Arena

Arena bus tour rolls out to region

2011-07-15T01:15:02Z

The arena campaign committee, Think BIG Sacramento, hosted a four-county bus tour Thursday to spread the message that a new sports and entertainment facility will benefit not just the city of Sacramento but the entire region.

The group released a "Capitol Corridor Impact Report" showing 55 percent of the people going to basketball games and other events at the Sacramento Kings' current facility come from outside Sacramento County. And almost 75 percent live outside the city, committee Executive Director Chris Lehane said Thursday at a press conference in El Dorado Hills.

The report was compiled using three years' statistics from the National Basketball Association. Actual numbers of arena customers weren't provided, Lehane said.

In addition, new funding concepts are being considered by the group’s finance committee. One might tie agreements for corporate sponsorships, ads and luxury seats with contracts for those businesses to sell regional products such as wine, fruit or nuts at the facility, committee member Kevin Nagle said.

"Remember to 'Think BIG,' buy regional and fight on so we can make this a reality," said Nagle, president of Ohio-based Envision Pharmaceutical Services, which has a location in El Dorado Hills.

The press conference was held in front of the tour bus, pulled up outside the El Dorado Hills Chamber of Commerce in the El Dorado Hills Town Center. Thursday morning, about 30 people took the black limo bus from the Kings arena, Power Balance Pavilion, in Natomas to El Dorado Hills.

The group was made up of Lehane and one other Think BIG member, Kings sponsors, community and business leaders, Mayor Kevin Johnson's staff, a Maloof Sports and Entertainment employee, Kings dance team members and two new members of the committee's citizens' initiative, dubbed "citizen architects."

The figures provided in the report show many people who live outside Sacramento would benefit from a new arena. People living outside the city are also expected to get a large share of the 3,700 construction jobs that would be created, because local construction companies will be used, Lehane said.

Power Balance Pavilion draws about 55 percent of its customers from 15 counties outside Sacramento County.

About 29 percent live in the other five counties in the six-county region. However, a large number come from elsewhere in Northern California. Residents of San Joaquin, Solano, Stanislaus and Contra Costa counties make up 22 percent of the people at games and other events, according to the report.

Johnson and other elected officials, as well as arena campaign committee members, believe more people will be drawn from outside the region if a new arena with more plush facilities is built, Lehane said.

A ticket fee is being considered as one of many options to help fund the arena through a combination of public and private investment, Nagle and Lehane said.

One of the newest ideas is to showcase products and services from businesses located throughout the region at the new arena in exchange for financial support. That financial support might be given by businesses that advertise or become corporate sponsors at the new arena, or that buy club seats or luxury suites, Nagle said.

Arena contracts for products and services could lead to more jobs throughout the area, he said.

Lehane described Nagle as a "key" member of the arena campaign committee – someone who stepped up to offer financial support to keep the Kings in Sacramento at the start of the effort last winter, when Johnson went before the NBA. Nagle was one of the first to view a new arena as a regional asset, and he has encouraged community support at arena meetings, Lehane said.

“Not only has he talked the talk. He has walked the walk,” Lehane added. “This is someone who, in and of himself, has helped make a huge difference in this effort. (He) and the mayor have run a pretty good two-man game over the course of this process."

Two people on the bus were "citizen architect" Troy Bedal and his 8-year-old daughter, Saraya. The Roseville residents were celebrating birthdays Thursday.

A Sports Authority store manager, Bedal said he's been a Kings fan since birth 30 years ago. His parents were Kings fans who watched games on TV and took him to his first game at Arco Arena when he was just 6 or 7. He talks about the need for a new arena to friends and coworkers all the time, he said.

City officials have initiated an effort to integrate plans for a new arena with an adjacent future regional transit center.

The bus later stopped at a construction site at UC Davis, the Fountains at Roseville shopping center and Vision Service Providers in Rancho Cordova. A town hall meeting was held there late Thursday afternoon.

The arena campaign committee will hold more meetings, a design contest and a town hall meeting in Natomas later this summer to continue reaching out to people about the impact an arena could have throughout the area, Lehane said.

“At the end of the day, it’s obviously critical to keep the Kings in Sacramento because they are a lynchpin to hopefully being able to develop this facility,” he said. “But this has always been much more than just about a single professional basketball team or a single professional sports franchise. This has been about an economic opportunity to transform the region.”

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

City officials merging plans for arena, transit center

2011-07-14T01:22:16Z

Sacramento officials believe a new arena can be integrated with a future regional transit center in the historic downtown railyards – making this one of the country's most eco-friendly sports and entertainment facilities, Assistant City Manager John Dangberg said Tuesday.

At Tuesday night's City Council meeting, Dangberg gave council members a status report nearly halfway into a 100-day technical review of a proposed arena. The $387 million project is on an expedited schedule to be in operation by May 2015.

One of the most critical issues being reviewed is the need to coordinate construction of an arena with the previously planned transit center. Both structures would be built on a site constrained by railroad tracks to the north, the freeway to the west, I Street to the south and downtown buildings to the east.

Building two "very intense pieces of infrastructure" on the 33-acre site poses challenges, partly because they are both so big, Dangberg said.

"We believe we can integrate these two," he said. "If and when we successfully do that, we have the opportunity to create one of the most sustainable, green, interesting entertainment and sports facilities in the country, if we can successfully integrate these uses and have transit right there at the facility and many modes of transit right there," Dangberg said.

The city has set up technical review teams that are focused on the site itself. The teams are looking at transportation and transit issues, community development issues, economic development and how to reuse the Power Balance Pavilion site.

A town hall meeting on the future of the Natomas site is scheduled for Aug. 11, at a time and place to be announced.

Mayor Kevin Johnson's office and his arena committee, Think BIG Sacramento, are working on financing options with support from a consultant, Barrett Sports Group, and a finance team made up of staff from the city treasurer's office and Goldman Sachs.

The city is also looking at urban design issues with the goal of preserving and playing up historic assets at the site, such as the Sacramento Valley Station historic train depot, the Railway Express Agency Building and the historic Southern Pacific Railroad central shops.

City staff wants to create a legacy project that uses urban design elements to connect to those assets and new opportunities for downtown revitalization, he said.

"We have a very, very rich history on the site as the terminus of the Transcontinental (Railroad). And we need to treat it in a very special way that creates a development that is uniquely Sacramento and distinctly Sacramento," Dangberg said.

"It is not another disposable arena that we see in so many cities, but something that will be here for many, many decades or a hundred years as our central shops have remained in place and really a permanent part of our urban fabric and history,” he added.

For example, city staff wants to keep key site lines between the central shops and the depot and take other steps to ensure historical compatibility throughout the project, he added.

A downtown location without a large addition of surface parking on-site will allow the city and businesses to create a "street-to-seat" experience. By using existing parking located away from the site, people will see restaurants, bars, shops and establishments with entertainment on their way to the facility. This would provide more opportunities to stay downtown before and after games and other events. This is expected to help revitalize and activate downtown, a key element of the project, he said.

"If we don't achieve that with the amount of investment that we're putting into this, we might as well not bother putting it in the downtown," Dangberg said.

City staff will present the 100-day technical review on Sept. 13, rather than Sept. 6, because of the Labor Day holiday.

At that time, staff will discuss predevelopment costs the city will incur and provide a critical path and preliminary schedule to the City Council. Dangberg also has been talking with the city attorney about the process to select a development team. Think BIG Sacramento will provide a list of financing options.

Johnson's chief of staff, Kunal Merchant, gave a presentation on the mayor's arena committee, Think BIG Sacramento, and an update on the group's work.

Think BIG Sacramento is a 72-person committee brought together to facilitate arena development before the National Basketball Association's March 1, 2012, deadline for teams to file for relocation next year, he said.

An estimated 3,700 temporary construction jobs and 400 jobs for facility operation are expected to be created by the project, he said.

However, Sacramento resident Mac Worthy, one of two people who provided public comments on the issue at City Hall Tuesday, called into question the number of jobs the project would bring and predicted civil unrest if more people don't get jobs and improve their living conditions soon.

"We need jobs here. This thing ain't going to give us no jobs," he said. "The next two years (are) going to be the critical part, here…. Wake up, people. People (are) tired of being down, without a roof over their head, without enough money to go to the grocery store and buy food, can't even buy gas."

Think BIG Sacramento will host a four-county bus tour and town hall meeting Thursday to tell regional residents about the possible benefits of a new arena. A "Capitol Corridor Impact Report" will also be released.

The tour will start at 10 a.m. at the California Welcome Center, 2085 Vine St. in El Dorado Hills, then make stops in Davis and Roseville. A town hall meeting at 3:30 p.m. at Vision Service Plan, 3333 Quality Drive in Rancho Cordova, will be the last stop, according to a press advisory sent out Wednesday afternoon.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Arena committee kicks off community rallying effort

2011-07-08T01:18:21Z

Think BIG Sacramento launched an effort Thursday to recruit 1,000 people from Merced to Redding to rally support for a new arena.

The arena campaign committee also announced plans to hold a public design contest for a space adjacent to the new facility as part of that effort.

The committee is asking regional residents and community leaders to help spread information and gather supporters for the drive to build a new sports and entertainment complex, state Senate staffer Greg Hayes, a member of the arena committee, said in a Thursday morning press conference outside the MARRS Building at 1050 20th St.

Later this month, the committee will announce full details of a contest that could enable the winner to design something for an open, public space adjacent to the new arena.

Those who volunteer to rally support will be dubbed "citizen architects" for their role in helping to construct a new arena to replace Power Balance Pavilion, Hayes added.

