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Mayor: Arena ‘plan B’ on hold until after city budget is resolved

by Melissa Corker, published on May 8, 2012 at 6:42 PM

Storyline: Politics

Community Tags aeg arena basketball budget business city council community dangberg entertainment and sports complex mayor kevin johnson nba parking politics sacramento kings Sports

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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.

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Rhonda Erwin

edited on May 8, 2012 | 8:03 PM

what the heck?? "Meanwhile, the city’s budget, including a $15 million shortfall, is the priority now, Johnson said." For Petes Sake. The city budget should have been a priority prior to Johnson's strong mayor proposal"S" and the Arena. How much sense does it make to claim you need the arena to get jobs for the community and the city is laying off city employees since Johnson has been in office looking at more power and a new arena. What the heck seems the new arena wouldn’t have been giving new jobs to the unemployed but heck perhaps it could of gave jobs to those city workers laid off during the city budget which wasn’t a priority for Johnson. Are we recycling jobs/ recycling city employees instead of creating new jobs for the communality unemployed before city budget lay offs. Every time Johnson alleged the arena would give us jobs I wondered does he even see the city is laying off workers each budget term? The efforts were self absorbed and unacceptable. Heck, Arco arena, just like the city of Sacramento, has been laying off workers for years I don’t see how a new arena would have kept people employed.

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lilcuci

May 8, 2012 | 9:09 PM

Give any business who is willing to relocate downtown an incentive, this in turn should spur tax revenue.

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Lisa Ouellette

May 8, 2012 | 9:48 PM

What kind of incentive?

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William Burg

May 8, 2012 | 10:39 PM

Prediction: Any deal not involving keeping the Kings out of southern California for the next 30 years is not a deal AEG will be interested in.

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P W

May 9, 2012 | 6:06 AM

Of all the cities I've lived in, never has there been one with such an identity crisis as Sacramento. We don't know, or can't decide, if we're a "major league" city, an arts city or what. There seems to be little in the way of continuity in terms of culture. Land Park to Natomas to Oak Park to Tahoe Park to Midtown. All have their own, distinct identities (which aint necessarily a bad thing) but with no apparent common link to the city-at-large. What Is Sacramento? WHO is Sacramento? Does the fact that we're the capital of the state have something to do with it? Having lived in Denver for many years, that didn't seem to affect the over-all identity of the town...in fact, it was more of a sub-culture rather than the primary component of Denver's DNA. Just an observation.

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JWS

May 9, 2012 | 8:00 AM

It's a bit off topic but an interesting comment. Sacramento is indeed a fragmented metropolis with a split personally. Cities like Denver and Portland are their state's largest city so they draw in their state's best and brightest. The problem we have here is that San Francisco and the Bay Area have such an overwhelming gravitational force that it draws the creativity, talent and money away from Sacramento. And it's a process that's been going on since the Gold Rush days.

But the biggest problem we have is a genuine resistance by many to accept the dichotomy that is Sacramento. Unlike cities like San Francisco, the majority of Sacramentans live in the suburbs. As such we have a more suburban 'culture'. Suburbanites here tend to dismiss the original city (it's all downtown to them) and many refuse to accept that Sacramento can be or should be a dynamic 'real city'. Or they just don't care. Why bother when they can just go to San Francisco for their weekend 'city fix'? Some of this is generational and many younger people would live 'downtown' if that were a viable option here as it is elsewhere.

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Curmudgeon

edited on May 9, 2012 | 9:04 AM

What makes Sacramento unusual among California counties is the amount of unincorporated urbanized area in it, something that only began to change with the incorporation of Citrus Heights (1997), Elk Grove (2001) and Rancho Cordova (2003). But those are still separate cities, not "Sacramento".

A distinct unwillingness of the people running Sacramento to accept the growth that was clearly on the way in the 1950's, led to Sacramento being hemmed in on all sides, save North Natomas, by other communities. Had Sacramento City proper thrown out its boundaries and annexed all the growth that occurred, like San Jose in Santa Clara County, Sacramento City proper would have the clout it needs for its bigger city ambitions.

Whoever was running Sacramento proper in the 1950's and 1960's refused to throw the city boundaries out and annex the growth that the county government and surrounding counties like Placer were approving anyway. Very foolish of them. Rather than becoming the "Colossus of the Region" that could have had the power and clout to have goodies like stadiums with ease, Sacramento proper can now only hope for "first among equals" in this region at best. Heck, I wouldn't be surprised if Elk Grove and Rancho Cordova, which have the LAFCO in their favor, could even overtake Sac proper in population one day.

