As more details emerge about a proposed Sacramento arena plan, it appear the city may ask more of the NBA’s Kings and take some facility revenue streams. Is this realistic?
Though the financial cornerstone of the $387-million (or $400 million, depending on who you ask) funding plan is the sale of future downtown parking revenues for $200 million, the rest of the funding plan is just as important — and right now it’s not complete. The newest word from the Sacramento Bee is that the city will now ask team owners Maloof family for $85 million, up from an earlier $80 million. The Maloofs have never agreed to this kind of financial commitment and have been silent on the issue. Part of that may be a negotiating stand; the other part may be a desire not to be seen as the ones who killed the arena deal when there are so many speculative aspects in play. Similarly, the city plans on asks potential facility-management firm AEG for $50 million.
So let’s say these deals can be done. That still raises only $335 million, leaving the city at least $52 million short. There’s talk of using hotel taxes to fund the gap, but given how financially strapped the city in given California’s precarious economic situation, there are no easily accessible pots of money sitting around. Plus, the city needs to find a source for the $9 million annually it will lose by selling future rights to parking revenue — and that’s money current funding essential city services, like police and fire.
One potential revenue source: using ad revenues from arena signage. We cannot see this happening, for one big reason: if you’re going to ask the Maloofs to put up $85 million, they’re going to want every potential revenue stream to pay that off and turn a profit. You can’t ask the Maloofs to put up such a large amount up front and then take away their chance of actually making money.
RELATED STORIES: Sacramento to discuss parking leases with 11 suitors; Kings’ arena quest coming down to the wire; Sacramento officials push arena idea — but no funding plan; Kings to share financials for arena research; Kings to stay in Sacramento for ’11-’12; Will Kings move? No one seems to know; Report: Kings likely to stay in Sacramento for ’11-’12; Kings relo app deadline pushed back to May 2; Anaheim to discuss aid for Kings; Maloofs shoot down Arco refurb; Kings: From boom to bust; With Kings eying Anaheim, Johnson vows to continue arena quest; Maloofs sell naming rights to arena; admit to looking at moving NBA’s Kings; Johnson: We’ll take another run at new Kings arena; NBA: We’re done with Sacramento arena efforts; Consultant: It makes no sense to move Cal Expo as part of arena project; Maloof: We’re not looking at move to Seattle; Size of Arco Arena site threatens Kings arena deal
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