"It is their support and momentum that has been built that will make this new sports and entertainment complex a reality," he said. "Ultimately, this sports and entertainment complex is, in effect, the civic center for this region – a gathering place for events, meetings and conventions."

During the press conference, Sports 1140 KHTK host "Carmichael Dave" Weiglein, also an arena committee member, applauded the mayor, his staff and the committee for listening to Kings fans' "grassroots efforts" to support an arena and allowing input from the community.

"These promises are being fulfilled, and the trust that is so difficult sometimes to have between citizens and city leaders that was given out in the last few months – that trust is absolutely being backed up by the actions and also the listening to the counsel of the grassroots efforts," Weiglein said.

The committee created by Sacramento Mayor Kevin Johnson wants to attract a diverse group from throughout the six-county region to be part of the citizens' initiative. The deadline to apply online is 5 p.m. July 18. People began signing up on the Think BIG Sacramento website before the announcement, said Hayes, communications director for state Sen. Kevin de León.

Kings fans and others have approached Weiglein to ask how they can support a new facility for National Basketball Association games, concerts, ice skating shows and other events. The citizens' group will be a "fantastic conduit" for people to get involved in a project that will make the area a better place to live, Weiglein said.

"It's something that just expands on the quality of life in this lovely city, (and) it's very difficult to put a dollar amount on," he said.

The NBA and the Maloofs, who own a majority share of the Kings, have given the region until March 1 to undertake a serious effort to build a new arena.

Hayes said residents' most important contribution would be to take part in a design competition, which the committee believes has never been used at another sports or entertainment facility in the country.

Details haven't been fully worked out. However, the contest will be open to everyone, including residents, architects and artists, when it’s officially announced near the end of July.

The committee will ask participants to design some type of feature in an open space set aside next to the arena. Residents will then vote on three design ideas.

Just what that component will be – public art or something else – will be up to participants, Hayes said.

"This truly must be reflective of what the people in this region decide, because this movement was really born out of the grassroots, and as Dave said, it got the leaders' attention," he said.

Report: Arena could bring $7 billion

2011-07-01T00:43:32Z

A new downtown arena could draw 3.1 million visitors to the central city each year and bring the region more than $7 billion over 30 years, according to a report released Thursday by an arena campaign committee.

The 37-page report on an arena’s expected impact to the region was released to reporters at a press conference at the Sheraton Grand Sacramento Hotel.

"In downtown Sacramento, there's a considerable economic boost, just by the fact that there really isn't a facility like that," said Cathleen Dominico, author of "The Economic Engine Report: An Economic Analysis on the Regional Impact of an Entertainment and Sports Complex," during the press conference.

"If you can create a downtown core that is a destination, it boosts not only the downtown itself but trickles out to the outlying regions," she added.

Dominico, managing partner at Capitol Public Finance Group, was joined at the press conference by arena committee Chairman Chris Lehane, who also chaired the mayor's arena task force; committee members who included City Councilman Rob Fong, City Councilwoman Angelique Ashby, state assemblymen Roger Dickinson and Richard Pan, Downtown Sacramento Partnership Executive Director Michael Ault; and past DSP Chairman Kipp Blewett of Rubicon Partners.

The press conference was held after a report summary was first presented to members of Sacramento Mayor Kevin Johnson's arena campaign committee in a closed-door meeting at the hotel. The meeting was announced two weeks ago as one of seven public meetings set this summer for the committee.

The number of visitors was estimated with an average 17,300 people attending 45 Sacramento Kings events and an average 15,000 people at more than 155 other events annually.

Visitors would be expected to spend an average of $20 each, before and after events, on food, drinks, travel and other retail. About 10 percent of them could spend another $102 to stay overnight.

Total spending outside the sports facility, before and after games and other events, was estimated at $93.6 million annually, according to the economic impact report called for by Johnson.

However, after subtracting spending by existing residents and annual spending at the Kings' current arena, net annual spending in the six-county Sacramento region is expected to total only about $24.6 million, according to Dominico and the report.

The arena's operating costs would be covered by revenue generated inside the arena, according to the report, which did not look at arena revenue.

ICON Venue Group President Tim Romani and Sacramento developer David Taylor estimate an arena facility would cost $241 million, with a total project cost of $387 million.

The cost of arena construction will be financed by a combination of public and private investment, which is expected to include Sacramento Kings annual tenant fees.

The ICON-Taylor group is developing an arena financing plan with input from Johnson's 70-member regional arena campaign committe e. The group was introduced a month ago as the Here We Build coalition. The committee's name was changed this week to Think BIG Sacramento.

The ICON-Taylor group was given a late-May deadline to present an arena financing plan to the Sacramento City Council. But that didn’t happen after the Kings’ owners didn’t provide revenue information in time.

The arena campaign committee was then given until Sept. 8 to provide the council with a plan.

The Maloof family, which owns a majority share of the Kings, agreed on May 2 not to move the team if the region would undertake a serious effort to replace Power Balance Pavilion, which was constructed in outlying Natomas in 1988. The National Basketball Association and the Maloofs gave the region until March 1, 2012, to do so.

The drive to build a new arena also creates an opportunity to redevelop the existing arena, Ault said.

"We feel very strongly that this is not about a downtown versus Natomas issue," Ault said. "This is about an opportunity to activate and engage the central city. It's an opportunity to make sure that we're doing everything we can to develop something that is a replacement in Natomas that keeps them whole.

"This is something I think the region will look back on as we finally are having the right discussions and the right opportunity to really engage in a facility that's going to make a difference in this region," he said.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Arena coalition studies financing options

2011-06-17T02:06:56Z

The Sacramento region will have to get creative to come up with a public-private financing plan that might work to build a new arena – possibly coming up with funding sources never tried in other cities before, a prominent sports financing expert said Thursday.

Sacramento will need a unique financing model, partly due to the community's "limitations" in size and past efforts to gain voter support for public arena funding, Barrett Sports Group owner Dan Barrett told a crowd gathered for a town hall meeting at the Central Library.

The media market is relatively small, which makes it less lucrative, and there aren't a lot of potential corporate sponsors here. Other challenges come from difficulties getting sports facilities built in California and the lack of more than one sports team tenant for the building, he added.

A regional Here We Build arena coalition has been given until Sept. 8 to come up with a funding plan that appeals to the public and the Maloofs, the Sacramento Kings’ majority owners. The coalition held its first public meeting Thursday.

City Councilman Steve Cohn, a member of the arena coalition, asked whether any successful financing models have been used to build new sports facilities since the recession began.

"There's no cookie-cutter model, unfortunately. You've got to be real creative, particularly in California," Barrett said.

Barrett did not share what new options are being considered. It's "too early in the process" to say what even some of those might be, he said.

The coalition will be working with sports facility gurus, city staff, Mayor Kevin Johnson's arena task force finance subcommittee, the ICON-Taylor Group, the Maloofs and others. At least 65 coalition members and others from the community turned out for the presentation.

Their work follows on the heels of the ICON-Taylor Group, which was given until late May to present financing options as part of a feasibility study. The group told the Sacramento City Council May 26 that it had not been able to include financing in the analysis after the Maloofs didn't turn over financial information soon enough.

Barrett and coalition chair Chris Lehane led a meeting on public-private partnerships to fund arena construction downtown. Barrett explored a range of options that have been used to build facilities in other cities.

Public funding options that have been used include sales tax, hotel tax, rental car tax, food and beverage tax, tax increment financing, land sales, and parking revenues and surcharges.

Private funding options have included equity and cash or facility-related revenue streams such as naming rights, club seats, advertising, sponsorships and corporate investment, he said.

The Maloofs announced earlier this week they have given up controlling interest in the Palms Casino Resort in Las Vegas to private investment firms, Texas-based TPG Capital and Leonard Green & Partners. The Maloofs agreed to turn a $400 million debt into equity by giving up a controlling share in the resort, according to various sources.

The Maloofs did not respond to requests for comment.

On the East Coast, some have used EB-5 money, which trades temporary visas for the financing of American ventures by foreign investors.

Barrett said they don't know if any of those options will be viable in this region.

Broad-based tax increases haven't been used in California. Public financing for sports facilities in this state tend to be targeted taxes, such as hotel or rental car taxes, he said.

The coalition is now trying to identify public funding options that wouldn't require a vote, said former city Treasurer Tom Friery, a member of the coalition's executive committee who helped lead the town hall presentation.

Arenas and stadiums in bigger markets – the Giants' AT&T Park in San Francisco and the Lakers' Staples Center in Los Angeles – have been paid for entirely by sports team owners. That hasn't worked for smaller markets, because the teams don't see as much revenue coming in from media deals and corporate supporters once the facilities are built, Barrett said.

"It's critical to structure a deal that makes sense financially for both parties," Barrett said. "Both parties need to come away with a deal that works."

The Here We Build Coalition and Mayor Kevin Johnson's office will hold public meetings roughly every two weeks throughout the summer. Most meetings will be held at the Central Library, 828 I St., probably at 11 a.m. But exact times and locations are still being determined, according to the arena coalition and the mayor's office.

Economic Impact on Downtown : Thursday, June 30, Time and Location TBD

Regional Impact Event : Thursday, July 14, Time and Location TBD

Leveraging Existing Assets To Create Jobs : Thursday, July 28, Time and Location TBD

Town Hall: The Future of Natomas : Thursday, Aug. 11, Time and Location TBD

Job Opportunities Directly Related to the Project : Thursday, Aug. 25, Time and Location TBD

Release 100 Day Report : Thursday, Sept. 8, Time and Location TBD

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Arena coalition members named

2011-06-14T01:35:04Z

Sacramento Mayor Kevin Johnson released the names of his regional arena coalition Monday, amid hopes the Here We Build campaign will be able to figure out financing options.

