at the game and enjoy yourself

*I don't want my tax dollars going for something I don't use.
That argument holds no water. My taxes go toward quite a few things that I don't use or think I should have to pay for. Since when did we get to check off on our tax returns what we want our taxes to go toward?

The classic example is I don't have kids yet, why should I have my taxes go toward schools I may never even use them. When I have kids I may send them to private school..why should I pay taxes?

Why? Because it's for the betterment of the city, that is why. Just like the arena will be.

*There are other needs.
There will always be other needs. There will always been homeless, poor people, pot holes and other things. Other cites have them and will always have them, we have them and will always have them. The difference is those cities also realize it's not a choice of one or the other. With this tax that equates to $0.25 cents per $100 on TAXABLE goods we can start to take care of those things.

*Value of the Arena
We hear all about this being an "investment" in Sacramento. When you invest in something you want to see what the return on investment is. The problem is the only thing I heard people talk about is the monetary return.

I REALLY REALLY wish people would think of the non-monetary value ("value" is such a subjective word)

For me, there is nothing like a watching a game at neighborhood bar or restaurant where everyone in the place is there for one root for our home team.

I can be sitting next to a ditch digger, a lawyer, a doctor, a teacher, an executive manager but for those two hours all socioeconomic go out the door and everyone is there for the one common watch the Kings kick the crap out of the Lakers. (I hate you Horry!!)

There are very few things in this city that can do that.

There is "value" in that. The value of civic pride. The value of seeing the Wells Fargo Building lite up in purple as the Kings and Monarchs make their playoffs runs, the value of civic camaraderie.

I heard someone at the County Supervisions meetings say something that totally stuck with me.

"I don't want to have to drive to the Bay Area to create my memories. I want them in my home city"

-The memories of taking your children or grandchildren to see the Wiggles with a big smile on their face.

-The memories of taking your daughter to the latest boy band concert with the smile and satisfaction of knowing how much that meant to her.

- The memories of how excited you felt during game 5 of the conference finals when Mike Bibby hit that game winning shot in game while Chris Webber layed out Derek Fisher.

- The memories of how painful it was when Robert Horry hit that game winning 3 pointer at the buzzer of game 4.

-The memories of taking your son or daughter in person or on TV to his first Kings or Monarchs game with jersey that sports the name "Sacramento" on the front. (I have them in storage already for my first son)

-The memories of seeing some of the most entertaining, famous and talented performers and musical acts in the world. Bocelli, U2, Yanni, Elton John, Mariah Carey, Johan Strauss Orchestra, Champions on Ice, Ringling Brothers, ..the list go on and on!

Talk about "value". I want those values HERE in MY home city, Sacramento


I hope people realize that there will be many many other things Sacramento will be able to do with this money than just the arena. There will be an additional 600-700 MILLION dollars that Sacramento can invest in itself. More parks, more police, more fire stations, more libraries, helping the homeless, maybe a new museum or performing arts center.

Where will this money come from if we don't appove this?

There is something in this ballot measure for everyone. Let's not get blinded by the short sightedness of people that only want to make this about the Kings and Maloofs. This is about MUCH MUCH more than just basketball.

If it were just the Kings I would say, yeah it sucks but we will be fine. But when looking at the big picture, we need this new facility.

I urge people to vote YES on both measures in November.


Anonymous said...

You go man!!! Your points are STRONG and VALID!!! Vote YES! Its not for the Maloofs, its for the city. that should be the motto.

Zwahlen Images said...

You have explained the big picture very well... this new arena will give back to the community in more ways than most people even care to realize. It's time to get serious and say it like it really is... good job my friend.

SacUrbnPlnr said...

You provided a very good overview of the issues. However, it would have been better if our elected officials approached the arena discussion from issue of long-term PUBLIC benefit, not specifically to keep the private owners of the Kings in Sacramento. A large event venue, such as an arena, is definitely a public benefit and necessity for a City the size of Sacramento.

