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STORYLINE Arena Deal

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Dear District 6 Constituents and City of Sacramento Residents,

At the City Council meeting last night, I voted against a financial plan to build a new downtown sports area. I would like to share why.

Over the past few months, I have heard from hundreds of constituents and city residents who have called and emailed my office. I’ve talked with advocacy groups, business owners, Kings’ fans and interested parties in the arena deal. In addition, I’ve done my homework, researched other city arena deals and read through over 1,700 constituent surveys on this issue. I came to this conclusion carefully and thoughtfully.

In addition, I want folks to know that I am not an automatic "no vote" on public funding for an arena. My stance is that if we put public money into this project, it must be a good deal for the city and its residents. The deal put before us Tuesday night had too many risks and assumptions and not enough upside. It just isn’t a good enough deal for the City of Sacramento.

Here are the problems I see…

Problem 1: Pressing City Priorities

A Parking Authority idea is very intriguing and should be pursued regardless of whether the Arena deal goes forward to help produce millions in new monies annually for our City. If nothing else, this process helped us get here. However, it's really a policy choice where the new parking revenues should be allocated.

For me, it’s unconscionable to put all new parking monies toward the Arena with so many other pressing City needs. In my Council District 6, all three swimming pools are shut down. My community centers and libraries are open only a few days a week and staffed at skeleton levels.

All youth sports programs were eliminated last year citywide. Park maintenance and code enforcement staffs can’t provide adequate service levels, and more than 200 police and fire fighter jobs have disappeared in recent years.

And in less than 3 months, there will be more layoffs as we make another $25 million in budget cuts.

While I believe we must invest in the City’s future, we must also address the City’s current budget needs – unfortunately, the plan presented Tuesday night does NOT do that.

Problem 2: The Kings Loan

Under this plan, the current Kings $67 million loan will not be paid off – but refinanced. This loan would linger on the City’s books for another 30-plus years impacting the City’s credit-score and debt-ratio.

In addition, I am very leery about the absence of any real collateral on this refinanced loan. The existing loan the City has with the Kings has the arena and adjacent land as collateral. This refinanced 30-year loan would have neither. What bank would accept that deal?

This loan should be secured against real property of equal value, or with a significant financial interest, or with an NBA guarantee to protect the City against a default.

Problem No. 3: The $9 million General Fund backfill has too many assumptions, while the deal produces minimal upside

The plan backfills the City’s General Fund for core city services and magically adds up to $9 million. That dollar amount is not guaranteed and is based on assumptions. For example, I’m concerned about the $4 million annual projected income from ticket surcharges. What happens if we have another lockout or strike, or poor attendance year-after-year due to a badly performing team? Our neighbors in Stockton and Oakland lost big because of overly optimistic income projections for arena and stadium deals. Instead, why not insist that the Kings, AEG or the NBA guarantee the $4 million annual backfill?

More importantly, why are we just breaking even financially? Does anyone think AEG and the Kings only hope to break even? If it’s going to make money for them, then it should make money for the City and provide revenue for our priorities—especially since we are the ones putting up 65% of the investment.

These numbers are very revealing to me – AEG is investing $59 million and netting $5.7 million annually, while the City of Sacramento is investing $256 million and netting $1 million annually.

Problem No. 4: We’re going at it alone

We started with a regional effort last year, but today we stand alone. Sacramento would be going into this deal with very little help from other government entities in the region. Other small-market NBA cities have partnered with neighboring local governments to help make the deal work. West Sacramento and Yolo County have not been engaged as partners. They are fewer than 1,000 feet from the proposed arena site and have many businesses and retailers who would benefit from the arena’s presence. Officials in the City of Rancho Cordova have shown a willingness to listen to a partnership proposal, but they have not been engaged either. This arena will be a regional amenity; we cannot and should not be standing alone.

Problem No. 5: Our City contribution has doubled in 5 months

Five months ago, City staff and the Mayor’s “Think-Big” Committee stated that our City’s cost contribution for the arena would be 33%. That was a fair deal.

• A few months later, the City’s cost contribution increased to 50%.
• Last night, the City’s cost contribution increased further to 65%.
• That is an increase of nearly 100% since September.

As I said earlier, I am not an automatic “no vote” on public funding for an arena, but it has to be a better deal for our City and its residents. We deserve a bigger bang for our buck.

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Conversation Express your views, debate, and be heard with those in your area closest to the issue.

MLayne

edited on March 7, 2012 | 5:58 PM

You said it Mr. McCarty. Now if we could get the rest of the council to understand that our city government isn't supposed to operate like a high-potential, high-risk, growth startup company. Thanks for doing your job.

18 4

William Burg

March 7, 2012 | 6:07 PM

As to point 2: Why not the Kings as collateral? If the Maloofs default, the city of Sacramento takes sole ownership of the team.

20 2

Ben Ilfeld

March 7, 2012 | 7:26 PM

Sounds good to me.

13 1

MyQuest

March 8, 2012 | 1:06 PM

Me too.

4 0

fifthgensacramentan

March 8, 2012 | 2:04 PM

Without knowing how much of that 75 million NBA credit line that has been exhausted, or if other shares of their interest have already been signed away...it's a purely speculative value.