But the absence of a representative of Natomas, where Power Balance Pavilion sits, raised protests from the Natomas Chamber of Commerce.

Johnson announced the members of a bipartisan, 15-member executive committee Monday morning. The remaining 45 members of the community coalition were expected to be announced Monday evening, according to the mayor’s office.

No one from the Natomas Chamber of Commerce, which has led a campaign to keep the arena there, had been asked to be part of the coalition as of 5:30 p.m. No Natomas representatives are expected to be in the coalition, Johnson spokesman Joaquin McPeek said.

Sacramento County Supervisor Phil Serna was named to the executive committee. He lives in Natomas and represents the area in his supervisor role. But he hasn’t represented Natomas economic interests in the arena process, Natomas Chamber President Ed Koop said.

"He's never been the voice of anything we've been trying to do here, as far as the economic impact,” Koop said. "In my opinion, that's not a good representation of what we've got going on here."

Frustrated chamber members are refusing to provide a letter of support for the arena effort after Johnson recently asked for one. To be asked for support is "absurd," because building a new arena downtown will "cannibalize" Natomas, said Koop, adding chamber members feel their community has been ignored throughout the arena process.

"Natomas seems to be constantly put in the back seat. We're not asked to participate in any of these things going forward," he said.

Chamber officials want the city to set up a task force to focus on reuse of the Natomas site. But no one from the mayor's office has reached out to talk about the site's future, Koop said.

"I don't believe anyone's seriously looking at what's going to happen to Natomas if this arena leaves," he said.

Johnson asked for letters of support at a regional chamber coalition meeting at Sacramento Metro Chamber headquarters on June 3 – a few days after officially announcing the coalition's formation. Representatives of all six counties were there, Koop said.

The mayor and the mayor's office followed up last week with emails asking to get the letters, which were to be addressed to the city, by June 17.

The Here We Build executive committee will be chaired by state Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, and State Sen. Ted Gaines, a Republican from Roseville.

Other members of the committee include state Assemblyman Roger Dickinson, West Sacramento Mayor Christopher Cabaldon and Sacramento City Councilman Rob Fong.

Also on the committee is San Francisco investor Darius Anderson. He told Johnson at the National Basketball Association team owners' meeting in April he and billionaire Pittsburgh Penguins co-owner Ron Burkle wanted to buy the Sacramento Kings or bring another team here if the Kings left.

The full coalition will consist of stakeholders from around the region: elected officials, labor leaders, corporate and small business owners, grassroots organization leaders, developers and religious leaders.

Johnson said in a press conference Monday that the coalition was put together to equitably represent the metropolitan area.

“We knew if we had 22 cities and six counties, we knew we had to have about 30 electeds and maybe 30 non-electeds,” he said. “So, when it came down to the executive committee, we knew we wanted 12 to 15 members – half elected, half non-elected.”

The mayor's office cast "a wider net" to involve a broad base of the community, McPeek said.

"We want to make sure we have a nice cross section, across the board," he said.

The mayor's office is setting up the arena coalition's first public meeting for Thursday. The time and location are still being determined.

The group will be meeting to explore arena funding options and determine the "critical pathway" to financing a new arena, McPeek said.

McPeek could not say what work the ICON-Taylor group is doing to come up with arena funding options, which were due at their presentation to the City Council in late May. It's not clear how the arena experts will work with regional Here We Build coalition members to answer the funding question.

The Roseville Chamber of Commerce has sent in a letter of support commending the mayor for reaching beyond his borders to promote a regional discussion on a new arena, Roseville Chamber Chief Executive Officer Wendy Gerig said.

"It's not just about the Kings and basketball. It's about economic development and the jobs that will not only go to businesses in Sacramento, but to El Dorado, Placer, Yolo, Yuba and Sutter counties," she said. "Our region is deserving of such a facility."

A link to the other coalition member names will be added in the comment section below.

Sacramento Press staff reporter Kathleen Haley contributed to this report. Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

'Here We Build' arena campaign announced

2011-06-01T00:35:54Z

A regional campaign to finance a new arena officially launched Tuesday.

A coalition called "Here We Build" will work within a tight, 100-day deadline to evaluate what kind of financing mechanisms, fees or taxes might be used. While the list of 60 leaders is still being finalized this week, the coalition is expected to meet for the first time within about two weeks.

The group will be co-chaired by state Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, and State Sen. Ted Gaines, a Republican from Roseville. Steinberg called on the region to unite behind the campaign to boost jobs, economic development and pride in the greater Sacramento area.

"It's time for everyone to get on board," he said in a press conference Tuesday. "It's time after a decade of talk and of work to finally get this done for the future of our great region."

Steinberg, Sacramento Mayor Kevin Johnson and nearly 20 supporters – including Gaines and many others who will serve in the coalition – gathered at the California State Railroad Museum to make the announcement.

The event was held in a cavernous exhibit hall with huge locomotives serving as a backdrop to symbolize the same attitude that built the first transcontinental railroad with Sacramento as the western terminus, Johnson and other speakers said.

Participants will be recruited from throughout the six-county region and represent a range of political, government and business interests on what Steinberg described as a nonpartisan issue.

"This is an issue that brings Democrats and Republicans together. That connects organized labor and business. That brings together the city of Sacramento and the six-county region – because it means something to all of us: Jobs, civic needs and sports, which brings us all together," Steinberg said.

San Francisco political strategist Chris Lehane, who co-chaired a mayoral arena task force, will serve as the entity's executive director. He'll oversee public outreach and organize community forums on the issue.

Regional supporters first gathered on the issue in April during Sacramento's effort to keep the Kings from moving to Anaheim. Those at Tuesday's press conference included Sacramento County Supervisor Phil Serna, Yolo County Supervisor Jimmie Yee, West Sacramento Mayor Christopher Cabaldon, Downtown Sacramento Partnership Executive Director Michael Ault, Pat Fong Kushida from the Sacramento Asian Chamber of Commerce, Willie Pelote of AFSCME International, arena task force co-chair Lina Fat, Sacramento City Councilman Steve Cohn and Sacramento City Councilwoman Angelique Ashby.

On May 2, the Kings' co-owners, the Maloofs, announced they would give Sacramento until next March to make real headway on an effort to build a new arena.

The coalition's task will be to determine within about three months how to fund a new arena in order to keep construction on track for a 2015 completion date presented to the City Council last week.

The coalition will need to identify revenue streams and how much of a public contribution would need to be made, while staying away from any type of general tax increase, Steinberg added later.

Its members will work with an arena development team headed by ICON Venue Group and David Taylor, the National Basketball Association and the Maloofs, Johnson said.

"The clock is ticking," he said. "We know there is a deadline looming of March 1, 2012."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Kings owners, NBA await arena next steps

2011-05-27T02:03:57Z

The Sacramento Kings' majority owners reacted positively to a new plan for a proposed $387 million arena project unveiled Thursday, but admitted they're anxious to see whether the plan can be turned into reality.

Developers told the Sacramento City Council a $241 million arena, with a total project cost of $387 million, could be built by early 2015 if a mix of public and private funding can be pulled together.

During a two-and-a-half-hour presentation, ICON Venue Group President Tim Romani, Sacramento developer David Taylor and others on an arena development team provided the public with many details of the plan.

Afterward, team co-owners Gavin and Joe Maloof told reporters they have a "very positive reaction" to the current prospects for building a new home for the Sacramento Kings.

"We have a lot better feeling now than we have in the past," Joe Maloof said in a press conference in the lobby of City Hall.

Acknowledging the plan as "a great first step," Gavin Maloof said the family is "anxiously looking forward to the next steps." He called on the region to help see the project get financed and built, rather than leaving an arena-building campaign to the city and Sacramento County as in earlier efforts.

"Hopefully we can get it done," Maloof said. "We need everyone's help. We need every single county to come forward to help in this effort. We need every city in this region to help out and come forward for this effort. It can't be done by one city and one county alone.

A 675,000-square-foot arena with 18,594 seats, 74 luxury suites, 2,080 premium and club seats and other amenities could be constructed, Romani said when the arena team presented an arena feasibility report at a special council meeting Thursday afternoon.

"We designed a building that we believe is right-sized for the market," Taylor told the City Council.

Power Balance Pavilion in Natomas, the current home of the Sacramento Kings, can seat up to 17,317 and has 30 luxury suites and 712 club seats.

The team also recommends that the public own the facility, Taylor said.

“We've got to make sure we protect our interests as a community,” he said.

The arena's construction is estimated to cost $241 million. Total project costs are estimated at nearly $387 million to include start-up expenses, sales and marketing, land acquisition and site development, design and other professional services, project administration, and more than $16 million in fees and permits applied by the city and other entities, Romani said.

Most arena projects around the country see permit costs of 1 percent, said Romani, adding the team was surprised to discover that.

The cost per square foot in 2013 would be $358, compared to an average of $362 per square foot for 12 other NBA arenas built recently, said Dale Koger, vice president and general manager of Turner Construction Sports.

“This building is exciting, it's efficient and it's very cost-effective," he said.

The developers couldn't provide the council with a list of financing options developed specifically for the Sacramento region Thursday after the Maloofs didn't turn over financial information until recently.