However, our public leaders seem to be obsessed with the notion that the primary need for an arena is to benefit the Sacramento Kings. Whether or not the Kings stay in Sacramento, we will need a new arena for large events, and the public might be more willing to support the cost if the discussion were focused on the overall need and public benefit rather than the need to house the Kings in an updated sports facility.

In fact, it might be a better financial deal for the City and County if we had a new arena for large events WITHOUT the Kings under the current deal as reported to the public, because the public would receive 100 percent of the revenues from the operation of the arena.

LivingInUrbanSac said...

Thanks for check out the site, SacUrbnPlnr.

I totally agree, the discussion needs to be around the public benefit to Sacramento and not make it about the Kings, and I think officials do a decent good job of attempting to do that.

The problems start when people that are against the venue bring in the Kings and only the Kings into their argument. They yell so loud people who do not step back and look at the big picture get trapped into thinking it's only about the Kings. It's tough to focus on the public benefit when the opposition keeps hammering on the private owned Kings part of the venue, while the Kings are a part of it, they are far from the only part.

It's also tough to get people to think this way when the media is always referring to it as the Kings arena.

I hear you about the arena without the Kings. I have thought about that as well. But I do feel there is a economic value to the city having a pro team there. I don't know what that number is, but I'm sure there has to be one.

Plus, do you think the county would be able to book enough events to be profitable? Not having the NBA and WNBA leaves those 60 dates free.

From my understanding the Maloofs Sports and Entertainment cash flow isn't very strong. They make a majority of their money on the increase of value from the team. Without a anchor tenant like the Kings and Monarchs, could the city actually make money by running it themselves while having to pay for the operations, maintenance and debt service of the arena?

That would be an interesting study to see.

SacUrbnPlnr said...

Dear LivinginUrbanSac:

All good points. At a minimum, perhaps our public officials can convince voters to suppor the 1/4 cent sales tax increase even if they decide to vote against the companion advisory measure to use a portion of the money for a new arena. This outcome would keep all options on the table for funding a new large event venue.

foxmtbr said...

The Bee did a great job today showing how much this benefits the city financially. Hopefully many people will read it and change their minds. Also, great site sugit.

LivingInUrbanSac said...

Thanks foxmtbr!

Anonymous said...

Am I the Only Cowtown Hick Lookin’ At Measure Q &R?
Gawllee. Am I the only cowtown hick in Sacramento? Astute city and business leaders tell me that only a cowtown hick will prevent Sacramento from entering the new millennium and vote no on Mearsure Q and R. Well, dawg nabit! My hickness all started with this problem I have… When it comes to urban planning I look at everything, even “quality of life,” in terms of cost/benefit metrics. So when I first heard about Sacramento’s proposed arena, I evaluated it just like I would any other civic opportunity.

The way civic opportunities work is that you have X amount of dollars to spend, and you try to spend X in a way that brings in the most value, i.e. the best return, with “quality of life” being measure in consumer/citizen satisfaction. So I asked myself, is $540 million best invested in an arena, or something else?
I began my analysis by searching the web for two things:
1) Sacramento economic development information
2) Information about the economics of sports arenas
I quickly determined that I must be the only person in Sacramento with internet access because what I found in just a few minutes convinced me that Sacramento is making decisions that will sustain our mediocre economic performance, not catapult us into the future of a competitive knowledge economy. Wat? Ya woodin’ beez callin’ mah a fibber, wood ya? Well here is a short sample of what I found.
First, there is Joel Kotkin’s, Irvine Senior Fellow and New America Foundation scholar, Sacramento's Growth Dilemma report that states:

Sacramento rests on the edge of what could prove a difficult decade, which could either make or break its momentum toward becoming one of the regional winners in the new century.

The Sacramento region experienced virtually flat economic growth. Not only did government jobs drop, but even larger losses were registered in the region's still fledgling information sector. Manufacturing and financial service sectors also declined.

The prime cause for this depressing pattern, according to economic development experts and entrepreneurs, lies with California's inability to reform adequately its high tax and oppressive regulatory regime. This has shifted job growth in high-end sectors - including offshoots of Silicon Valley - to places like Boise, Reno and Las Vegas.

