Friday, June 03, 2011

Paying for a new Arena?

I think we all know why the Kings are still in town… passionate fans and a last ditch effort by politicians and local businesses to show that Sacramento can still pull together big deals. Building a new arena is now priority #1, a big spending project that should be done for the greater good of Sacramento.

In the last issue of Sactown Magazine (April/May) there is one section called: “Riverfront: Veto the Vote” that talks about whether the Kings decide to stay or go, and that it's time to start treating the arena issue like every other major project the city has undertake for the good of the people. And that means not asking the people what's good for them.

This method that Sactown Mag., refers to is done by raising bonds with the backing of public money. The Sacramento bond project list is longer than you might think. Just to list a few, there’s the billion dollar airport expansion, $751 million “Capitol Improvement Program” in 1987, both the Hyatt and Sheraton, and the convention center expansion in 1992. None of these projects went to a vote of the people; the city did not wait around and hoping for some wealthy family or company to build for us allowing others to decide our fate for us. All these were done by raising bonds and backing it with public money. The bonds were paid off with funded user fees (where ticket buyer pay a few extra dollars each visit), hotel, car rental, parking, and concessions.

This has been a standard method for several other cities to build big project when private money was not enough to make it happen. Since an arena serves a public purpose, therefore it does not need voter approval.

If our city leaders are serious about keeping the Kings in town, they better look to the past to help finance a new arena in the near future. Take a moment to check out the article here, it illustrates the point much better than I have.


james said...

I'm hoping whatever funding mechanism the 'here we build' JPA (if it becomes a JPA) comes up with, that they are able to move forward without a public vote. Unfortunately the more I've looked into proposition 218 and last years proposition 26, I have no idea how that can happen unless they try to divert rental car and hotel fees without actually raising those taxes. There's just no way they can get a 2/3 majority to vote or any taxes including hotels and rental cars because people are convinced a new arena is not needed. I suspect hat theJPA will eventually consist of only Sacramento, West Sacramento and Sacramento County.

Doug said...

I don't agree that an arena is for the public good. Even though this study is over 10 years old (see link below), the facts have not changed. Professional sports arenas do not improve the local economy. Until someone shows me academic research with different findings, I'll stick with economic facts, not feel good developer fantasies.

Zwahlen Images said...

Doug, it’s more that just the Kings and tax dollars generated from their presents, it’s also all the other events that happen there 200 days out of the year. Power Balance Pavilion won’t stay open if there isn’t an anchor tenant (like the Kings) to help cover operation costs. It’s barley breaking even as it is, so the lose of the Kings means the Pavilion closes and all the events we have taken for granted like concerts and other performances will be seen either in Marysville in the summer or the bay area. Is that what we want this city reduced to, commuting to other cities to enjoy entertainment we have enjoyed here for over 25 year. That’s the big picture Doug; many big performers don’t even stop here any more because the Pavilion is out dated, that’s a negative on the local economy

Doug said...

I guess we'll have to agree to disagree on this one.

Thanks for writing this blog. It's great to see what is planned and being built in Sac.