And that Refi...will still be a 2nd position to the NBA ...and without brick, mortar, concrete or Terra firma collateral.

What would a loan shark charge for the interest rate on that?

8 1

Rhys02

March 7, 2012 | 7:51 PM

Perhaps Mr McCarthy-- the rest of the Council (sans Sheedy of course) understood the development will result in NEW sales tax money., new hotel taxes and new property tax revenue that will dwarf the measly nine million you are so fixated on and unless the new revenue is squandered on police and fire department salaries will pay for all the swimming pools you could ever want..

10 13

Tony Sheppard

March 7, 2012 | 7:58 PM

Why would that be the case? It just moves business from Natomas to Downtown - it's not like all the business is new and unique.

15 4

LandParkRes

edited on March 8, 2012 | 6:54 AM

Do you realize how much economic activity equates to $9 million in local sales tax revenue? Roughly $115 million in new activity every year. You can ease the burden on sales tax to reach that $9 million with hotel and property taxes, but that still assumes a large surge in new economic activity. As Tony suggests the arena doesn't add new economic activity, it moves it. There will still be the same amount of Kings games, concerts, special events. Those events just won't be in Natomas, but in the railyards/downtown.

11 4

sacneighbor

March 8, 2012 | 8:12 AM

Can we keep the dialogue civil and not call out individual Council Members? This was a difficult decision and I applaud both Council Member McCarty and Council Member Sheedy for voting their conscience and bringing forth an intelligent dialogue especially in the face of a very rah-rah crowd more like a sports tailgate party than a City Council debate. Both McCarty and Sheedy brought up things and questions that needed to be said and put on the record. To not respect every Council Member's input and resort to demeaning comments should be left to Rush Limbaugh! Besides--these are not new sales tax and hotel tax revenues. We already have an arena that brings these things to the City of Sacramento. And as for property tax I wonder what the new assessment would be on an empty arena building in Natomas? Thank you Council Member Ashby for keeping that issue on the burner!

7 2

Curmudgeon

March 8, 2012 | 8:26 AM

It moves business from Natomas to Downtown, but in doing so it gentrifies downtown assets, without harming Natomas. Natomas remains what for the most part it always has been--industrial parks and big-box retail.

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sacneighbor

March 8, 2012 | 8:56 AM

You certaihky are a cumudgen! Athough I agree that a new entertainment sports complex in the railyards would be a good economic generator for downtown from a visitor perspective for downtown (thank a higher being that Thomas Enterprises is out of the game) it is not a total net gain in new taxes. As for gentrification that is a two edge sword. As a downtown resident I enjoy very much the benefit of downtown urban living but gentrifying brings other things such as displacement of populations who can no longer afford the living expenses (need I say increase parking costs?), etc. I love the improvements that have occurred in both Midtown and downtown over the 32 years i have lived in Sacramento and I am looking forward to cars on K Street taking hold to make a real diffeence to our CBD. It is also important to not forget the diversity of our city that makes us strong and that includes the ability to live in diverse areas. You say Natomas is only industrial parks and big-box retail but do not forget that it includes over 55,000 residents who constitute over 10 percent of the population of our city. They, for the most part, choose to live in a suburban environment and we shoudl continue to make that environment as good as we can for them and for the city. As for the industrial parks they have been great job generators for our region and city and they continue to be one of the shining lights even in the current economic mess. The big-box retailers bring large amounts of sales tax revenue to the city. It is our diversity that is our strength. If we wanted a homogenous city we could all move to Roseville!

3 1

MyQuest

March 8, 2012 | 12:55 PM

Curmudgeon, actually it doesn't simply move Natomas business downtown. Without a new arena, the business evaporates. That's your classic lose-lose.

4 2

Billyjames4545

March 8, 2012 | 4:44 PM

Yea, it's crazy Nato is gona be a ghost town. Every day there are no events or games at Arco currently, all Nato businesses have been shuttering their store fronts. They are so depended on the kings and tractor pulls these days. I mean, when I have to stand in line at the Safeway behind Arco, the 5 customers in front of me and every other medium to long line is just full of people in kings gear and Rio Lindans with dirt in their hair smelling of motocross. I've worked in natomas long enough to see that it is rather self sustaining 24hours. Anything that does close, is do to over saturation at this point.

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Curmudgeon

edited on March 9, 2012 | 9:49 AM

Uh, sacneighbor, I'm all for a new arena. If the arena isn't either modernized there or rebuilt downtown, then the Kings and other events are gone, period. That's a loss for the whole area.

What I am saying is that Natomas is a fine neighborhood (a nicer neighborhood to live in than most of the rest of the City of Sacramento proper, really) and it can recover without an arena. Big Box retail and industrial parks are GOOD as far as I am concerned.

Mindlessly parroting slogans like "diversity is strength" doesn't change any of that.