This region's basic appeal lies in its basic assets such as a prime location on key east-west and north-south transport lines, still reasonable housing prices and a good environment for raising children.
Mr. Kotkin may be correct. Everyone tells me that sooner or later Sacramento will take off because it is a "great place to live," which is exactly what the people in hundreds of cities across the country also claim. So is the arena really going to jettison our “quality of life?” It doesn’t do a thing to change our key east-west and north-south transport lines, encourage favorable housing prices, or help improve the environment for typical Sacramento children.
Secondly, there are massive amounts of evidence that sports arenas either have a net negative impact, or a positive impact that is so insignificant it was not worth the money poured into it. For example…
One guy who must be livin’ in Hicksville is sports economist Brad Humphreys, a professor of recreation, sport and tourism at the University of Illinois at Urbana-Champaign.
The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area, Humphreys and Coates noted in the report. The researchers found other patterns consistent with the presence of pro sports teams. Among them:
• a statistically significant negative impact on the retail and services sectors of the local economy, including an average net loss of 1,924 jobs;

• an increase in wages in the hotels and other lodgings sector (about $10 per worker year), but a reduction in wages in bars and restaurants (about $162 per worker per year).
In another bit of research, Dennis Coates and Brad Humphreys analyze the economics of arenas and conclude that:
The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.
Patrick Crouch reaches a slightly better conclusion analyzing Memphis, but it still doesn’t sound very positive.
After examining both the costs and benefits of sports arenas, it may well be the case that the benefits outweigh the cost. However, the degree to which this is true is unknown due
to externalities. It should be noted that the actual benefit of sports arenas typically is far less than the benefit estimated in promotional studies.
N eff dat ain’t nuf fer ya… Well, there’s a new arena in Dallas, but in order to encourage economic development, the local government is offering tax incentives to businesses to move nearby. I guess it hasn’t attracted the mass influx of companies that was expected.
A review of sports and economic development literature tells us that:
The minimal economic effects of a new stadium or arena on a city have been written about by many authors. Economic studies of these effects by many authors show only a small positive or negative impact on a city’s economy, if any. Critics of economic development strategies which focus on sports often point out that many other alternatives might yield a better return on investment than that of sports.
In other parts of Texas, recent reports from the San Antonio Express-News noted:
The SBC Center, which opened next door to the coliseum three years ago as the home of the Spurs, has yet to bring the much-talked-about economic revitalization to the East Side
neighborhoods surrounding it.
Even the series of articles from our own Sacramento Bee and the intense debates at City Hall discussed the lack of economic benefit of an arena.
From Daniel Weintraub, Sacramento Bee Columnist:

