Reality hit the ThinkBIG supporters yesterday after city staffers published a report that discussed the selling of publicly owned parking spaces and garages for the next 50 years for upfront construction cash. The report did not look good concerning three issues, privatizing parking will force visitors to spend more money to park their cars downtown, there will be $9 million dollar hole in the city’s general fund every year with no plan to replace it, and the original value that was earlier used for leasing away the parking rights was overstated.
The report also pointed out that the leasing of on-street parking rights to build a new arena is not even legal according to current law and that the city has to pay off $52 million of bond debt before control could be handed over to any private parking company. Apparently, city officials are looking at ways to twist the law so that the leasing of on-street parking could be used to pay off this debt and opening the city up to lawsuits.
To top it off, the estimated cost of building the arena was increased by another $19 million over the past few weeks from $387 million to $406 million so that a VIP parking garage can be constructed on site. This number does not include the costs to build the necessary infrastructure around the site needed to support an arena, such as new water mains, improved roadways, and electrical capacity upgrades.
March is coming fast, I wish Ronald Burkle were an option.
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7 comments:
I know a lot of people really want this to happen, but this is really starting to look desperate.
We could just ask the millionaire owners of the Kings to pay for a stadium that they will make money off of for many years to come. Why is that a crazy idea? The Giants did it and it worked out great.
cm25, the Giants owners had deep pockets and the Maloof's don't. They currently owe the NBA $75 million and the City of Sacramento $77 million. The Maloof's own just 2% of the Palms, Sold the Beer Distributor and have seen their massive "on paper wealth" quickly disappeared in the downturn. Building a new arena is more than pro basketball. Currently, many big time shows and events no longer stop in Sacramento because the Arena is outdated and can’t support their needs. If the Kings leave, the Arena will close within a year or two because it won’t generate enough money from events to break even and pay the costs to keep it open. If that happens, you will be driving to the bay area to see most of the shows and acts that we have come enjoy at the old Arena.
ZI,
But doesn't that make my point for me? Why are we building a stadium with public funds for a group of owners that are already in debt to the tune of $152 million? Paying upwards of $400 million dollars for a stadium just so a few acts will play in Sacramento each year is a tremendous waste of money (not that I even buy the whole, the arena is too old argument, it opened in 1988, it's just not that old). The primary beneficiary of a stadium is a private business, I'm just not interested in spending public funds to enrich a private business.
Yeah, why would Sacramento need more private business or a destination that hosts nearly 200 events and accommodating approximately 2 million visitors annually? A place that employees as many as 1,200 full and part-time workers during the basketball season alone. If the city can make this work so that they break even or come out ahead after 20 years I’m all for it, if not, they need to look at what other cities have done before that made this work for them. From the get-go it was mentioned that the city needed to offer Bonds to finance an Arena, this was done with the airport, but for some reason the city choose to go another route that did not have a proven track record. Bonds have paid for several big projects in Sacramento over the last 25 years and this could have been one of them.
I'm not against building an arena, I am simply against using taxpayer money to fund a private business. If we replace the word stadium with Wal-Mart it makes it more clear. Wal-Mart creates jobs, brings in consumers, generates sales tax revenue, yet you don't see the Waltons at the city council meeting asking for a handout to help build a new Wal-Mart store (yes, I know Wal-Marts are often subsidized but that is only because people in city governments are suckers, not because Wal-Mart truly needs the subsidy).
This is a good article and I will highlight the most relevant part:
"A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus."
http://www.brookings.edu/articles/1997/summer_taxes_noll.aspx
Where did you hear that Arco would close in a year if they didn't have a tenant? This is the first I've heard of it--although arena proponents seem quite convinced that a new arena would still be profitable even *without* the Kings (using Sprint Center in KC as an example). And exactly what big-time shows have passed by Arco?
cm25: Actually, you may not hear about Wal-Marts publicly asking for subsidies, because they typically ask for largesse from their host cities in private. Arena profiteers are just more brazen about it.
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