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jctar

March 9, 2012 | 1:11 PM

A new arena downtown will draw far more events than a deteriorating or absent arena in Natomas. No decent acts come to the Natomas arena anymore. The NCAA now passes on the Natomas arena, losing money for the city and businesses, especially hotels that count on non-residents; also, a new downtown arena would draw more conventions to town. But the idea that a new arena would just move money from Natomas is unrealistic. No new arena equals a complete loss of revenue generated by the Natomas arena because Natomas will close when the Kings leave. So the choice is a new arena that draws more revenue to the area than the old arena or no revenue. How will the general fund replace that lost revenue? How will Sacramento get people from surrounding cities to spend money in Sacramento or get new businesses to open in Sacramento as opposed to the outlying cities? A revitalized downtown is the Sacramento's only defense against urban sprawl, which happens mostly successfully outside of the city, and a downtown arena is the only hope for revitalizing cowtown.

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Tony Sheppard

March 9, 2012 | 1:32 PM

What new conventions will it attract? We already have great convention space. The problem, historically, with the convention space was that the largest events the convention center could accommodate were bigger than the nearby hotels could complement - which is why you see a lot of trade shows and single day events for a drive-in audience and more moderately sized multi-day conventions for fly-in attendees. I'm not sure how a new arena c.10 blocks from the convention center is going to change the city's convention dynamics.

And whether or not a new arena draws new crowds to downtown, it won't stop the demise of at least some hotels and restaurants in the Natomas area, or reduce the perceived value of homes that were often advertised as being within walking distance of the arena. I understand your point that much of that will happen regardless of this decision, but many people are making it seem as though the positive impacts of a new arena are entirely new and different, and that there's no downside or transfer of wealth/benefits.

5 2

sacresident515

March 9, 2012 | 2:49 PM

Tony even if business will now move from Natomas to Downtown - having that business for decades to come and the growth there for decades to come is FAR better than ending up with NOTHING. The Kings leave, we get NO Kings game business. Period.

2 2

JimMichael

March 9, 2012 | 3:30 PM

It's important to remember that this article is not about why the arena shouldn't be built or moved, but the details of the arena deal.

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Tony Sheppard

edited on March 9, 2012 | 5:56 PM

sacresident515 (wow, your parents weren't good at naming their kids) - how do you know there will be growth there for decades to come? And the alternative isn't "nothing" unless you actually think that the Kings are the only business/organization in town. This is just one possible use of that parcel of land.

And not having the Kings and not bankrupting the City may be the better option - as was just pointed out, the article was about the deal and the level of risk involved for the City. The City is carrying all the risk here - for a longer period than arenas even tend to be viable.

5 1

Lisa Ouellette

March 7, 2012 | 9:02 PM

Thank you, Councilman McCarty, for voting your conscience and for delineating concrete reasons why this deal is not fleshed out.

18 1

William Burg

March 7, 2012 | 9:04 PM

Indeed--thanks for sticking to the facts, not lobbying pressure.

14 2

LisaB23

March 7, 2012 | 10:04 PM

Yes! Thank you.

14 2

Geoff Sakala

March 8, 2012 | 7:13 AM

I still advocate for a portion of the team to be sold/owned by local residents. This would provide those most interested in the Kings and a new arena with an opportunity to fund the team and keep them local. By selling shares in the team much like the Green Bay packers did, ownership in the team is a local asset to be passed down from generation to generation. Offering say 100,000 shares at $100 a piece could raise $10 million and relieve the City of Sacramento from such a high investment and open up funding to other local entities like individuals, companies and governments. I for one would definitely buy a share or 10 to keep the Kings in Sacramento and support the efforts to build the new arena. I suspect there are enough die hard fans who would also.

13 0

LandParkRes

edited on March 8, 2012 | 7:17 AM

It would also ease the burden on Sacramento residents as shareholders would come from the surrounding area.

13 1

sacneighbor

March 8, 2012 | 8:16 AM

Agreed! We need to take control of the team's destiny especially IF we foot two- thirds of the bill for their new playground. Everyone in the region should participate. Almost 70 percent of all Kings tickets are bought by people from Western Placer County. Roseville needs to open their checkbook!

10 1

sacresident515

March 9, 2012 | 2:51 PM

I agree!!! I have been saying this the whole time! That $10 mil raised can be towards kings, and 10 mil or a percentage of parking deal back towards general fund.

0 0

KMtwin23

March 8, 2012 | 8:29 AM

You cant ignore your constituents that do want an arena. Status quo is unacceptable. you may feel comfortable doing nothing, losing the Kings will make Sacramento better but lot of use disagree with you. You may attack the arena deals but if you can not come up with your own solution to keeping the arena then you don't deserve to attack the current plan. Your a hindrance to improving Sacramento from cow town to a city with NFL, MLB, NHL, teams and why not aspire to host the Olympics if the opportunities arise. With your placement in the city council, your hurting Sacramento.

6 14

LandParkRes

edited on March 8, 2012 | 9:24 AM

Did you read what he wrote? He's not against the arena. He's against the public footing 2/3 of the bill.

Public polling shows very little support for public financing of an arena.

15 2

Steve31

March 8, 2012 | 1:56 PM

Why can't he ignore his constituents. Our appointed (not elected) council member did.