A location on city land in the downtown railyards is preferred. But city land in Natomas could also hold a new entertainment and sports complex where the National Basketball Association team would be the anchor tenant. About $3.4 million in site work costs could be saved if the facility is built in Natomas, Romani said.

Only three out of 30 NBA teams play in arenas that aren't located in downtowns.

"Every other team in the NBA does, in fact, play in a downtown-located facility. Clearly, the trend is there," Romani said.

The NBA-compliant arena has been designed to be compact and intimate and to comply with National Hockey League guidelines. The facility would also be integrated with plans for a regional transit center the city plans to build on adjacent railyards land, according to the team.

The arena's size, amenities and on-site practice facilities could change following dialogue with the Kings' owners, the Maloof family, and other stakeholders.

The owner of the arena would be a public entity, most likely a joint powers authority. Officials, developers and the Maloofs still need to discuss whether the Maloofs, the city or someone else would be the arena developer and/or operator. By including a third-party developer or operator, the possible sources of private funding would be bigger, according to the report.

Developers proposed Power Balance Pavilion be turned into an office complex. An appraiser hired by the team determined the 185 acres of city land there is worth between $8.5 million to $11.6 million today, but may double in value within three years, Taylor said.

Council members also reacted positively to the plan. Councilman Rob Fong noted he and others on the council have worked "long and hard" to get a new facility built.

"This is a great day for the city of Sacramento," Fong said. "We have never been (nearly) this far down the road."

The developers have put together a list of possible financing sources. They used information from five similar NBA markets to create the arena's design and programming.

In order for the arena to be completed by early 2015, the environmental review of the project must begin this summer and be completed by the summer of 2012, design must begin in September and construction must begin by January 2013.

The focus will now shift to how the facility will be paid for, Mayor Kevin Johnson said.

Under a 100-day plan, developers and government officials must come up with the financing model and funding options by August. Funding must be secured by the March 2012 deadline set by the NBA and the Maloofs, who agreed to keep the Kings in Sacramento until then to give the city time to work on the arena effort.

Several people applauded Johnson, the city and developers for their work on the feasibility study during the public hearing portion of the meeting. Downtown Sacramento Partnership Executive Director Michael Ault, Sacramento Convention & Visitors Bureau President Steve Hammond and Sacramento Metro Chamber President Matt Mahood were among a handful of people who made comments.

The NBA also reacted positively to the feasibility report. League officials are "encouraged" by the process that's been undertaken and the support for a new arena that's come from Johnson, business leaders and fans, NBA Commissioner David Stern later said.

"The focus now is moving forward in developing a public-private partnership financing model that will bring a new arena to fruition," Stern said in a prepared statement. "That is priority No. 1 in Sacramento for all of us.”

The facility could be finished in time for the 2014 NBA season if enough funding becomes available to speed up the process, Romani said.

"I'm here to tell you that all the key ingredients are here in Sacramento," Romani said. "Power Balance Pavilion has served the city well for the last 26 years. But clearly, its best days have come and gone."

Suzanne Hurt is a staff reporter at The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Developers present arena plan details

2011-05-26T20:34:24Z

Developers say Sacramento could build a $241 million arena, with a total project cost of $387 million, by early 2015 if a mix of public and private funding can be pulled together, according to a feasibility report presented to the city Thursday.

The ICON-Taylor team says a 675,000-square-foot arena with 18,594 seats, 74 luxury suites, 2,080 premium and club seats and other amenities could be constructed.

Power Balance Pavilion in Natomas, the current home of the Sacramento Kings, can seat up to 17,317 and has 30 luxury suites and 712 club seats.

A location on city land in the downtown railyards is preferred, but city land in Natomas could also hold a new entertainment and sports complex where the National Basketball Association team would be the anchor tenant.

About $3.4 million in sitework costs could be saved if the facility were built in Natomas, according to the report being presented at a special City Council meeting Thursday afternoon.

The railyards site would present the most potential to "create jobs, activate downtown and enhance transit connectivity," the developers wrote in an executive summary. The "Natomas site (is) also feasible, but would mean Sacramento remains one of only three NBA cities with arenas not based in downtown areas."

The development team, which began making a presentation to the council at 1 p.m. Thursday, includes ICON Venue Group President Tim Romani, Sacramento developer David Taylor and representatives from the design firm Populous and Turner Construction. The group arrived at City Hall Thursday morning to do a dry run of the presentation.

The arena's size, amenities and on-site practice facilities could change following dialogue with the Kings' owners, the Maloof family, and other stakeholders.

The developers have put together a list of possible financing sources. They used information from five similar NBA markets to create the arena's design and programming.

The facility could be finished in time for the 2014 NBA season if enough funding becomes available to speed up the process, according to the report.

Plan for $386m arena lacks financing details

2011-05-26T01:28:58Z

Arena developers are expected to unveil plans to build a new Sacramento arena, reportedly at a cost of $386 million, at a special City Council meeting Thursday – but they're not sure how to finance it just yet.

The ICON-Taylor team will discuss the possible design, amenities, location and cost to construct an arena in a 1 p.m. presentation at City Hall.

The team's feasibility analysis determined that both public and private financing will be required for the project. Without either, the project wouldn't be feasible, according to a staff report released Wednesday.

Sacramento County voters rejected a plan to build a $600 million, 1 million-square-foot arena in 2006. The city also chose not to work with developers who proposed $600 million projects at a February 8 City Council meeting. The Icon-Taylor team is expected to reveal plans for an arena that is less than 700,000 square feet in size.

Arena supporters, including the Sacramento Kings' owners, are likely to have an easier time getting support for public financing because the new plan will be scaled down in cost and size, Sacramento City Councilman Rob Fong said Wednesday.

"If we're starting with a smaller number to begin with, the task is not as great," Fong said. "Anything we can do to make sure we're being efficient, I think, is a plus."

Despite repeated requests from the city, the Maloofs – who control a majority share of the team – didn't turn over revenue information until after announcing May 2 they would keep the team in Sacramento another year. The Maloofs reportedly turned over financial statements just last week.

The developers were given 90 days to study the viability of building a new arena in Sacramento. The deadline was later extended to May 26.

The team won't be able to provide the council with a list of financing options developed specifically for the Sacramento region as expected, according to the staff report.

"Given that the proprietary financial data of the Sacramento Kings was not made available to the ICON-Taylor team until 80 days into the analysis, coupled with the city's focus on addressing its fiscal year budget and the need to integrate regional components beyond the scope of the work plan, the feasibility study is confined to identifying an appropriate financing model and not providing a specific financing plan," staff wrote in the report.

The analysis is expected to include cost comparisons based on whether a new arena is built on city land at the downtown railyards or on land in Natomas adjacent to or on the site of the Kings' current home, Power Balance Pavilion.

City staff posted a graphic rendering of a swank new arena located in the railyards from global design firm Populous' graphic on the city website Wednesday afternoon. (Link to city website)

The council is being asked to give city staff 100 days to review the developers' study and then report back to the council.

The city manager will set up a technical review team of at least nine people, including the heads of several city departments, the Sacramento Area Council of Governments, Sacramento Regional Transit, Sacramento County and sports facility consultants the city may hire to assist with the evaluation.

In February, at least two teams vying to develop a new arena estimated the cost to build an arena and surrounding infrastructure and supporting development such as hotels, restaurants and retail to be at least $600 million. The ICON-Taylor team was chosen to conduct a feasibility study after its leaders said they expected an arena wouldn't cost much more than $300 million.

Once the report has been presented to the city, staff will work with other government agencies in the area to develop financing options.

City Treasurer Russ Fehr said Wednesday he couldn't comment until the council directs staff to work on the project.

Former Kings star Chris Webber said early this month he's putting together a team of investors to fund a new arena. On Tuesday, a story surfaced saying Webber met recently in Sacramento with potential investors including Manny Pangilinan, chairman of the Philippine Long Distance Telephone Company and owner of two Philippine Basketball Association teams.

A tour of Power Balance Pavilion reportedly took place. Pangilinan was quoted by an English-language daily in the Phillipines, Cebu Daily News, saying he would want to own a majority stake in the Kings if he invests in the team.

The Maloofs could not be reached for comment. Representatives of Maloof Sports and Entertainment said they weren't aware of such a tour.

"I wouldn't comment on that," said Darrin May, executive director of media relations for the Kings.

Council members are eager to learn more about what an arena might cost and how it will be paid for, Councilman Kevin McCarty said.

"The overarching question ... is, what's the path to paying for that?" McCarty said. "I'm still waiting, and I think the rest of the city is waiting, too, to see what that looks like."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Arena report set for Thursday

2011-05-25T01:26:23Z

A new arena for Sacramento is likely to cost nearly $400 million and will likely have the Kings as tenants but not operators, the mayor said Tuesday.

The cost of the entire project, which would build a new arena from the ground up, is expected to be far lower than the $600 million proposed to build an arena in 2006 – partly because the recession has lowered construction costs and partly because the plans will call for a "smaller but yet world-class venue" of less than 700,000 square feet that fits the region's needs, according to Mayor Kevin Johnson.

Power Balance Pavilion, the Kings’ current home, is 442,000 square feet.

"The viability of this project happening in Sacramento is real," Johnson said in a press conference at City Hall. "We have the best in the business right now looking at it."

In a special City Council meeting set for Thursday afternoon, arena developers will present a report on a feasibility study that will outline the options that exist for building a new facility. The presentation will give council members and the public a first look at the study’s results.

The cost is still being finalized before the meeting, but the price will be under $400 million – somewhere between $350 million to $395 million, said Johnson, who dispelled recent reports the arena price tag will be $370 million.

