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Monday, May 21, 2012
10 Reasons Why a 50-Year Parking Agreement is Bad for Sacramento
by ron cooper, published on January 21, 2012 at 4:54 PM
Storyline: Access Sacramento News
As our City leaders continue to debate how to finance an NBA-size arena in the downtown, climaxing with a final City Council vote in the next few weeks, here are ten reasons why I believe financing a new area with a 50-year "parking lot fee" agreement is not good for the financial and emotional well-being of our great City of Sacramento.
(1) Fifty-year agreements encourage abuse and escalation of fees. If the capitalist system depends upon free enterprise and competition, 50-year agreements are an invitation for corruption and exploitation. Immediately or gradually, we will all curse the day this deal was done, every time we park downtown.
(2) If you can afford $200-$500 for a family to see an arena-sized rock show or an NBA basketball game, an additional $15-$25 for parking doesn't seem like much. But if you have a "movie-theater-ticket-and-a-drink" budget, you go to the suburbs where the parking is free or at least affordable. Vouchers help big time for these thousands of consumers. Read between the lines of the contemplated parking fees - The City negotiators are desperate to "do the deal" and if free parking vouchers stand in the way, say good-bye to vouchers.
(3) Does anyone foresee a time in our great-grandchildren's lives (or fifty years?) when Sacramento becomes a center for corporate headquarters and major commerce? Not me. Given the current rules for NBA and major league sports arena financing, corporate underwriting is critical to the ongoing success of major league franchises. We don't have money for corporate "luxury boxes" now and we won't have enough in the future. Our biggest publicly owned company (a waste disposal firm) recently announced they are moving to Texas. I can't decide what part of this sentence bothers me the most. (a) As a City, are we not good enough for a company that hauls garbage? or (b) Why does a garbage truck company choosing to move to Texas makes such a big deal to our economy? Could this be an omen?
(4) The best "naming rights" deal the Maloof Family could come up with was a company that sells rubber bands for $30 and is currently sliding into bankruptcy. 50-year contracts for jacked-up parking fees sound more "cow-town" than 10,000 cowbells at a Lakers game.
(5) In the past decade, "silly money" mortgages were sold to good people with dreams bigger than their ability to pay. Selling the parking rights, for all of downtown, for the next fifty years, smacks of the same "Don't you want to aspire to enjoy a better life?" crap used by "vacation time share" salespeople. Once we do this deal, they will never stop calling. What will be the next proposal? Charging an admission to Old Sacramento?
(6) We are great as a "farm team" City. We love our AAA minor league River Cats with ticket prices we can afford. We love Friday night high school football. Our list of "home-grown" great ball players rivals any city in the nation. In Sacramento, we GROW great athletes –men and women - with tolerance, a solid work ethic, and excellent coaching. Let other cities bankrupt themselves chasing "parking lot dreams". We are smarter than that.
(7) Yes, a big league area would be good for local professional sports commentators. To move up to ESPN stature, you must have at least one major league sports team in your town. Do you now understand the motivation behind Grant Napear and others in "talk sports" radio, TV, and print? For the handful of big league sports commentators, this is a “jobs-bill” helping them each further their careers. Without the Kings, they would have to move too much more expensive cities to pursue their profession. How many of you are pro sports commentators wanting to work in New York or Los Angeles? I rest my case.
(8) Let’s organize ourselves and build a smaller downtown arena – one we can afford. Instead of 150 nights per year, let’s fill it up 300 nights with 12,000 music fans, families who love the circus, monster truck smash-ups, ice-skating clowns, high school volleyball championships, evangelical Christians, political conventions, and - your favorite affordable event. Why is building an arena big enough to keep the Kings in Sacramento - at any cost - the sole criteria for downtown improvement? Yes, this is a priority for Kings fans, our Mayor, the sports broadcasters, the Maloof family – maybe 20,000 local people, tops. Let’s do the math, re-prioritize, and adjust our planning.
(9) Wouldn't you rather have 300 nights of hustle and bustle downtown? Imagine, piling the family into the car, buying affordable event tickets, parking inexpensively within walking distance, eating out at great restaurants, dancing at diverse music clubs, and having more fun with fewer overpaid seven-foot millionaires to block the view? Now that's a town that pays its bills, raises great kids, and lives within its own skin.
(10) Financing an arena by collecting parking fees for fifty years just sounds cheap. Talk about a "nickel and dime" approach to big time sports. How about if we required City leaders and the Maloof family to stand on street-corners with a cardboard sign pleading with motorists "Spare Change for the Kings?" No, why would we ask them to do that - for the next 50 years - when we can install parking meters to achieve the same goal.