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JWS

May 9, 2012 | 9:21 AM

Are you forgeting that Los Angeles County has or at least used to have a lot of unincorpoated urbanized areas? I don't know how unique we are in that regard but if your point is that greater population generally equates to greater political clout I agree. Still, I am pretty sure that most people today understand that the old-fashioned San Jose-Phoenix-Los Angeles model of growth by ever-increasing low-density suburbs has not produced better cities. We need to grow up not out.

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Curmudgeon

May 9, 2012 | 9:25 AM

And in time, San Jose has begun to do just that. But first, the clout of a large city must come. If San Jose had not thrown out its city limits, it would be just another little California suburb. Sometimes little burbs manage to do mighty stadium things like Anaheim, but they are at the mercy of a big mucky muck like we are with the Maloofs. Their mucky mucks just happen to be benevolent.

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JWS

May 9, 2012 | 10:12 AM

Well both Portland, OR and Vancouver, BC have proved that you don't have to follow that model to become a successful and prosperous city. BTW San Jose was a thriving county hub long before it became the epitome of post-WWII California suburban sprawl so it was never going to be just another little California suburb. I don't know anyone who seriously looks to that town for guidance about how to create a great city. San Jose and many other cities are now trying to duplicate the success of cities like Vancouver. The funny thing is that Vancouver achieved it's success by doing the exact opposite of what you are proposing.

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Curmudgeon

edited on May 16, 2012 | 11:49 AM

What are you talking about? I know of no other major city, or unincorporated urban area for that matter, of any size in Multnomah County, Oregon (735,334 as of 2010), besides Portland (583,776). Do you?

Not so for Sacramento County (1,418,788) of which fewer than one-third live in Sac City proper (470,956). The facts remain: almost always, for a US city to have the clout for a stadium like goodie, it must dominate its own county, and ideally the counties around it.

As for San Jose, had it not thrown its boundaries out to annex all the growth, it would have been a hemmed in little old city in an Orange County North, without even the Disneyland or Knott's Berry Farm that gives Anaheim the entertainment clout it has to support a stadium. In such a hypothetical situation, San Jose would be a nothing. In fact, it would be politically even more pathetic than Sacramento City proper is within Sacramento County.

Vancouver? Is it hemmed in by more thriving cities? Really? To say nothing of the apples-and-oranges comparison of US City/County governance with Canadian provinical governnance.

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William Burg

May 9, 2012 | 1:03 PM

JWS: I assume by your mention of "Fragmented Metropolis" that you are familiar with the history of Los Angeles by Robert Fogelson of the same name. There are plenty of parallels between the history of Los Angeles and the city of Sacramento--in fact, there is an "LA School of Urbanism" that describes Los Angeles as a model for urban history in the postwar United States. Viewed from the lens of Los Angeles, Sacramento's urban growth makes a lot more sense--especially when compared to Reyner Banham's "The Architecture Of The Four Ecologies," which described Los Angeles' downtown as completely irrelevant to the city of Los Angeles (at least when it was published.) And having seen Pershing Square on a Sunday morning, I'd say that Chavez Plaza is in pretty good shape by comparison.

Curmudgeon: Sacramento DID expand its city limits! According to my 1952 city directory, the city of Sacramento's total area was 17.2 square miles (an expansion from its original 1849 area of 4 square miles.) Today, the city occupies 98 square miles. During the period you're describing we absorbed the city of North Sacramento as well as a lot of surrounding farmland.

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Curmudgeon

edited on May 9, 2012 | 1:28 PM

So Sacramento expanded its city limits? Not well or fast enough! "Un-City" land still, I think, exceeds Sac City proper in population, although recent incorporations have substantially reduced it.

The model for clout is San Jose, which annexed almost everything urbanized in Santa Clara County that Sunnyvale and Santa Clara didn't take.

In general, Un-City land has the worst of both worlds, an unresponsive and unwieldy local government without the rural rustic lack of need for same.

What should happen? Sac City proper should annex, as they have already studied:
--Freeport
--that "spike" of Fruitridge / Florin that sticks like a dagger into Sac City proper as it is, and everything suburbanized to the south / southeast that isn't Elk Grove
--an odd "spike" of land that also sticks like a dagger between North Natomas and Robla
--Rosemont
--Arden Arcade (they had their chance to be a city in their own right and they blew it)

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William Burg

May 9, 2012 | 5:36 PM

An increase in city size of 500% is nothing to sneeze at. Sure, they could have annexed more, and there is a value to annexing some more, but your earlier post suggested that the city didn't grow at all, which was completely untrue. While we agree about the downsides of the "Uncity," it isn't necessarily easy (or smart) to simply annex neighboring areas, as they all come with consequences and baggage. Heck, the city is still trying to deal with the neighborhoods of North Sacramento, and we annexed them in the 1960s.