"I don't think 370 is accurate. I actually haven't seen the final number. I've been told that's not an accurate number," he said. "I do think it will be under $400 million, which is important."

The ICON-Taylor development team will reveal the expected cost, possible revenue streams, financing options, location analysis, design, facility programming and timelines at 2 p.m. Thursday at City Hall. The developers have been working on the study since early February.

Johnson reiterated that a public-private partnership will be needed to pay for a new arena. Developers are putting together a variety of public financing options and types of partnerships to be considered.

After the feasibility study is presented to the council Thursday, developers and officials must start work to determine how much private money will be available to help pay for an arena and how much of a gap remains that may be filled by public financing.

Maloof Sports and Entertainment, which co-owns and controls the Kings, is likely to make a contribution to that partnership by being just the major tenant – and not the arena's year-round operator. If so, the city will need to find an arena operator, Johnson said.

Johnson said he's been talking with everyone who may be interested in playing a role in the arena effort, including Tim Leiweke, president of AEG, which owns and operates the Staples Center in Los Angeles, the Sprint Center in Kansas City and many other sports facilities.

City officials will be asked to decide whether to contribute land the city owns – most likely a site at the downtown railyards.

Next week, the mayor will announce a regional commission being pulled together to spearhead a campaign to build the arena. Johnson said it is too early to talk about what kind of contribution might be made from cities and counties in outlying areas.

The Maloofs announced May 2 that the Kings will remain in Sacramento another year. At that time, the Maloofs and the National Basketball Association set a March 1 deadline for the region to make a substantial effort to provide the team with a new home.

City officials hope to have arena financing and other issues solved by November or December, Johnson said.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Power Balance arena pros and cons

2011-05-20T23:50:37Z

Power Balance Pavilion isn't being passed by on concert tours or by the National Collegiate Athletic Association because of anything wrong with it physically.

The facility is good enough for Lady Gaga and Britney Spears to play there this spring and summer. The arena which has been the long-time home to the Sacramento Kings has many good points, according to people who've spent a lot of time there.

However, some big conventions and events, primarily religious conventions, have skipped Sacramento altogether because the arena isn't close to enough hotels.

Its money-making capacity is hindered by the smaller number of seats and luxury suites, compared to newer arenas.

Other problems exist because it is an aging arena that lacks opulence and more comfort, and it may not have been as well maintained as it could.

NCAA has no problems with Sacramento’s arena

City officials and business leaders have pointed to the fact that the NCAA basketball tournament hasn't played here since 2007 as proof the arena must not be good enough for the Kings.

NCAA basketball tournament rounds staged here in 1994, 1998, 2002 and 2007 sold out the arena. But the last time the Sacramento Sports Commission put in a bid to bring the tournament back – believed to be 2009 – Sacramento wasn't chosen.

City officials got no details about how that decision was made from the person who gave them the news, commission Executive Director John McCasey said.

"His comment was the city has to work on its arena issues," McCasey said. "They never ever had the courtesy to tell us why."

But the NCAA executive overseeing all championships said the basketball tournament has not returned simply because the honor of hosting the games must be rotated among cities. Sixty to 70 cities put in bids to host 12 basketball slots each year, said Greg Shaheen, the NCAA's interim executive vice president of championships and alliances.

Power Balance Pavilion has no physical or size limitations to the NCAA tournament playing there. In fact, the tournament doesn't even use NBA buildings for all the slots. Campus buildings and other sports facilities like the Honda Center in Anaheim have been used, said Shaheen, who visited what was then Arco Arena in 2002 and 2007.

When it comes to arenas, the needs of the tournament are not the same as the needs of the Kings, its permanent tenant, he added.

"It's not an apples to apples comparison," said Shaheen, adding the person who informed Sacramento about the lost NCAA bid was likely referring to the fact the NCAA was monitoring discussions about a new arena in Sacramento.

Seat capacity may be biggest challenge to concerts and shows

Concerts and other shows face challenges there because there's only one loading dock and extra riggers must be used to hang sound and lighting equipment from steel beams hanging from the ceiling at an angle to the stage.

Arenas are notoriously difficult places for sound reproduction. The sound at Power Balance is not as good as other facilities, but it's unclear whether that's because of the arena, the production company or people coming through on tour.

Bette Midler got fantastic sound there after sending an advanced sound specialist and Neil Diamond has played the arena many times, said Susie Owens, a stagehand who's helped set up and take down shows at the arena since it opened in November 1988.

Shows face bigger problems at other venues, primarily theaters. Many old vaudeville theaters are still being used for productions.

"I've worked in so many places that are so much worse than that and have so many ridiculous things that are still in operation," Owens said. "I just walk in and go, 'Oh mother of god – what are we doing here?' You literally have to put your show in with a shoehorn. At Arco, you just don't have to worry about that sort of stuff."

Dressing rooms are nothing special but that doesn’t stop people from touring there. The biggest obstacle to shows and possibly concerts is the arena only seats up to 17,317 people, said Owens, who helped load Cirque du Soleil in and out of the arena last weekend

Smaller shows usually go to bigger facilities to make enough money to cover tour costs, then extend tours and go to smaller venues only if they can.

Owens said she would like a new arena to be built out of self-interest – that's where she works – and so a wider variety of shows can be put on in a more comfortable environment with better sound. Power Balance has been a good investment that has served the region well, she said.

"I certainly understand why people don't want to spend the money that way – that people want to spend it on education, and when police and firefighters are showing up at the city council wanting to keep their jobs, you want to support them," she said.

Despite any problems, the arena is popular for concerts. Shows don't skip the arena because of any production issues, according to Live Nation Entertainment, whose subsidiaries include Ticket Master, Live Nation Concerts and an artist management company.

"The Power Balance arena is very widely used and continues to be a successful venue in the market," said Jodi Goodman, senior vice president of Northern California for Live Nation.

"Little stands in the way of shows playing Power Balance Pavilion if a tour has enough dates on their routing schedule for secondary markets. Sacramento is always at the top of the list."

More arena pros and cons

Representatives from Maloof Sports & Entertainment and the National Basketball Association were not available to comment on why they believe a new arena is needed in Sacramento or to provide a tour of Power Balance Pavilion.

Interviews with others touched on pros and cons of the existing facility.

The arena hasn't been well maintained over the years. Problems include smelly bathrooms; an outdated kitchen; uncomfortable, small plastic seats; and a small, broken-down visitor's locker room considered one of the worst in the league, said sports reporter Marty McNeal, who covered the Kings for The Sacramento Bee, where he worked from 1990-2009. He currently blogs on Marty Mac's World.

The Kings' locker room, however, was renovated six or seven years ago and is quite nice, he said.

Most modern arenas now have twice as many as luxury boxes as Power Balance Pavilion, which has 30.

Some people are fairly happy with the luxury suites, which come in two sizes. Some hold 26 people and some hold half that.

They have an intimate setting because they're small, close to other fans and each comes with a set of regular seats outside right in front of the box.

Suites have their own bathrooms, TVs and really good service – sometimes from just one person assigned to that box. They're not as isolated as luxury boxes at other arenas, said Doug Elmets, spokesman for Thunder Valley Casino Resort and its owner, the United Auburn Indian Community.

The tribe sponsors a luxury box at the arena and recently pledged $1 million toward the effort to stop the Kings from moving to Anaheim. Elmets previously worked for Arco and the oil company's arena suite was managed through his office.

"One of the real hidden benefits of the suites at Arco is it's much more intimate than I've experienced at other arenas," Elmets said. "It's rarified air but not too snobby."

He described the suites as beautiful but a little outdated. New arenas have more cushy and luxurious suites.

"They could certainly be more opulent," he said. "They're sufficient, but they are not opulent."

McNeal agreed, saying, "There's not a bit of opulence around that joint."

However, others said luxury boxes are "a bit tired" and small luxury boxes are cramped and awkward, making entertaining difficult. They're not laid out as well for viewing and acoustics could be better, said Tom Kandris, chief executive officer and managing director of American River Packaging, another of the 30 companies whose financial commitments to the Kings kept the team in town.

The first three rows of premium seats are right on the floor. That arrangement means other premium seats are close to the floor rather than set back like at other arenas, said Kandris, whose company has both premium seats and a luxury box.

Business executives like Kandris want to keep the Kings in Sacramento and see a new arena built because basketball games are good places to bring people together and build relationships with employees and customers. They also think having an NBA team and a new arena is a vital boost to the community's image, he said.

"A lot of business owners are not trying to save basketball per se. They're trying to create and enhance civic pride.... and show the community has spirit," Kandris said. "My love for the community is larger than my love of basketball."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

City leaders to start new arena dialogue

2011-03-09T02:58:54Z

This spring, city leaders expect to begin a new effort to determine whether the community will support public funding for a new arena – even if the Sacramento Kings leave, Mayor Kevin Johnson said Tuesday.

City officials plan to start a new discussion with the public after a development team presents an analysis and list of financing options to build a sports and entertainment center, he said.

The analysis is currently scheduled to be presented to the Sacramento City Council in May.

By that time, the Kings' future should be more certain. The Maloofs, who own a majority share of the team, are working on a deal to move the team to Anaheim before next season and are expected to discuss that with the NBA Board of Governors April 14-15. The team must request permission to move by April 18 under an NBA deadline extension.

Mistakes may have been made in past efforts to build a new arena in Sacramento, Johnson said.

"I think it was a mistake if we framed it a few years ago like we were building something for the Kings.... It should not have been just about them," he said in a Tuesday morning press conference at City Hall. "I think the public felt it was something that was being jammed down their throats."