In conclusion, I really don't care what Charles Barkley and Phil Jackson think of us and neither should our community leaders. Grow up, Sacramento. Be bold and enjoy living within your means.... Isn't that the lesson of the Wall Street financial collapse? Make a budget and live within that budget. Be yourself, not what others think you should be. Live life in the moment and don't mortgage your future. These are the hard lessons we should have learned since 2008. Have we been paying attention?
City Council members, I ask you - 50 years - really? You are creating financial obligations for your great-grandchildren. In the year 2062, when they curse you for paying to park by the minute and for an arena that was demolished 25 years earlier - is this how you want to be remembered? Now that, my Sacramento friends, is a legacy I would rather avoid.
Disclosure:
born in Sacramento at Mercy Hospital
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"It is anticipated that final bidders may each spend up to one or two million dollars performing their due diligence and preparing their responses to a RFP. For this reason,
"it will be necessary to provide assurances of Council’s commitment, subject to CEQA review, to monetize if bid amounts and concession agreement terms are acceptable."
Otherwise, potential bidders may avoid consideration of an RFP without such a commitment."
So, what staff and/or the WALKER consultatnts are saying...Don't commit to the RFP process, unless the city is actually going to lease off the parking operation....and that's how they will pay for the city's cost of the RFP
"there will be additional consultant costs to complete the monetization term sheet, concession agreement and RFP process. Staff will identify those costs and sources of funding in advance of Council action.
Those costs are reimbursable from the proceeds of monetization.
Here's the Report: Do both Control-F search with RFQ as the operative term and one with RFP
http://www.cityofsacramento.org/arena/pdfs/ESC_Update_Parking_Monetization.pdf
We already have spent over a half million on this...first rule of holes..."When your in one, stop digging".....however some would have us dig faster!
According to John Dangberg, the city rec'd over 25 responses to the RFQ.
How does that compare to the amount of response the private sector has shown with regards to contributing to the arena?
Looks like our parking asset is highly desirable to the private sector, guaranteed return on investment. In contrast, the arena, Not So Much, if any.
Just like buying a car, we need to walk away to get a reasonable deal on the table - or not - the Kings may simply be "too expensive" to keep. The City is doing all the work in a public way and at a distinct disadvantage. We need to consider the reality that we cannot handle the debt load that AEG and the NBA and the Maloofs will require. Without the silliness of 50-year parking fees, we are already there but no one seems ready to admit it - we still want to believe in "miracles". But in this economy with a deadline only weeks away, we need to begin the process of moving on. The miracle has already happened when Luckenbill stole the Kings from Kansas City back in the 80's. It has been a good run but the price is too high.
Small Arena Approach - What might "moving on" look like? The Maloofs and/or the NBA will pay off the $70 million debt before the courts will permit them to leave. Once paid off, ARCO/PBP becomes valuable property once again. Maybe that's all we need for future entertainment but I agree with those who argue for a "centerpiece entertainment arena" in the downtown rail yards. Our economy cannot handle $400 million but closer to $100 million might be realistic. The Stockton Arena seats 10,000 and cost $63 million in 2005 Let's relieve the pressure to do a bad deal immediately by negotiating the deal "off the clock" and without the insane luxury requirements of the NBA. We can put our energy into researching other sports and entertainment options using a smaller seating plan of 12-14,000. This could include arena football, minor league hockey, and designed to provide a more acoustic setting for most arena musical performances. Perhaps AEG or other entertainment corporations could be enticed to participate.
Where Might the Funding Come From? - ARCO/PBP might be an interesting property for private investment or further consolidation of State Agencies into one large facility. The economy needs to continue to improve but without impossible deadlines and a more modest design, options open up.
The tough requirement is letting go of the Kings. If the parking deal is the best chance we have, we need to pass. That's why a substitute plan is so important. We can have the entertainment arena in the downtown but on our terms not the Maloofs and not the NBA. Growth is good but only in a fiscally responsible way. This is one idea... there are others... let's move on.
I'm not entirely convinced about the need for a slightly bigger concert hall downtown, or that it would be so inexpensive. I suppose a smaller facility could be put in a smaller space--like the 300 block of Capitol, or in the "Docks" area along the Sacramento River, instead of on top of the Amtrak parking lot like the current arena proposal. But even at a lower cost--who pays for it? And could we get by with Arco, Memorial Auditorium and public events at the Rivercats ballpark across the river, while reinvesting in our own transportation network, local businesses, infill, and, based on response #9, more hustle and bustle on the streets from small/medium sized local music clubs, generating foot traffic and urban interest.