“Sacramento County voters who are serious about evaluating the proposal to build a new arena for the owners of the NBA Kings will soon discover what every credible study on the subject has concluded: new arenas add little or nothing to the economies of the regions in which they are built.
Most of the money patrons spend is unloaded inside the arena. It goes to the owners of the teams and the players they put on the court, and then is promptly transferred out of the area.”
From Dave Jones, State Assemblyman and former Sacramento city councilman
“Other needs will go unmet, beginning with flood control. Although the state is poised to pour billions of tax dollars into shoring up Central Valley levees, the region will have to raise taxes within the next few years to pay its share.
How in the world are we going to go back to the voters and convince them to assess themselves for flood control if they've just been told that this sales tax increase is going to solve all their problems and provide money to address all these public needs?”
A number of years ago Harvard did a study of the impact arenas have on local communities, Jimmy Yee cited it when he was on the City Council. It stated that never, nowhere, has any arena ever paid off to the promises of the team owners and backers. But some civic and business leaders obviously still believe an arena will spark more economic activity or they would not be so passionate in their support.
So, an arena is not guaranteed to provide a big stimulus to the overall Sacramento economy or “quality of life,” but should rather be seen as one more complementary amenity. It is certainly possible that Sacramento would support nearly the same amount of future retail and entertainment spending without an arena, perhaps in different forms and in different geographic parts of the region.
Not exactly and overwhelming vote of confidence in the arena project, is it? So why are we pursuing this? For starters, it’s the astute civic and business leaders of the government dole that are behind it. They apparently think the MCI Center in D.C. revitalized that town, although urban scholars don’t think the arena had that much to do with it.
The Bluegrass Institute doesn’t agree with our city leaders.
A report by the St. Louis Federal Reserve reveals that 55 arenas were built or refurbished between 1987 and 1999 in the United States at a cost of more than $8.7 billion, of which nearly $5 billion was paid by hard-working taxpayers in the form of government subsidies. The Fed’s report also suggests such public-arena investments come at the expense of higher priorities – including schools, infrastructure and lower taxes – that produce solid returns to a larger segment of society.
So, revitalization is the new snake oil mantra cast in the “show me the arena” spell. This pick pocket trickery seems to work every time. For example, a popular view is that Cleveland is on a comeback because of the half-billion dollar investment that, among other things, bought the city a baseball stadium and an indoor arena. But for many familiar with Cleveland's situation, the hype hasn't been met.
When this was on the ballot in '90," said W. Dennis Keating, professor of law and urban studies at Cleveland State University, "the promises and advertising were inflated.”
Among the promises: an increase in employment with 28,000 permanent jobs, housing for the homeless and $15 million annually for city schools. So far, Cleveland hasn't seen those projections ring true, which bolsters what many economists have been saying for years -- sports stadiums do not bring the economic benefits that supporters trumpet.
Keating says the issue has become controversial with one side arguing there has been little economic impact, but in fact it’s only a shell game, a shifting of dollars.
And some city leaders think the Sacramento’s Arena Measure Q and R are flat out dishonest, and State Assemblyman Dave Jones and Supervisor Roberta MacGlashan actually came out heavily against the legality of the arena measure.
Despite all this, the question stays in my head… why does just about every civic and business leader on the government dole seem to support this arena? And not only that, why do they believe it will revitalize downtown? Maybe I am an imbecile cowtown hick and can’t follow the logic of arena=economic growth, or even more absurdly, arena=better quality of life. Surely if our leaders were more of an imbecile cowtown hick, they would spend some time investigating a $540 million expenditure, right? Apparently not.
The explanation may come from another cowtown hick, Phil Porter, director of the Center for Economic Policy Analysis at the University of South Florida. He says a sports arena financed by taxpayers can hurt a region's economy along with its “quality of life.” But he goes a step further, enlightening us on the fixation of new arena measures by Sacramento’s civic and business leaders on the dole and the disregard for the lost of Sacramento’s venerable establishments such as the Tex Mex Restaurant and Joe Sun’s …
In a metropolitan area of more than 2 million people such as Pittsburgh's, few pay attention to the comings and goings of neighborhood groceries. Politicians, though, are attuned to the possibility of losing a professional sports franchise and the negative fallout that would come with it.
"Nobody wants to be the mayor that lost the hockey team," Porter said.
"But the question we ought to be asking is, 'How much taxation is any team worth to your quality of life?' If people didn't have a hockey game to go to, they would still find their diversions, whether it's fishing on the Allegheny River or going to a movie."
I think this all should ring a bell in cowtown. Sacramentan’s may find courage deep down inside them to see through the self interest of civic and business leaders on the government dole and say, “Moo!” to the arena. We could follow in the footsteps of Virginia.
Virginians’ skeptical attitude toward the economic benefits of costly infrastructure projects whose use is limited to seasonal adult entertainment is unusual. Despite the occasional seduction of state officials, they successfully resisted efforts by the Walt Disney Corporation, the Washington Redskins football team, and a group of investors who want a baseball team to entice them to agree to build costly accommodations for their entertainment businesses.