5 2

Shawn Eldredge

March 10, 2012 | 6:45 PM

i read what he said and i feel the same as KMtwin23. that it is too late to be attacking the deals. I feel all council members should have been working towards deals that worked for the city ( not just the mayor ,volunteer & paid consultants) . Better explaining the difference between enterprise funds that do not feed into the genreal fund vs direct general fund sources of revenue etc .. we have been truly kept out of the loop, exposed to shallow propaganda and rhetoric by all sides.. As a tradesman work is good, building an arena is good work , working at the arena is good work , building support businesses around an arena is good work, I do not get any work from parking funds, an empty arena or bankrupt railyards
My perfect councilperson needs to work make me money so i can pay taxes that support my city services ... i appreciate Mr Mcartys statements, Yet i wish they were more constructive and that they had happened a year ago..

0 4

JimMichael

March 11, 2012 | 8:57 AM

@Shawn How could this have happened a year ago? This deal was proposed 2 weeks ago.

5 0

William Burg

March 11, 2012 | 12:08 PM

That's how it always works with this bunch. Up until the moment of the vote, they say "It's too early to criticize this deal, we don't have all the details yet, everything so far is just preliminary!" Then the moment after the vote, the rhetoric shifts to "It's too late to criticize this deal, it's already done, the details are long since set in stone, you should have brought this up last year!" It's a handy device for shutting out opposition--we saw it in SMI I-III and we're seeing it all over the arena deal. Apparently the only legitimate time to bring up differing views is when the city council is actually voting, at which point they have already made up their minds.

6 0

Sarah Connor

March 8, 2012 | 8:33 AM

While I have been an outspoken critic of Councilman McCarty's tenure on the council, I must give credit where credit is due. Mr. McCarty's decision was wise, well thought out, difficult, and in the best interest of Sacramento.

It takes a lot of guts to do what Mr. McCarty did this past Tuesday.

Thank you, Kevin. Well done!

16 2

Izzy Gardon

March 8, 2012 | 9:27 AM

Thank you for standing up and doing the right thing. Your leadership is inspiring.

17 2

PocketGOPer

edited on March 8, 2012 | 9:40 AM

Why did McCarty vote to lay-off the same city employees last year that he now wants to protect? Hypocrite.

6 11

Tony Sheppard

March 8, 2012 | 12:09 PM

Right - because recognizing that you don't have enough money to pay employees is the same as eagerly wanting to get rid of them.

10 2

MikeM

March 8, 2012 | 10:42 AM

Thank you for your vote, Kevin McCarty.

The big question that remains for me: Is there any actual way to stop this process now? Yes, I know that our Council may look at the development plan and decide to halt it there. Theoretically, that is possible. But as a practical matter, would that happen?

The issue of the collateral on the current loan is a very big issue. Why we would get to 2015 and then have the Maloofs supply collateral for a new loan is beyond me. I don't believe the Maloofs can supply the collateral at this point in time. Worse yet, I don't think they'll be able to supply it in 2015, either.

So what happens to this deal and we get to 2015, it's time for the Maloofs to supply new collateral for a new loan... And they can't? We have this building, and we have a scofflaw anchor tenant who cannot live up to agreements made. What then?

I think I know what KJ will do: Supply collateral himself for the new loan. He'll try to sell more revenue bonds to cover that amount. He may even push a small tax increase to pay for it, with the logic that we can either watch the City go bankrupt, or we can have (for example) a .25 cent sales tax hike for 5 years to repay those bonds.

I hate to sound mean, but later on down the road, if anyone calls for a "small tax hike" to bail out this deal, I will vote against it.

9 2

jctar

March 9, 2012 | 1:24 PM

"So what happens to this deal and we get to 2015, and it's time for the Maloofs to supply new collateral for a new loan... And they can't?"

Then the NBA will force the Maloofs to sell to somebody who can-- the NBA will never allow a team to default on a loan of that size and that public. Basically, if the Maloofs don't have the collateral it is a win win situation, unless you like or are the brothers Maloof

3 1

Hecka S.

March 8, 2012 | 11:07 AM

Thank you for your no vote.

8 2

jaybee

March 8, 2012 | 11:27 AM

Sheedy's excuse is that she is going to be running against KJ for mayor and needed some sort of lightning rod issue to even have a chance to get more votes than Padilla. She supported Q&R and the arena and then changed sides on the issue to suit her political career.

As for McCarty, he has no answers to the shrinking general fund and he will continue to vote for killing services as he has done in the past. His "no" vote isn't to be praised, it was weak and anemic. His supporters can praise him, but they may have to replace him because he's not leading them anywhere.

5 9

Isaac Gonzalez

edited on March 8, 2012 | 1:36 PM

If Sheedy is running for Mayor, she better hurry up and pick up her papers. She's got about three hours left to file.

http://cityofsacramento.org/clerk/elections/candidateinformation.html

And supporting Q & R isn't hypocritical for her; she supported putting it on the ballot, and the voters said no. She continues to behave within the will of the voters.

12 1

mtsacramento

March 8, 2012 | 12:00 PM

If one/some of the many things that CAN go wrong with this deal DO go wrong, and the inevitable chorus of "who could have foreseen this??" begins, hopefully this article will still exist as an example.

9 0

joell83

March 8, 2012 | 12:49 PM

Yea used the parking money to fund pools and parks until the money runs out! Wise investment.