The ICON-Taylor team had agreed to provide the city with two analyses – one with the Sacramento Kings as the major tenant and one without the team.

The developers may only be able to conduct the latter analysis because the Maloofs have said they will only provide the Kings’ financial information if the team stays.

Johnson suggested the community may be more likely to support building a new arena if the Kings and Maloofs are out of the picture.

"I think the public feels a lot better now knowing it's not only about the Kings, it's really about us as a community," he said. "The fact that we may be on the brink of losing our team and the key variable in this is an arena.... The public understands that in a different way."

However, the community would be losing a "major employer" without the Kings and an arena, he said.

During the press conference, two people who work at the Kings' home arena in Natomas, recently renamed the Power Balance Pavilion, said they and their families would suffer if the Kings left and a new arena isn't built.

The mayor applauded fans' ongoing efforts to keep the Kings in Sacramento. Some Kings fans are lobbying the Los Angeles Lakers and Clippers to vote "no" on allowing the Kings to move to Southern California, he said.

However, Johnson said he wants people to be realistic about their ability to impact the Maloofs' decision.

"I just want to make sure everyone's expectations are in alignment with the reality that we're facing," he said. "They are, in my estimation, doing everything they can to make a deal happen in Anaheim."

The City Council is expected to discuss how the schedule for the arena's financial analysis may be impacted by the recent news about the team's possible move and the Maloofs' unwillingness to provide financial data to the developers, he added.

Regional leaders may be called together next week for an update and to get their input on building a new arena.

If the team stays in Sacramento, the team's owners will have to spend money to recruit more good players, Johnson said.

"Over the last couple years, the basketball product that was put on the court hasn't been as competitive," he said. "And the basketball product on the court has not connected with the fan base in terms of rekindling or creating that energy and excitement. We haven't spent the dollars that we needed to win."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Maloofs stay quiet as deadline looms

2011-02-24T01:13:23Z

A development team spearheading the process to build Sacramento a new arena has been talking with the Kings' owners but has been unable to meet with them – even as a deadline for the team's possible move draws near.

Sacramento Mayor Kevin Johnson would like to talk with the Maloofs as well, after not speaking with them in a month. A process to build a new facility to replace Arco Arena, the current home of the Kings basketball team, is underway.

Communication from the Maloofs appears limited. But the Kings' owners have not tried to leverage the possibility of moving to another city like Anaheim to get a better deal in Sacramento, said Bob Graswich, special assistant to the mayor.

"They have not drawn a line in the sand. They have not made any threats," Graswich said. "The Maloofs have not called up the mayor and said, 'Hey, we're going to Anaheim.' "

March 1 is the deadline for the Maloofs to file a request to move the team in 2011. The NBA Board of Governors could vote to approve a deadline extension.

Johnson, a former NBA basketball player, has seen that tactic used by some team owners to get new or better deals out of other cities by pitting one city against another. But reports about the Maloofs' possible interest in Anaheim are coming from other sources – not the Maloofs, Graswich said.

National Basketball Association Commissioner David Stern confirmed over the weekend that the Maloofs have talked to Anaheim officials. The Orange County Register reported Tuesday that the Maloofs met with Honda Center management and Anaheim officials, including the city manager, earlier this month.

Meanwhile, Sacramento developer David Taylor and ICON Venue Group are still trying to set up a meeting with the Maloofs, more than two weeks after the Sacramento City Council gave the developers only 90 days to study what it would take to build Sacramento a new sports and entertainment center.

The developers and the Maloofs have been talking regularly. But they haven't spoken about how likely it is the Kings will move to another city, said Adam Mendelsohn, a partner at Mercury Public Affairs and a former member of Johnson's arena task force.

"There's regular discussion back and forth on both sides," Mendelsohn said. "The only thing that's been talked about is the exchange of information and the possibility for a formal meeting."

The mayor was in Washington, D.C., Wednesday doing business with the U.S. Conference of Mayors. Johnson is expected to talk with the Maloofs soon, but efforts to set that up are ongoing, mayoral aides said.

On Tuesday, Johnson said he expects the Maloofs to turn over promised research on arena expenses, revenue and other information this week and to meet with the developers next week.

"He made it clear he expects them to deal with the ICON-Taylor group," Graswich said. "The ball's in their court. Certainly the team knows the ICON-Taylor group has gotten the blessing by the city."

The Maloofs won't provide updated information to reporters or respond to questions about a potential move and the effort to build a new arena in Sacramento, according to a Kings spokesman.

The developers have just started the due diligence process of gathering information requested by the city and needed by the developers before possibly entering a contract to build an arena.

"We are moving forward with our commitment to deliver a plan to the city," Mendelsohn said.

On Wednesday, even the mayor didn't know whether the Kings will stay in Sacramento.

"All he knows is they haven't announced they're leaving," Graswich said.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

ICON-Taylor team gets 90 days to study arena viability

2011-02-09T06:50:30Z

The Sacramento City Council on Tuesday picked Sacramento developer David Taylor and the Colorado arena builder ICON Venue Group to lead the city's next effort to build a new arena.

In a unanimous vote, the nine-member council gave the ICON-Taylor team the go-ahead to work exclusively with city staff for the next three months to determine the financial feasibility of replacing Arco Arena, the home of the Sacramento Kings.

The council did not technically approve a development contract with the team. The project's developer and location will be chosen later. But the council's vote paves the way for the ICON-Taylor team to meet with the Kings' owners, the Maloofs, and other stakeholders to determine what it will take to construct a new sports and entertainment center.

The team, which was put together by Mayor Kevin Johnson in December, was one of four competing for a thumbs-up from the council.

At a Tuesday night meeting, council members repeated their requests to focus on how construction can be financed.

"While I appreciate dreams and visions that people have for whatever sites they want to promote, I have to say, for me, it comes down to financing," Councilman Steve Cohn said. "I want straight answers, and I want the best possible team to get straight answers. Based on what I've seen, I think those answers can best come from the ICON-Taylor group."

Taylor is a prominent developer who has galvanized much redevelopment in downtown Sacramento, with projects including the Sheraton Grand Sacramento on J Street, Esquire Plaza on K Street Mall and the new City Hall on I Street.

ICON, a Denver company led by President and CEO Tim Romani, has built more than 50 sports facilities throughout the world and is especially experienced in building NBA arenas. ICON's projects have included Pittsburgh's Consol Energy Center, Denver's Pepsi Center and the Chicago White Sox's new Comiskey Park, named US Cellular Field.

The team also includes the Kansas City, Mo., sports architecture firm Populous, New York-based Turner Construction and former arena task force member Dan Meis, who designed the Staples Center in Los Angeles.

Councilwoman Bonnie Pannell and other council members voiced support for Taylor's offer to possibly involve developers from other teams when creating a plan.

The ICON-Taylor team will explore building a new arena wherever that would be most viable, including Natomas, Romani said.

At least two teams estimated the cost to build new arenas and surrounding infrastructure and supporting development such as hotels, restaurants and retail to be at least $600 million.

Romani said he wouldn't expect an arena to cost much more than $300 million, but he didn’t go into detail about what that would cover. The team needs 90 days to analyze up-front capital costs, annual operating costs and revenue drivers for a 20-year period, he said.

"Is this an aggressive schedule? You bet it is," Romani said. "Frankly, I think we're about the only people you can turn to to get it done in 90 days."

On Wednesday morning, the team will try to set up a meeting with the Maloofs. The team will also meet with Natomas business leaders, the area's council member, Angelique Ashby, and others to discuss options for the Arco site, Taylor said.

The council postponed a decision on which team should move forward on an arena project with the city two weeks ago. At the Jan. 25 council meeting, the mayor's arena task force had urged the council to choose the ICON-Taylor team. But council members wanted to learn more about the teams before making a choice.

The decision kicks off the Johnson administration's second effort to build a new arena. The city worked with one of the four contenders, the Sacramento Convergence Team, under an exclusive agreement last year after the mayor called for proposals in late 2009.

That team had proposed a complex three-way land swap that involved moving the state fairgrounds to the Arco Arena site in Natomas and privately developing the existing California Exposition and State Fairgrounds site to help finance an arena in the downtown railyards.

Cal Expo officials voted against the plan in September. The Convergence Team's exclusive negotiating period with the city ended the next month.

The ICON-Taylor team will now work with staff from the city manager's office, treasurer's office, finance department and Department of Economic Development to create a proposal to finance construction.

After three months, city staff will evaluate the proposal's viability. Staff members are expected to present their findings to the City Council in July.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Council weighs arena teams

2011-02-08T03:50:21Z

The Sacramento City Council will take a closer look Tuesday at four development teams competing for a new Sacramento Kings arena project.

The teams will take turns presenting credentials, experience and plans to analyze the financial feasibility of building a new sports and entertainment center to replace the Kings' current home, Arco Arena – soon to be known as the Power Balance Pavilion.

The City Council is expected to decide at its Tuesday night meeting which team will work exclusively with the city for the next three months. The council postponed that decision two weeks ago so council members could get more information about the developers.

The teams are:

• The ICON-Taylor team, put together by Mayor Kevin Johnson and led by Sacramento developer David Taylor and Tim Romani, president and CEO of ICON Venue Group, a prominent Colorado sports facility developer;

• The CORE team, led by entrepreneur Ali Mackani and McClellan Park developer Larry Kelley;

• Natomas Entertainment Sports Center Partners, led by Jeff Baize of Brookhurst Development Corp., Mike Corrick of Nacht & Lewis Architects and Rick Millitello, general manager of Skanska USA Building Inc. of Oakland;

• The Convergence Team, led by Sacramento developer Gerry Kamilos.