To date, the state remains free of subsidized major league sports facilities. The rejected suitors accused Virginians of a selfish "NIMBY" (Not In My Back Yard) attitude toward development, yet Virginia is awash in the new construction of factories, office buildings,
shopping centers, campus buildings, golf courses, privately financed conference centers, and other major projects that promise high-paying, year-round, full-time jobs. The offer to create part-time, low wage, vendor-type jobs typical of subsidized entertainment complexes simply is not attractive to citizens of Virginia.
Bottom line is… Gov. Schwarzenegger recently stated that its primary focus of the coming year for Sacramento would be levee repair. It is widely believed that the Sacramento area has the worst flood risk in the country. If so, maybe local politicians will pull a few hundred million away from the arena to put towards the real issue of levee repair. That would surely increase our quality of life. Even a cowtown hick knows New Orleans’s quality of life was better before the levees broke than after?
No matter how much fancy multimillion dollar big city make-up the Yes on Measure Q and R campaigners put on this pig, it’s still a pig. Our astute civic and business leaders of the government dole have to be careful, if a weak levee washes this arena deal down the drain, the public will no longer fall for ego-driven arena projects supported by weak urban cost/benefit analysis. That may mean the next ridiculous Downtown Revitalization Project will have to be (gasp) privately funded.
And if a sellout crowd of 17,317 of the most devoted fans of basketball at Arco Arena for every game since it opened in 1988 isn’t enough for the Maloofs, then all their sincerity about how committed they are to this community is just another snake oil mantra in the pick pocket trickery of the “show me the arena” spell.
Guesin’ dis cowtown hick isa jest plain ignert. ‘Cept it kinda lika I sez at da beginning,’ idinit? It all boils down to business and cost/benefit metrics anyway and citizens can only bear so much new taxes. Nothing personal. But it wasn’t that long ago in Sacramento when pick pockets, snake oil grifters, and thieves were flogged and thrown out of town.

LivingInUrbanSac said...

Thanks for checking in Anonymous. Sorry for not getting back to you earlier, but I didn't read it over the holiday weekend. I have to be honest, it was hard for me to read the entire argument. It went off on a few tangents from time to time that lost me. I'll comment on a couple of the items you mentioned with regard to the new arena

Regarding the economic studies, I'm sorry, I just don't buy into them completely. It's impossible to take a subject such as this apply it to one scenario and extrapolate it out to everyone and everything. There are items that do hold true, but economists have a very narrow mind of value and how things are measured and tend to view everything in a vacuum. They don't take into account items that are subjective and can't have a real dollar figure places on them. As I mentioned in my post, there are many non monetary values to me that economists don't consider. It's not 100% about money to me.

"So is the arena really going to jettison our “quality of life?”
No, it's won't completely. But in my opinion, it does hurt it. Sacramento is a much better place to live with an entertainment venue like this new arena. There is no single thing that makes a city great, there are many, and this is one of them. Passing this for what comes out to be a very nominal amount of real money per person will have a much higher return of value in quality of life in my mind and and how I like to to live my life and will also also money to be spent on other needs that were mentioned above. Everyone gets a little something out of this tax.

"So I asked myself, is $540 million best invested in an arena, or something else?"
Very fair question. This is call "Opportunity Cost" (I actually do have a degree in Economics) I have thought about this as well. There are many things that Sacramento needs to spend money on, levees (which from what I understand, critical repairs are already underway), police, pot holes, the usually gambit of things. Other cites have them and will always have them, we have them and will always have them. The difference is those cities also realize arts, culture, and entertainment also fall into category as well and are worth investing in.

While Sacramento is in the middle of the political spectrum, it has always been very fiscally conservative, that is why we don't have a lot of the civic amenities other cities have. One rundown major museum, one rundown Broadway style theater, limited public transit, an undeveloped waterfront, no concert hall, a small zoo, no aquarium, no botanical gardens, an amphitheater is the middle of nowhere that takes a 45 min drive to get to. I want these things in Sacramento and I don't apologize for it and am willing to pay for it.

It's not about one of the other for me, it's about doing it all. This money starts to fund these. Time for Sacramento have these things and stop selling itself short, that is why I will be voting Yes.

Dumpfargo said...

Guess you kinda misguessed this one... Viva Las Vegas, baby! You are a sucker for the backroom schemeing of the likes of Dickenson and Fargo...