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City staff and Think Big Sacramento representatives presented the City Council with technical and financial option reports on the proposed entertainment and sports complex Tuesday, and asked council to direct them where to go next.
“We have a lot of work to do in the next six months,” said City Manager John Shirey, “and we need both internal and external resources to do it.”
To keep things moving forward, though, Shirey told council members that he plans to deliver three things: “a game plan with a timeline, a list of the consultant work we need and a list of how we’ll pay for those things.”
Although the technical report presented Tuesday included more detail than previous reports, Shirey said it will take some time to “dig deeper and determine if the project is really feasible.”
Shirey said he and his staff will need “special help” from outside resources to do that digging. That means turning to consultants, investment bankers and outside council for the “due diligence” necessary to thoroughly review the entertainment sports complex proposal, Shirey said.
One of the aspects of the ESC project discussed Tuesday was the potential for re-use of the current Power Balance Pavillion site in Natomas.
“Natomas re-use possibilities present tremendous opportunity,” said Rachel Hazlewood, Economic Development Department senior project manager. “We need to develop a plan of action to bring (the space) to its highest and best use.”
Hazlewood said that, because the building moratorium in Natomas will be lifted in 2013, the large site may allow for multiple users and will require rezoning – aspects of the “total arena plan” that need to be considered.
“We will need to identify potential business prospects and get the site shovel-ready for development,” Hazlewood said, “before we can re-use the Natomas site for something other than the arena that is already there.”
Arena finance expert Dan Barrett outlined the recently released Nexus report of finance “menu” options.
Barrett told council members that a public-private partnership is essential to the success of the project.
“When you structure a deal like this, it has to work for all parties,” Barrett said. “It’s clear that the public cannot fund this facility on its own, and the team cannot fund it on its own.”
Barrett said that parking income potential discussed in the Nexus report is “not a standalone financing solution,” and the Kings’ loan has to be part of the solution.
“The $387 million cost (in the initial feasibility report) may change,” said John Dangberg, assistant city manager.
Dangberg noted that infrastructure costs are not included in the estimated $387 million cost of the facility.
Dangberg urged council members to direct staff to look at financial, legal and practical aspects of the project.
“As we come up with a definitive financing plan,” Dangberg said, “we want to include enough resources to cover the real cost of the project as it becomes clearer.”
Barrett said it will be important for council members to explore parking opportunities “aggressively,” and to “critically evaluate” other public funding options.
“We’ll work together with you and staff to prepare a definitive financing plan by the end of December,” Barrett said.
Although Mayor Kevin Johnson acknowledged that the reports presented to council were preliminary reports and not a “final proposal” for a new complex, he said they were a good place to start.
“We did our best to protect taxpayers with this plan,” Johnson said. “This is about jobs – 4,100 jobs – for our region.”
Johnson said the project is in “a very critical stage,” and he hopes City Council and the Think Big committee can finalize as much as possible by January so the city can be in the best position possible by the March deadline.
Councilman Rob Fong said he supports the arena project and that there needs to be “a closer look” taken at all of the financing options suggested in the Nexus report.
“It’s really important that we thoroughly vet what we are hearing,” Fong said. “We have to make sure the general fund is held harmless, and figure out if there’s a way for us to go forward with the project”
For Think Big, the challenge remains to keep going “until we reach a point where we know for sure that we can do this – or that we can’t,” Fong said.
The City Council asked staff to take the reports back for more review. Council will discuss arena options further at its next meeting, on Sept. 20.
Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.