That sort of thing can be parlayed into far more private investment in the urban core--ideally, at least doubling the population of the central city. And that kind of vitality CAN draw interest from corporate headquarters and major commerce (or become the incubator for locally-grown business reaching that size) and thus provide both the tax base and the private financing for a strongly-positioned, financially feasible arena proposal.
It would be a loss... but the financial strain of winning the battle to keep the Kings may not be worth the additional time, energy or cost.
I love Redding, but that is not what Sacramento is. While I do love the community and small-town values you often see here in Sac, I do not think we should be scaling back to small town rural entertainment otherwise we will in turn have a small town rural economy much like Redding's that was one of the worst hit places for foreclosures and unemployment.
Look at places like Green Bay, their small market big heart values have led them to have a powerhouse NFL franchise that IS paid for with capitalism yet shared amonst the community members who chose to invest in their franchise. We have that community momentum and interest here, let's utilize that rather than taking from taxpayers and citizens across the board with deals like this parking situation.
Good article. First and foremost I seriously doubt that most of the "supporters" are even aware that the City Council is considering approving an entertainment facility WITHOUT PARKING! That seems absurd! They want you to park in the city lot at 10th and K and "stroll" with your family or small children, at night, through the lovely, enchanting, homeless laden downtown streets to go to Snoopy On Ice. Right....
Secondly, Chicago tried the parking sell-off game- for a 75 year contract. They spent 85% of their money to pay of pension and other debt- in three years. Now they have 15% of the money left to support the city for the next 72 years. Sacto leadership is heading down the same road. Bankrupting the City to again try and fulfill some "world class city fantasy" is another bad idea.
But we have an arena, we're not looking at funding an arena because we don't have one, we're looking at money. Seems if a new Arena was an answer to our financial woes the arena we currently have would have done much better financially to pay for it. It just seems if we've outgrown our current arena then why don’t we have the money to pay for a bigger and better one?? I'm not in business but it seems if I started out with one restaurant ---and I had to lay off many employees like Arco arena--I wouldn't take a loan to buy a bigger and nicer restaurant. If my restaurant was successful I wouldn’t need a loan, I’d take my profits and then buy a bigger and nicer restaurant and make more money. But, my bet is our officials will look at money and not good ol fashion common sense.
If you have 10 reasons why the parking deal is bad for Sacramento, then argue that. You took that platform and stood on it to instead preach about your own biases against having a new sports entertainment complex. I was disappointed at how misleading your article title was, and that you failed to mention some of the important points that would have focused in fact on the parking deal without bringing into question whether or not the new arena should be built.
Do not use the parking deal as a facade for your tirade agains the Kings, NBA, ESPN Sports, National Media, and overall "City living" and urban growth. You really should have titled your artcile "10 Ways I want to see Sacramento instead become about as desirable as living in Fresno, CA or Stockton, CA or Modesto, CA" (Nothing against those cities, just saying that the reason Sacramento real estate is still more valuable than these cities even in this economic climate is because of things like having the Kings, and other larger market businesses.)
Regardless of the merit of any the the arguments... the writer clearly has an ax to grind...and that is what the editorial page and/or letters to the editor are for.
2) The price of parking is an issue for people who have season tickets & buy lower price tickets.
3) This is the 1 key issue, poorly stated. Although Sacto has a large population, there are no companies that benefit from national media exposure headquartered here. That's a permanent issue for charities & the arts as well as pro sports.
4) This is a just a restatement of #3.
6) Sacto is #26 in population nationally & the capitol of the biggest state & it's smart to aspire to emulate small towns? Really?
7) It's questionable, at least, to attack sports commentators when it's typical for broadcast pros to move in search of better positions.
SR515: The GB Packers are unique for a big 3 sports franchise. All the others are owned by the very rich & they want to keep it that way.
The bottom line is Sacto is a major market without a major company HQ in a state where financing ordinary government operations is a major challenge. Financing an NBA building, or anything else big, without federal subsidy will require both creativity & risk. That's not an endorsement of the parking proposal, it's our circumstances.
I didn't see these things as a result of having a lot of disposable income. I have to carefully select events I attend and make sacrifices somewhere else to afford them. The beauty is that at any time, something special can happen and the memory will last a lifetime. For sports and entertainment fans, that prospect requires leadership with vision to provide those opportunities. If you have a better idea of how to finance a major arena, I would think it should have been brought forward sooner. The city is trying to find the best ways to fund something grand, not dumb down the vision of what we can achieve.