Mayor: Arena ‘plan B’ on hold until after city budget is resolved
Sports fans and arena enthusiasts will have to wait a little longer for word on any “plan B’ for an entertainment and sports complex in the railyards – at least until the new city budget is resolved.
“I was shooting for sometime in May, but it’s going to take a little longer,” Mayor Kevin Johnson told the media Tuesday.
The city spent nearly $690,000 in the past year on consultants and research in preparation for building a new arena in the downtown railyards.
When negotiations with the Maloof family, the Kings’ owners, collapsed, Johnson quickly set off in search of a viable ‘plan B’ – with or without the Maloofs.
Johnson continues to meet with Tim Lieweke, president of Anschutz Entertainment Group, the company that was set to operate the new arena, to “keep the door open,” he said.
“(Lieweke) believes in Sacramento, and he’s open to doing something good here,” Johnson said. “It’s going to take a few more weeks to get to the bottom of it to see what the economics of it really look like, and what the financing will look like and what the legal ramifications may or may not be.”
One of the legal ramifications facing the city is the possibility that if a new arena is built without the Maloofs, they might be released from liability on the loan they have with the city – currently about $70 million, Assistant City Manager John Dangberg told The Sacramento Press Monday.
“It poses a significant risk to the city in moving forward independently, but that needs further discussion and analysis,” he said.
Johnson said AEG could not make a commitment to building a new arena without an anchor tenant, which is one of the options Johnson and the city are exploring.
“What (AEG) did in Kansas City was an anomaly in a lot of respects,” Johnson said. “In terms of building a standalone arena, it’s something that is tough for them to do, but we’re still having discussions, and they are open to ongoing dialogue.”
Despite not having a backup plan at the ready for an arena, Johnson said the money spent on the project so far has not been wasted.
“With the intermodal and the parking and with the environmental work that needs to be done, that was a good investment for us,” Johnson said. “We didn’t get a return on every single dollar, but that’s the cost of doing business, and everyone understands that.”
Meanwhile, the city’s budget, including a $15 million shortfall, is the priority now, Johnson said.
“We want to resolve that and get it behind us get, then I think we can continue to work where we left off on plan B,” Johnson said.
Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.