Wednesday, April 28, 2010

Arena Negotiations Begin

On Tuesday the City Council unanimously agreed to a four-month exclusive negotiating agreement with developers Gerry Kamilos and David Taylor and their team, known as Sacramento Convergence LLC.

During the 120 days, the developers must provide the city with a detailed financing plan and a conceptual plan for the sports and entertainment complex proposed for the downtown railyards. From those details, the city can evaluate the proposal’s financial feasibility.

As agreed, the Kamilos team has 10 days to submit to the city agreements with the National Basketball Association, the owners of the Sacramento Kings and Cal Expo. The developers have 30 days to turn in their detailed Convergence proposal, and 60 days to submit plans for the sports and entertainment complex.

The Kamilos group also must pay the city $170,000 for expenses during the four months. The money will pay for a full-time city project manager with expertise in developing sports complexes, at least one financial adviser, and an outside attorney to help craft a pre-development agreement.

The proposal has the backing of the NBA and Maloof Sports & Entertainment, which owns the Kings and Arco Arena.

I for one think this Convergence plans a joke and won’t happen because of two reasons. One, the state legislators would have to agree to sell Cal Expo for the purpose of building Sacramento a new arena ($450 million) and pay off the debt owed to the City ($69 million) and I just don’t see the lawmakers going for that. Two, according to the Sac Bee story on April 28th, Kamilos' development team would give the state $2 million to spend on planning the move from Cal Expo to Arco Arena with the assumption that the State will pay to build new fairgrounds. If Cal Expo sold for $1.5 million per acre that would net $525 million which would cover both the Arena and what’s owed to the city leaving $6 million for new fairgrounds at Arco. That’s not nearly enough to do the job if they were lucky enough to sell the land at that high a price tag, so who else to pay for the new fairgrounds other than the tax payers of California during the biggest budget deficits in the States history. I don’t think the City Council had their heads on straight when they approved to move forward the Kamilo’s team… Kamilo didn’t even provide a rendering of the proposed arena which was a something the six other development groups did do.

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