Prior to the meeting, at least one team expressed confusion over an inability to meet with the Kings' owners, the Maloofs. Other teams discussed efforts to move their plans forward.

Natomas ESC Partners tried to set up a meeting with the Maloofs last week to get information and feedback on the team's financial plan and to see if the Kings' owners were open to the ideas. An attorney for the Maloofs said a meeting wasn't possible, Natomas Chamber of Commerce President Ed Koop said.

"The response back was we needed to get in touch with Mayor Johnson, because he was coordinating any potential projects with the Maloofs going forward," Koop said.

Two other teams – the CORE team and the Convergence Team – will be able to tell the council that they have been able to set up or held meetings with stakeholders in their plans.

The CORE team has a Feb. 16 meeting set up with the Westfield Group to begin negotiations to buy Westfield Downtown Plaza after securing commitments for up to $100 million. If that happens, they'd begin talks with Macy's to see if the department store chain would be interested in expanding its store there. The team believes that site makes the most sense financially for a new arena, Mackani said.

But the CORE team doesn't want to be part of a continued four-way competition. The Kings' owners won't be involved in a process like that, he added.

"The Maloofs aren't going to sit across the table from four teams," Mackani said. "That's not how business is done."

The Convergence Team has continued negotiations with California Exposition and State Fair officials on a scaled-down plan to privately develop the existing state fair site to help fund an arena, said Jeff Raimundo, a communications consultant on the team.

Last September, Cal Expo board members voted against the team's plan to relocate the fairgrounds to Arco Arena in Natomas and develop the 350-acre Cal Expo site to finance an arena. A Cal Expo manager told the mayor's arena task force this month that agency officials are reluctant to consider the updated plan.*** See correction at the bottom of the story

City staff will recommend the council choose one of the teams Tuesday night, as the task force suggested two weeks ago. Last month, the task force recommended the city work with the ICON-Taylor team in an effort to build a new arena. The task force ranked the CORE team second.

The team should be chosen based on its experience developing arenas or other large entertainment venues and using public/private funding for big projects and ability to analyze the project’s feasibility in the scheduled time frame, rather than on its proposed arena site, according to a city staff report.

The selected team will then work with city staff to analyze the project's financial viability.

Correction:

When appearing before the task force in January, Cal Expo Deputy General Manager Brian May had addressed questions concerning Cal Expo officials' reluctance to consider the Convergence Team's original proposal, which involved a three-way land swap.

Cal Expo officials are willing to consider the team's new proposal, but only as part of a competitive process. They have met with Kamilos and others proposing plans to rebuild the state fairgrounds and develop other property there, May said.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Council to consider arena team qualifications

2011-01-26T06:48:01Z

The Sacramento City Council decided Tuesday to move forward with all four teams vying to develop a new arena for the Sacramento Kings – for at least a little longer.

Following a motion by City Councilman Steve Cohn, all nine members of the council voted unanimously to schedule a hearing in two weeks for the teams to provide their qualifications and financing approaches directly to the council.

In doing so, they decided not to follow a recommendation made Friday by Mayor Kevin Johnson's arena task force that the city start working with just one team, led by Sacramento developer David Taylor and ICON Venue Group, a prominent Colorado sports facility developer.

Several council members said they had more questions that have to be addressed before they could make such a decision. Some initially expressed an interest in giving city staff a 90-day period to evaluate all four teams.

Assistant City Manager John Dangberg suggested a two-week time frame as an alternative and Cohn made the motion. They did so after the ICON-Taylor team and the CORE team indicated they wouldn't continue with the process if all four teams were kept in the game three more months. The Natomas Entertainment Sports Center Partners and the Convergence Team said they would.

"At some point, we really want to have our staff that we hired to work for us" evaluate the teams, City Councilman Kevin McCarty said.

City Councilman Rob Fong urged city staff to engage the Maloofs, who own the Kings, soon to determine what approach they'd support for building a sports and entertainment facility to replace Arco Arena, the Kings' current home.

Johnson led the meeting but remained silent during a public hearing and council discussion lasting more than two hours. He brought the ICON-Taylor team together after the Convergence Team, which then included Taylor, failed to produce a viable project on schedule last year.

ICON President and CEO Tim Romani asked the council to give his team 90 days to study the project's feasibility and to develop a proposal and financing plan.

Romani warned that the Kings are not "locked into" Sacramento, and representing team owners who decide to relocate is "a messy ordeal." He said he'd rather help find a solution so the Kings can stay in Sacramento. Right now, the team is playing in an arena that "pales in comparison to every other arena in the NBA," Romani said.

"It's a critical time for Sacramento if (you) want to keep the Kings," he said. "I can tell you this: I think the time for process is behind you. I think the time for results is right now."

In the second half of March, the Maloofs will have an option to get out of their lease at Arco, task force co-chair Chris Lehane said.

The task force gave the ICON-Taylor team a first-place ranking based on its experience. ICON has built more than 50 sports complexes throughout the world and is especially experienced in building NBA arenas, task force member Tom Friery told the council.

Natomas Chamber of Commerce President Ed Koop and several others from Natomas asked Johnson and the Council to reject the recommendation of the ICON-Taylor team.

About 400 people signed petitions in support of keeping the arena in Natomas. Koop countered comments that no economic development had sprung up around the arena. At least two dozen restaurants, hotels and other businesses have been opened near the arena, Koop said.

"We want the arena. We deserve the arena. And we've got a good plan," he said. "We're pretty confident you're going to (see) that Natomas makes the most sense."

Councilwoman Angelique Ashby, who represents Natomas and downtown, said the Arco site must be redeveloped in a way that would be as beneficial as having a new arena if the project is built downtown. The area's 80,000 residents can't just lose a facility that benefits the local economy so heavily, she said.

In 2006, Sacramento County residents voted against funding a new Kings arena in the downtown railyards. Three of the teams have proposed that site as a possible location.

Fong asked if the city and development teams will consider a new model to finance a new arena, given the state of economy. In most if not all current cases, an entity other than NBA teams build new arenas, however, the teams become the tenants and then benefit from all the revenue that comes in from operating the facility. That income could be used by developers to offset the cost of building the arena, he said later.

Sacramento will have to look at something other than a "classic" funding plan – and the task force recommended the ICON-Taylor team because its members were confident the team would "look outside the box," Lehane said.

The task force and all four teams have acknowledged there must be some public funding for a new arena, but what form that might take isn't agreed on or clear. The task force believes building a new arena downtown makes "the most sense," he said.

"This is ultimately a decision for this body," Lehane said.

Natomas leaders 'frustrated' over arena battle

2011-01-25T01:45:42Z

Natomas business leaders admitted Monday they’re fighting an uphill battle to avoid losing the Sacramento Kings arena.

At a morning press conference, Natomas Chamber of Commerce leaders said they’re asking Mayor Kevin Johnson and the Sacramento City Council to reject a task force recommendation announced Frida y.

The task force, which was appointed by the mayor, recommends Sacramento developer David Taylor and a Colorado sports facility developer be chosen to explore building an arena downtown over the next three months. That team won the recommendation over three others, including one backed by the Natomas chamber.

"Natomas is not giving up the fight to keep the arena in Natomas," said Chamber President Ed Koop, who stood in a soggy field within view of Arco Arena, the Kings’ current home.

The chamber and its arena development team, Natomas Entertainment Sports Center Partners, propose building a new arena on the land – about 100 acres owned by the city.

The chamber and Natomas ESC Partners also encouraged Sacramento residents who support keeping the arena in Natomas to show their support at the City Council meeting at 6 p.m. Tuesday.

The task force is scheduled to present an analysis of four arena teams and recommendations to the City Council then.

The Natomas chamber has gathered hundreds of signatures from residents, business owners and others who want to keep the arena in Natomas, said Marni Leger, who chairs the chamber's arena committee.

Koop and Leger spent the rest of the day meeting with City Council members to discuss their concerns. More appointments were scheduled for Tuesday.

They're asking the City Council to determine how much it would cost to build an arena downtown versus in Natomas.

Skanska, the Natomas team's contractor, looked at two proposed downtown sites – the downtown railyards and Westfield Downtown Plaza – and estimated keeping the arena in Natomas would save $100 million to $200 million, said Bob Moreno, managing director of Brookhurst Development Corp. The company is a partner on the Natomas development team.

The ICON-Taylor team doesn’t have a plan to build an arena yet but asked the city for 90 days to create one. The task force is recommending the city work exclusively with that team, but the lack of a plan will continue to delay getting an area built after another attempt failed last year. The Natomas site is “shovel-ready” and has all the necessary infrastructure, they said.

"It's pretty frustrating to be at this point," Koop said. "From the beginning, we've known we're fighting an uphill battle."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

ICON-Taylor team favored to build arena

2011-01-22T01:52:52Z

Sacramento developer David Taylor and a prominent Colorado sports facility developer have been pegged as the top contenders in an effort to build the city a new downtown arena.

Mayor Kevin Johnson's arena task force is recommending city officials work with Taylor and ICON Venue Group to determine if building a sports and entertainment center is feasible now and if they're the right team for the project.

In an analysis released Friday, the task force encouraged the city to give the ICON-Taylor team 90 days to study the viability of such a project and to develop a proposal and financing plan. The team was handpicked by Johnson after another team, which then included Taylor, failed to produce a viable project on schedule last year.