4 3

LandParkRes

edited on March 8, 2012 | 1:04 PM

The parking money would be a steady, annual revenue stream. People park every day, year round. This is why it is being used to fund the arena, because it's reliable.

The debate is - if parking is a reliable revenue stream, should we spend it on the arena? parks? pools? roads? libraries? police? firefighters?

7 1

Ben Ilfeld

March 8, 2012 | 1:43 PM

But the money from parking is alread going into the general fund.

6 1

TheVoiceofReason

March 10, 2012 | 9:57 AM

Ben, the money from parking enforcement fines and parking meters goes to the general fund. However, specific revenue from the meters is limited as to what it can be used for. The 9 million that is the major concern of being lost comes from enforcement fines

The garages and lots are operated within an enterprise fund. Revenue generated by the lots and garages is limited to "the cost of operating, maintaining and paying off existing debt on the current inventory and providing for new lots and/or garages. It does not fund the general fund. Money that is periodically borrowed from the enterprise parking fund must be paid back inclusive of the interest that would have been accrued on the borrowed funds.

6 1

MyQuest

March 8, 2012 | 1:04 PM

I thought the no vote was premature.

If it was a vote for statis I might buy the logic since we are a nice town comprised of nice neighborhoods (if you have a nice public job)...but it was a vote for decline.

2 3

madzillagd

March 8, 2012 | 1:37 PM

The problem with his logic is this - he wants to fund other programs with revenue that won't exist unless you build the arena. People don't park in the city on nights/weekends. The arena is what is going to bring you that revenue. No arena - no money to spend on other areas. Invest in the arena - have more money to spend on those other areas that don't generate revenue.

As for all the other comments - I 100% agree that the city is taking on the RISK of the transaction - but they are not PAYING for 100% of the transaction. I'm not talking about the city/Maloofs/AEG split - I'm talking about the parking revenue. People that park in downtown now and in the future are not 100% city residents - these folks are from Sac County, Yolo, Elk Grove, Folsom, Roseville etc. The $200M in revenue the parking is projected to bring in comes from REGIONAL sources. The city is not going it alone in this - they are using the $$ spent by REGIONAL users to fund the arena. If McCarty wanted to bother to do a little research I'm sure the Kings would provide him a breakdown of their season ticket holders showing all the customers that don't live in the city of Sacramento. These are customers that will be driving in and parking in city lots in the future - essentially paying for the city's arena out of their own pockets.

God willing I'll still be going to Kings games for the next 30 years. If I average 20 games a year for that time, paying $10 a game in parking (current price) = over that period I'd be paying $6,000 (more likely far more) in parking to the City of Sacramento. I am not a city resident and I wouldn't consider my $6,000 city money. My $6K is regional money being contributed to a city project. I am one of millions of REGIONAL customers that will use this facility and as a result the facility will be paid for through a REGIONAL effort through this parking model.

6 9

jeffeff

March 8, 2012 | 3:43 PM

INDEED, sir. Throughout this whole mess, it would appear that arena opponents have woefully underestimated the staggering ability of the Kings' established, existing customer base -- the Rosevillians, Rocklinites, Elk Grovers, etc. to whom you refer -- to drive their cars anywhere and everywhere, costs be damned. Additionally, one couldn't help but wonder whether anyone bothered to get close enough to any of the great unwashed to find out that paying obscene amounts of money to park your car is a (perhaps grudgingly) accepted part of the going-to-a-game experience.

Sure, an empty parking garage is, strictly speaking, a "public asset" -- but not one that's going to keep many swimming pools open. A parking garage filled by drivers paying $30 or $40 (I think the going rate just might go up a bit from the current $10) per vehicle -- you're talking about turning something just this side of blight into a veritable cash machine. BUT -- there has to be a reason to want to park there. An empty convention center, a bunch of eateries that close at 3PM, and the IMAX theater aren't gonna cut it.

1 3

JimMichael

March 8, 2012 | 4:19 PM

The deal also gives the Kings all game-night parking revenues at our City garages netting them $2.6 million annually. These game-night parking monies should be on the table for City priorities and needs, and this clause really undermines the overall market value of the parking portfolio.

6 0

JAT

March 13, 2012 | 9:56 AM

Millions of REGIONAL customers? Really? Those untold millions of people will come from...where exactly? There are other arenas where regional people already go. The only unusual draw from far and wide would be Kings games, and if you think millions of people from all over are going to venture to Sac for that, you're delusional.

1 0

Billyjames4545

March 8, 2012 | 4:53 PM

I don't think swimming pools=the growth a child gets from growing up rooting for an underdog. If anything having the Kings in town for 27 years has minted the Sacramento region more sympathetic liberals. Yet, they ironically would rather have more drowning space.

1 7

Callevi

March 9, 2012 | 9:47 AM

Cal Levi Hey, I have a great idea. Lets convince people to give us their guaranteed revenue stream for say. . . Forever and in exchange we will build a theatre where our soap opera stars can play in. Lets not let them decide their own finacial fate either, lets just do it through the local oligarchy. And to ease public outcry lets borrow the right wings trickle down affect argument. Democracy is a great theory, man however, is too corrupt to implement such an experiment.