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P W

May 10, 2012 | 7:50 AM

Sorry that my comment took the story off-topic - however - after reading ALL of the above replies, I have to say I'm impressed with this group of passionate, well-informed (if not exactly harmonious!) people. I believe that those who bother to learn their city's history in the first place are in the best position to help shape its future. Thank you, gentlemen, for your thoughtful and provocative comments (and to SacPress for providing the forum in which to do so)!

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William Burg

May 10, 2012 | 1:46 PM

Our identity as a city of distinct neighborhoods is part of our culture--and hardly uncommon in the cities that exploded in the postwar era, primarily Southwestern ones, where growth went outward instead of upward. Politics and government is a bigger component of city life here than in Denver because California has eight times the population of Colorado and almost twice the size, plus other intervening factors like international borders and a massive coastline. A bigger, busier state requires a big, busy state government, although we're still 49th out of 50 states in per capita state employees. Governing 40 million people and a $2 trillion economy takes a lot of people--which means that Sacramento is much more focused on the business of being a state capital than Denver.

What does this have to do with an arena? Not a darn thing. Neither does an arena have a darn thing to do with our identity as a city.

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evak

May 10, 2012 | 3:05 PM

According to Dave Butler, we're not focused anywhere near enough on the business of being a state capital:

Dave Butler, president of the nonprofit Linking Education & Economic Development, is one of them. He is challenging educators, the private sector and local government to develop a capital cluster in the same way the region has promoted green technology. If we do that, he says, numerous industries could be the beneficiary of a financial upswing, particularly hospitality.

“We host all these conventions, fly-ins, events and related businesses,” he says. “They’re basically all small enterprises that need office space, and they have payrolls and they all buy stuff, whether it’s paper or services or food. Yet we view the state government as an occupying force, not as any part of our economic engine. We have this disdainful view. We all like going to Washington, D.C., because it’s cool and exciting, but we are the Washington of the West Coast. Why don’t we embrace that? Why don’t we parlay that into more economic activity?”

http://www.comstocksmag.com/Archive/0611_F_Party-Planning.aspx

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William Burg

May 10, 2012 | 3:13 PM

True enough--the main thing stopping us from pursuing that route are all the "government is the problem" types making disdainful comments about slow-witted, cowlike state employees (even though state employees tend to be more highly educated than the private sector workforce) and the suburban developers stuck in the Victorian mindset that claims cities should shut down after 5 PM and everyone should flee for the suburbs and the mall as soon as the office closes, aside from official uses like sports stadia that people pay to attend--and God forbid anyone actually live there!

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evak

May 11, 2012 | 10:20 AM

Even if you're not fond of state wrokers, one would think that you would want to have more people spending $737,000 per day in your city. ($737,000 per day is how much lobbying firms spend per day on "stuff" like hotels, car rentals, gifts, restaurants, etc. when they're in town for conventions and the like.) Instead we're caught up in these grandiose schemes that might make the city some money (if financed properly) but will not bring in more people who spend almost 1,000,000 per day. And OK, i get that when you say "lobbying" that's not popular either. So how about "Microsoft, Google, etc. representatives"--better?. In any event, IMO we need more of these "representatives" to hold their conventions in Sacramento. It's the natural place for them to hold their conventions after all but for a whole host of reasons mentioned in the article (not enough hotel space or convention space are just two examples) we are losing too many of them to San Jose, San Francisco, even LA. Why don't we make more of an effort to get them to come here? I just don't get that.

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Mark

May 11, 2012 | 2:30 PM

I don't know of anyone here that views the state government as an occupying force, nor anyone who doesn't acknowledge it's important role in our local economy. Nonetheless, that doesn't stop idiologs from having a disdainful view of government and state workers. And while Sacramento may be the DC of Cali, Sacramento will never will enjoy the same status as Washington DC does unless California secedes from the Union and becomes an independent nation. All this talk about what we should do misses the point IMHO. Californians are typically more devoted to their particular region than they are to the state as a whole which might explain why they don't take a great interest in what happens in Sacramento. For the most part people in San Francisco and Los Angeles tend to be prejudiced against Sacramento -both as a symbol of whatever they don't like with state government and as a boring and embarrassingly provincial capitol suck in the middle of the distinctly un-cool Central Valley. Even if we are not like, say Denver, the state's premier city, that doesn't mean we have to live up to our reputation. Its taken a few generations but I think Sacramento is finally ready to come into it's own.

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kingsfan1964

May 30, 2012 | 7:41 PM

wow i really have learned alot from this conversation. most of this pro or con i did not know about, and i grew up in sacramento. actually born and raised. thank you for your posts like these, gives me hope for the future of our species. still hate the maloofs though.

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