Two weeks ago, Think Big Sacramento released its 100 Day report (PDF), meant to provide a clear picture of funding and economic impact of a new downtown railyards arena for the Sacramento Kings. The 199-page report is actually comprised of 10 separate reports, the last two covering nearly 70 pages of economic impact. Unfortunately, no reader will find the solution within the 199 pages, though that can be somewhat forgiven since they’ve only had 100 days to put this together. Still, the document is a good, important step on the way to actually building anything because it actually lays out all of the financing options, public and private.
Barrett Sports Group prepared a 74-slide Powerpoint presentation on those financing options. I’ll cut to the chase and list the conclusions (emphasis not mine):
- Public-Private finance plan will likely include a public contribution in the form of land
- Parcels of public land located in the downtown area, many of which are not currently being used or are severely underutilized have the potential to increase in value due to the development of the ESC downtown
- ESC development development allows for the maximization of land sales that could increase the number of jobs created in the short term and increase the economic impact of the project by encouraging private development
- Finance plan will require support from three areas: private investment, user fees and public participation
- User fees represent a key contribution as these revenues are provided by those benefiting from the facility and bear a direct nexus to the complex
Doesn’t tell you much, does it? The conclusion actually belies the other key information within the presentation. For instance, BSG studied every possible public financing option, from taxes to fees to the sale of parking rights. Here’s the entire list:
Unrealistic sources were culled, cutting it from 58 to 36. The following is the list Sacramento citizens, the public and private sectors can consider as feasible for any kind of contribution:
Once you get past the first eight options (the usual taxes used for many venue financing plans) the pickings get pretty slim. There was talk of potentially selling future parking revenue to a private operator in exchange for an upfront payment, which may be illegal in California. And notice how there’s no mention of redevelopment. That’s a good sign that the folks up in Cowtown are ready to engage in a substantive, adult conversation about how this is going to get done. The rest of the year is supposed to be spent creating the funding mix(es) that will be debated by the City Council, and in all likelihood, voted on by Sacramento voters. That’s a tough one to deal with, considering another component study’s admission that only one-quarter of visitors to ARCO/Power Balance come from within Sacramento city limits.
Some other interesting nuggets from the study:
- The Oakland Coliseum gets $1.2 million per year from the numerous billboards spread throughout the complex. That’s about as much money as they get from the A’s. FWIW, the Raiders pay a little more than a half million bucks to the Coliseum Authority annually.
- Public support for user fees is as follows: Selling naming rights: 74%; Parking surcharge: 71%; Ticket surcharge: 57%; Arena fee on concessions: 57%
- One assumed source of revenue is the sale of other various lands, including the Natomas site where ARCO/Power Balance currently sits and another city-owned Natomas site.
- A remote source of financing being considered is called EB-5, or “green card” financing. It would provide a conditional green card to immigrants who invest at least $500k or $1 million dollars. The Atlantic Yards project was cited as an example, though the EB-5 financing was used for ancillary development, not Barclays Center. The EB-5 may be what attracts Filipino investor Manny V. Pangilinan, though as someone a little familiar with the immigration process, I have to say that people with money or business skills aren’t the ones who need help with green cards.
While I’m glad that Sacramento is going through the process (even if it eventually leads nowhere), I’m confounded that Oakland has not gone through even a tiny bit of this. Why not? The Bee’s Marcos Breton nails the similarity between Sacramento and Oakland:
One thing is certain: Sacramento does not have the corporate base to privately finance buildings, such as AT&T Park in San Francisco or the Staples Center in Los Angeles.
Sounds familiar, right? No number of cute T-shirts or banners hung from railings is going to take the place of real discourse over what Oakland needs to accomplish to retain both of its outdoor teams, let alone the Warriors. If Oakland is serious about getting something done it needs to have its adult conversation. Not lip service. Not a claim of getting an EIR done in a year and then not having a draft in nine months. Getting something big done starts with getting the little things done. And if you’re not having that dialogue with your citizens, you’re just avoiding the subject.
P.S. Of course, Sacramento Mayor Kevin Johnson goes and blows away the adult conversation with an offhand comment about how Cowtown can support two teams, including a relocated A’s franchise.