4 0

sacresident515

March 9, 2012 | 2:35 PM

Councilmen McKarty, I think you have very valid points. Yes, we have more pressing budget concerns, yes the region will benefit and should step up and help, yes this is a huge potential liability, etc. But let me make it nice and easy for you:

If you're not part of the solution, you're part of the problem.

I have seen nothing but criticism from you and Councilmen Sheedy on this, yet I do not see either of you presenting any form or inkling of alternative, instead just criticism and opposition.

How are you expecting West Sac to step up when you're advocating against this deal in the first place? How are yo7u showing uncertainty in the parking privatization i the first place but then retracing this argument with conflicting perspective that we should have privatized parking to cover our budget gaps in the first place? The problem with that mentality- is utilizing privatizing parking would be a band aid solution on larger problems (example: our entire region economy having been previously been based on real estate expansion which crashed and caused a domino effect.) While I myself am also skeptical about this parking deal, the sole reassurance I get is in the fact that the City is cashing this revenue source in to put it into something we hope will continue to generate revenue and business development and attraction.

Rather than frantically digging ourselves enough room to breathe in this hole we’re in, we are using a new tool we have not used yet and setting it aside to build us a potential ladder to help us out- it may not get us all the way out, but this could be 10 more steps to do so.

Is this ESC going to have the guaranteed effect on our area that we hope for? No. But we’ve already done what you’re doing before – pulled the plug on the idea immediately. Insanity is doing the same thing over and over and expecting different results, we’ve played it safe, we’ve dodged making any commitments to growth and economic development like this out of fear.

I hope that rather than resisting this at every step- you too jump in and vocalize your concerns in a productive manner on behalf of your constituents. I liked Councilmen Fong’s comments- he voted yes, but said hold the applause because he wants to keep the progress moving and not vote no with the risk of permanently burying this project but he too has concerns he wants to see addressed in the logistics.

Thus far you have not been part of any form of solution to any of these issues, not even the concerns you bring up, because you have been uncooperative and resistant altogether and isolated yourself – at least from what is presented in the public eye, I realize to everything in politics there is more to the story.

This is not meant to be a form of any disrespect towards you, I have definitely agreed and respected very much of your thoughts and decisions- however, I ask that in this scenario you turn these valid points that you based your opposition on into something productive. Look at how Councilmen Ashby planted her support for the ESC discussion but continued to bring her concerns for Natomas to the table- instead of fighting from the outside, she got on the inside and offered her support to bargain on behalf of her concerns for Natomas.

Whether or not one is for the ESC as being the choice of invested efforts to help Sacramento gain the momentum it needs to come out strong from the recession, we all do need to work collectively and support the City. This truly is a great City, and I hope to see you fighting on behalf of those of us in it to ensure that we gain the most from the ESC development and that we do not end up like Stockton for example, that we have eyes and ears like yours looking out for where they made wrong turns to help guide OUR city into the right direction.

Sincerely,

One of many Sacramentans!

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sacresident515

March 9, 2012 | 2:36 PM

PS - sorry I spelled your name incorrectly. Honest mistake! Councilmen McCarty not McKarty :)

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JimMichael

March 9, 2012 | 3:37 PM

First, It's hard for council members to be a part of the solution when the Mayor does not include them in the arena deal process.

Second, the council was briefed on the deal less than a week before the vote. It's hard to examine, research and propose solutions in that time frame. The item on the agenda was not up for revision, just for an up or down vote. So all the council could do was ask questions and vote.

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Tony Sheppard

edited on March 9, 2012 | 5:55 PM

He has suggestions in his article - they're right there:

On the issue of the loan: "This loan should be secured against real property of equal value, or with a significant financial interest, or with an NBA guarantee to protect the City against a default."

On the general fund backfill issue: "Instead, why not insist that the Kings, AEG or the NBA guarantee the $4 million annual backfill?"

And in closing he said: "As I said earlier, I am not an automatic “no vote” on public funding for an arena, but it has to be a better deal for our City and its residents. We deserve a bigger bang for our buck."

He did exactly the things you're criticizing him for not doing: He did offer alternative models, he is vocalizing his concerns, and as was pointed out, he wasn't given an opportunity to work on the deal or amend it.

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TheVoiceofReason

March 10, 2012 | 9:32 AM

One of Many Sacramentans?

Let's test that theory objectively...1 city resident at a time...1 resident equals 1 vote

I suggest your "Many" is a far cry from a majority of Sacramentans who actually live in this city.

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Shawn Eldredge

March 10, 2012 | 6:56 PM

I am one of the many

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sacresident515

March 12, 2012 | 9:37 AM

@JimMichael there is a reason I added: “at least from what is presented in the public eye, I realize to everything in politics there is more to the story.” I realize that there is a lot we do not get to see – but on the flip side, that is also why I brought up how Ashby stuck her foot in the door and used her support as bargaining power for her concerns. If McCarty cannot play the game of politics (whether we like the game or not) then he doesn’t belong in politics.

