The Sacramento arena financial impact would be $11.5 billion, according to city officials, but opponents still want to put the matter to a vote.
Mayor Kevin Johnson is proposing a $258 million subsidy for the new arena, which would bind the Kings to Sacramento for the long term. That $11.5 billion number includes all potential development spun off as part of he Sacramento arena financial impact: restaurants, office buildings, retail. That’s a large number, to be sure, and it’s highly speculative, per the Sacramento Bee:
The building has to act as a catalyst for development for this to work,” said Roseville economic consultant Cathleen Dominico of Capitol Public Finance Group, author of a recent arena study commissioned by a political group tied to the mayor and the Kings.
Her study bears this out. It says the city-owned arena, scheduled to open in the southeast corner of ailing Downtown Plaza, would generate $11.5 billion in economic impact over 35 years. But it also says that roughly half the projected economic benefit would come from businesses – bars, hotels and other commercial development – that don’t yet exist and aren’t guaranteed to materialize. That includes hundreds of millions of dollars in so-called ancillary development planned by the Kings for the rest of Downtown Plaza, as well as new development that Dominico predicts would emerge elsewhere in downtown Sacramento, beyond the mall’s boundaries.
“The key to this is actually the ancillary development,” Dominico said. “Spinoff developments … restaurants and bars that haven’t been built yet.”
This ancillary development presumes investment by the Kings ownership in the arena area, but the current agreement with the team doesn’t require that investment: it calls for only a $189 million investment in arena construction.
Meanwhile, a group of citizens opposing the arena may go to court after Sacramento’s city clerk rejected a petition drive for a referendum on city spending. Sanchez’s reasoning: there were slight differences between the petitions circulated, and it was on this basis the petitions were rejected.