@TonyShepperd (and JimMichael) – those solutions were not put together nor viable. If McCarty felt that strongly to fight for “us” than why did he not act and move on that? The City was on a short timeline that was beyond City control- it is what the Maloofs and NBA cornered the City into. No, I do not condone the fact that this had to be done in haste – but the Maloofs and NBA are not entirely to blame for this, the City and the rest of us knew our current sole Entertainment and Sports Complex was out of date. The Sports side of this gave the City the kick in the butt it needed to actually be proactive rather than complacent. McCarty cannot expect the deadline or timeline to be slowed down for him and his constituents just because he does not like it- if all of you opposing felt so strongly – then you should’ve done something about it and presented a better plan. But nobody stepped up. Not even McCarty, he simply voted no and voiced some concerns at the meeting but to the public eye it seems like that is ALL he did.

And finally to all of you and to “VoiceofReason” – yes, there are MANY Sacramentans who support the new complex and love Sacramento, just because you do not agree with it does not mean that statement is wrong. If you didn’t notice, there was quite a large grassroots movement that helped mobilize this entire process. And no it wasn’t a bunch of sports hooligans, there were businesses and organizations rallying together as well. If there are so many of you against this- where were you? Where was your grassroots movement? Where was your mobilization? Fickle comments and arguing over the term “many Sacramentans” on a reply thread to a news article just won’t cut it if you oppose it that badly…

I openly said in my original comment, this is certainly a risk and I am definitely worried- but I see this as a huge potential plus for the City. In this world, marketing and image is everything. This story of the ESC deal so far has created an incredible image of Sacramento, something that makes our City an attractive destination for people to want to live. Typically when people want to live here that means they want to work here, companies typically want to go to places where people want to live and work. People living and working here means they are spending and paying taxes here.

This is bigger than basketball, this is to put Sacramento on the NATIONAL map as a great place to live. Places like Austin, TX are comparable cities- also a state capitol, with a university that has a team that gets national recognition, and multiple large entertainment events that attracts millions to the city such as SXSW, Austin City Limits, and so forth. Without these Entertainment and Sports attractions, people around the nation and even around the world would not know about how great and beautiful Austin is.

I too am a concerned citizen, but I also feel that we need to see the City step up and start making actual commitments to bettering the City rather than just talking about it.

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Callevi

March 9, 2012 | 10:49 PM

Sacres

McCarty is part of the soluion. But, what problem needs a solution?

If you answer, how do we build a sports complex, I argue that your attitude is the problem that needs a solution. To point out inequities of a legislative proclamation (without a vote of the public I may add), should be applauded, not condemned as 'poo-pooing'.

Whats best for the city of Sacramento is the puzzle that needs a solution and this just may not include an expensive building and the leverage of our steady income stream. Haste before waste.

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advocate

March 11, 2012 | 11:36 AM

Quote from jeffeff " existing customer base -- the Rosevillians, Rocklinites, Elk Grovers, etc." Now if we could just get these guys to put their money where their mouths are and share in the risk, we might have a fair deal. BUT they're never going to do that. They want Sac city taxpayers to pay the costs.

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evak

March 11, 2012 | 3:42 PM

I think that what McCarty is saying is actually quite simple. The arena could well become Sacramento's Astrodome (which Houston had to demolish in 2010) and in the meanwhile, we will be risking a whole year's income on what is at best a 50/50 chance that we will break even. How many of us would risk a year's income on a coin toss? Well, the folks who are supposed to represent us did just that. In light of this, I wonder if it makes sense to form an association of neighborhood associations to fund our priorities? Look, Sacramentans repeatedly voted down an arena--in good times and bad. And not by a small margin either, by 4-1. So an arena is not a priority for us. Clearly it isn't. We want police, fire, schools, pools, sewer, libraries and parks. All the things that the City Council has decided are not a priority for them. So maybe the neighborhood associations ought to ban together, apply for grants, and fund Sacramento's priorities. If City staffers want to come to our meetings and have something to contribute, we will invite them. If not, they can work on their priority: the arena and leave the city to us. Maybe it's time for that....

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sacresident515

March 12, 2012 | 9:55 AM

The Astrodome is not even comparable to the new ESC... it was built in 1965, and lost it's major tenants when a the Reliant Stadium was built next door to house the NFL Texans. If anything, Power Balance is headed in the same direction as the Astrodome - there is NO WAY the Texans would have gone to Houston if that were their stadium. IN FACT the Houston Oilers LEFT Houston because the Mayor there shot down the Oilers request for an updated statidum. And the support in the area for the Oilers was gone - unlike here in Sacramento where we rallied to help KEEP the Kings here. The Houston Oilers LEFT Houseon because they did exactly the OPPOSITE of what Sacramento has done with teh Kings.

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Kenneth Miller

edited on March 11, 2012 | 9:10 PM

While I wholeheartedly agree with all of councilmember McCarty's points, I have to cede that at the end of the day keeping the Kings in Sacramento and providing a modern venue for entertainment located close to the city's center is essential for the long-term growth and prosperity of the city. Is the city broke? Yes. Have we laid-off essential city workers? Yes. Are public services closing left and right? Yes. So, why then should we invest our money in this seemingly foolish manner? Sadly, it's because our hand was forced by the those ass-hat Maloofs. At the end of the day it's all about timing. At some point in the near future, within the next 5-10 years, the economy will have recovered, the city will have the revenue it needs for public workers and services, and most of the financial gripes we have been dealing with for the past 5 years will become the stuff of memories. These are all short-term problems in the big scheme of things. That said, if we were to lose the Kings we may not have another major-4 pro sports team in Sacramento for several decades. I'm a 31 year old Sacramento native who has been to 2 Kings games in his entire life and has never sat through a basketball game on T.V. (more of a football fan - go Niners!) - but I still see the immense value in having a pro basketball team here in my home city. As much as I hate having my hand forced in these difficult times, losing the Kings would have been traumatic for a city that has been hit hard by the recession. At what cost and risk? High on both accounts to be sure - but I believe history will be kind to the decision. Also, pretty excited about being able to ride the bike trail to the arena...assuming they will be adding a little extension.

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evak

March 11, 2012 | 10:48 PM

@Kenneth: If arenas actually brought jobs, I would be inclined to agree. But research and cities' experience shows just the opposite is true. Sports in the US is bigger than life; it's glamorous and that (not economics) is the real reason the insiders at City Hall want arenas. They want the glamour. Here's a quick math for you. At 3% interest, the City will need to pay the lender 11.7M per year. On top of that, the City will need to backfill a $9M lost through parking revenues. Reading through the term sheet, you see that the City has identified $2.7M that it can use to backfill. So.. what about the other $18M? And never mind the structural $26M per year deficit we're expecting to suffer for the next 5 years. That's why this was a bad deal for Sacramento. As for losing the Kings--it's extremely rare for sports teams to move. Anaheim? The Kings (who aren't doing so well) would have to compete for air-time with teams much better situated than they. Seattle? Maloofs would have to sell. So (IMO) neither of those would have really happened but as a tried and true pressure tactic it worked great--for everyone involved except us, Sacramentans.

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sacresident515

March 12, 2012 | 10:04 AM

Evak- first of all, you just tried to compare the Astrodome to a new state of the art facility. So I already question your facts to begin with let alone your math. Bottom line is- numbers can be turned and tweaked and presented how you'd like. Instead I'm looking at the greater picture, and seeing how companies like Facebook are putting buildlings in cities like Austin, TX. How the stadium for the SF Giants turned a very industrial (much like the landscape of Alkali Flats for example) into a flourishing area of SF. I want that for our downtown. -I do however agree that there were indeed pressure and scare tactics from the Maloofs but if that's what it takes, so be it, I'd rather see the City get their rears moving on a project rather than sitting around and talking about it for decades on our taxpaying tabs!

Secondly, to Kenneth - I feel your pain, I wish we weren't cornered to making this move now, but if we don't we lose a huge part of our regional marketing value- and every single sucessful product and City that has appeal out there has immense marketing and advertising value. My only disagreement is that it wasn't entirely the Maloofs fault we were forced to at this time (albeit I do have your same sentiment towards them!) The City and all of us saw this coming, a decision -if any- to finally commit to a long-term project like this would not happen until we absolutely had to, in good times or bad.

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JimMichael

March 12, 2012 | 12:11 PM

The SF stadium was built with all private dollars. And Austin doesn't have a stadium other than the University of Texas' football stadium.

I don't get why folks are mad at McCarty for asking questions and withholding his support until we're clear on the financial impacts of the arena deal.

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sacresident515

March 14, 2012 | 3:41 PM

Jim Michael- you are correct in both counts but that was not the purpose of mentioning both.

SF stadium turned area around. I hope to see the same downtown.

Austin has huge draw because of their many ENTERTAINMENT events - that city would not be on the map of places to go, and places to be, without the appeal they've created. -I feel Sacramento has this potential.

And I am with you- I don't get why they're mad for questioning and being concerned. I think what upset supporters of ESC was the fact that had the council had 5 "no" votes it would've stopped all potential ESC items dead in its tracks and the NBA and nation would have checked out immediately. Harsh, but true. I think every but the Mayor had their reserved "yes" votes because they do want to strike a balance between being progressive and getting something exciting like this going without losing sight of what is important.

Only time will tell how this will truly pan out.

In the mean time, Sacramento rallying together and showing optismism is what the City needs through everything to come out ahead.

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Thomas Wendel

March 13, 2012 | 10:38 AM

If you want a city to thrive, overinvesting public funds in major sports venues has a track record of not working. On the other hand, public safety, schools, parks, and transportation infrastructure will create an environment where a city becomes a place that people want to live. Opportunities for business success and public revenue will follow.

"Build it and they will come" is a failed strategy. Creating safe, stable, diverse, and sustainable neighborhoods within the city will make it a desirable place to work and do business. It might even create a city that's economically successful enough to be able to blow public funds on a sports arena, but you have to put the horse in front of the cart.

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RogerJones

March 14, 2012 | 6:21 PM

I support Kevin's decision. I used to be a bond analyst for the State of Illinois. Sports facilities financed by government subsidies and municipal bonds are a bad investment. If you are a free-market person, you should oppose this because it's socializing the costs of a business enterprise. If you are a pro-government liberal or just one of the 99% (i.e., you need to work to pay for your housing and food), then why would you support using public funds to help millionaires become richer. This money would be better invested in small arts venues in the city or in after-school arts and recreation programs.

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