Without a detailed proposal for the task force to consider, the ICON-Taylor team's first-place ranking to build an arena in the downtown railyards was based on its experience and credibility. The team's partnership with the historic railyards' new owner, Inland American Real Estate Trust, was also a factor in the selection, according to the analysis.

"While the lack of a development plan could be considered non-responsive in some circumstances, the (ICON-Taylor) team warrants unique consideration owing to its extensive experience and track record, locally, nationally and globally, in the development of major projects, including events centers, under challenging circumstances," the task force said in its analysis.

Task force co-chair Chris Lehane is scheduled to present the analysis to the Sacramento City Council at its Tuesday night meeting.

The task force is recommending the city manager's office take up to 120 days to determine if the team's proposal demonstrates "a real promise of feasibility" and if the Sacramento Kings owners, the Maloofs, or the NBA will commit to stay in Sacramento and work on an acceptable development agreement.

The task force also recommends the City Council consider entering an exclusive negotiating period with the developers to hammer out a final agreement on the project.

Four teams met the task force's Dec. 30 deadline to submit proposals or indicate interest in developing an arena to replace the Kings' current home, Arco Arena, in Natomas.

Detailed proposals were submitted by the Convergence Team, led by Sacramento developer Gerry Kamilos, and Natomas Entertainment Sports Center Partners, led by Mike Corrick of Nacht & Lewis Architects and Rick Millitello, general manager and executive vice president of Skanska USA Building Inc. of Oakland.

Providing proposals with detailed funding plans seemed to work against them, as the task force used those details to rank the teams lower in the analysis.

Natomas ESC Partners, which was ranked fourth, expressed a concern about how a federal moratorium on development in Natomas might affect their proposal during the task force's fact-finding meetings with development teams last week.

The task force said the proposal doesn’t seem to be in the city’s or region’s best interest economically, when compared to building an arena integrated with downtown's future regional transit center. Also, redevelopment of the Arco Arena site should work without a new arena, the task force said.

The Convergence Team, which won the first shot at developing an arena last year, has simplified its proposal, yet its plan remains the most complex.

A California Exposition and State Fair manager told task force members that Cal Expo officials are reluctant to consider even a scaled-down plan to privately develop part of the existing state fair site to help fund a downtown arena.

"The project’s inherent complications likely render it feasible in theory only," the task force said in its analysis.

The CORE team was ranked second by the task force. The team – led by former arena task force member and president of McClellan Park, Larry Kelley, and entrepreneur Ali Mackani – has made a determination of project viability its priority, like the ICON-Taylor team.

The team includes experienced local players such as Kelley, a notable developer, and real estate attorney Mike Kvarme, another former task force member. But the team is lacking a sports facility developer with ICON's expertise, according to the analysis.

The task force recommends the City Council be asked in 90 to 120 days – late April or late May – whether to enter an exclusive negotiating period with the developers.

On Tuesday, the City Council could make a decision to proceed with one or more of the development teams. Because the team's proposals varied so much in terms of detail, city staff members have outlined a set of submission requirements they'd like the team or teams to turn into the city within 90 days. A preliminary financial plan and a signed concurrence agreement with the Kings are among the requirements.

City staff would then take 60 days to review the proposal or proposals, prepare a staff report and return to the council, possibly in July, for consideration of an exclusive negotiating period, said Assistant City Manager John Dangberg.

Task force weighs four arena teams

2011-01-07T02:45:51Z

An arena task force will use flexibility to analyze a second round of project proposals because there is such a wide range of plans now before them, a task force co-chair said Thursday.

Co-chair Chris Lehane called the proposals to build Sacramento a new sports and entertainment facility "apples and oranges.” Each plan from the four teams has different levels of detail and preparation, ranging from three weeks to more than a year, he said after a public hearing at historic City Hall.

Lehane and member Matt Kelly, executive secretary of the Sacramento-Sierra’s Building & Construction Trades Council, said they appreciated the work Sacramento developer Gerry Kamilos and the Convergence Team put into their proposal last year. Their team was given the first shot at the project, and their effort helped move forward a process that can take years, Lehane said.

But task force member Mark Harris, an infrastructure finance expert, berated Kamilos and the team for asking for more time after failing to make enough progress on their proposed three-way land swap during the exclusive negotiating period they had with the city until late October.

Last year, Harris had called the land-swap proposal a "three-card monte." On Thursday, he sarcastically apologized to "the hustlers and scam artists throughout the world" for having compared them to the development team.

"I'm not only disappointed, but I'm offended that we've wasted so much time with the Convergence group," Harris said, raising his voice.

Standing alone before the task force, Kamilos asked for four more months to work out agreements with Cal Expo, the NBA and the Sacramento Kings owners, the Maloofs, in order to build a $500 million – $550 million project at the downtown railyards. His team was the first to get the NBA and the Maloofs to put a financial agreement to build a new arena on the table in 10 years, Kamilos said.

"I take offense to the fact that you choose not to recognize all these elements that have been accomplished in the last year and that have never been made in this city before," he said.

The Convergence presentation and a question-and-answer session with task force members dominated nearly half of a hearing that ran more than two hours.

Kamilos is no longer partnering with another Sacramento developer, David Taylor, who was a member of the Convergence Team until they didn't produce a viable proposal on deadline. Taylor said he joined ICON Venue Group and other members of a team hand-picked by the mayor three weeks ago because he felt they needed to simplify the project and bring in expertise he hadn't seen yet.

Taylor gave a presentation with Tim Romani, president and chief executive officer of Colorado-based ICON.

ICON has managed more arena and stadium development projects worldwide than any other firm. Romani counseled the task force against continuing with the competition Johnson established by putting out a public call for proposals, first in late 2009 and again in late 2010, and appointing the task force. He said leaders should be collaborating to build an arena.

"I don't believe a competing process is going to get you where you need to go," he said. "The collaborative process of all the business leaders, along with the city and the team, is what it's going to take to make this happen."

Presentations were also given by the CORE team, led by entrepreneur Ali Mackani and McClellan Park President Larry Kelley, and by Natomas Entertainment Sports Center Partners, led by Mike Corrick of Nacht & Lewis Architects and Rick Millitello, general manager and executive vice president of Skanska USA Building Inc. of Oakland. Natomas ESC Partners is the only team proposing a plan for the existing Arco Arena site.

The teams focused on the need to determine funding plans, their individual expertise and how soon they could present development and funding plans to the city. All four recognized the need for a public-private partnership on funding, which they said could take several forms except for any type of tax increase.

“There’s no way in hell that this project is going to get done without public help,” Taylor told the task force.

The CORE team and the ICON-Taylor team have no financing plans yet. The Convergence Team and Natomas ESC Partners have detailed finance plans, but questions remain for both.

Romani said the ICON-Taylor team could tell the city whether they can take on the project and how they'd develop and finance it within three months. The CORE team asked for six months to work with city on a financing plan.

The task force will release an analysis of the concepts Jan. 21. The four proposals may be ranked in order of preference, but that's still being determined, Lehane said.

Over the next two weeks, subgroups of the task force will meet with each of the four teams at least once but possibly several times to get more specifics about the teams' expertise and plans.

Task force members advised Natomas ESC Partners to create a more individualized funding plan with several financial models to offer the Maloofs more flexibility, and to flesh out their argument that keeping the arena in Natomas fits with the city's 2030 General Plan and plans for economic growth and increasing jobs.

The task force will present a report on the proposals to the City Council Jan. 25.

Johnson didn't attend the hearing, but he issued a statement later.

"The competition is great for the city, because it gives us more options and ensures we move forward from a position of strength," he said in a prepared statement sent by e-mail. "The public hearing is a great step forward, but we all know these types of deals are not easy – even in the best of times. I look forward to reading their upcoming analysis along with my council colleagues at the end of the month."

Photo 1 of arena task force member Mark Harris and Photo 2 of developer Gerry Kamilos by Brandon Darnell. Photo 3 of Convergence Team lead counsel Chuck Trainor speaking and Don Johnson of Kamilos Co., seated, by Suzanne Hurt, a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Four teams vie for arena project

2010-12-31T02:41:25Z

A team handpicked by Mayor Kevin Johnson and led by Sacramento developer David Taylor and national sports facility builders has emerged as one of the frontrunners to develop a new arena.

Taylor quietly ended his partnership with developer Gerry Kamilos after their first proposal, a complicated land swap, didn't produce a viable proposal by its October deadline. Taylor is now partnering with the historic railyards' new owner, Inland Real Estate Group of Companies, and others. On Thursday, his group submitted a letter of interest to Johnson's arena task force briefly outlining a proposed process for developing a sports and entertainment center.

Another three teams submitted new or modified arena proposals by a noon deadline Thursday. This time, none of the teams have the backing of the National Basketball Association or the Maloof family, which owns the Sacramento Kings.

The other candidates were among the seven original teams that submitted arena proposals last year. They include the Sacramento Convergence team led by Kamilos; the CORE team led by entrepreneur Ali Mackani and two former arena task force members, real estate attorney Mike Kvarme and developer Larry Kelley, president of McClellan Park; and Natomas Entertainment Sports Center Partners, the only team proposing a plan for the existing Arco Arena site.

The NBA has also ended its partnership with the Convergence team after endorsing that plan in January 2010 during a bold press conference across from City Hall.

"The NBA is not backing any one of the arena initiatives, and we will have no further comment at this time," NBA spokesman Mike Bass said in an e-mail to The Sacramento Press Thursday.

The Maloofs have been trying to get an arena built to replace Arco for 11 years. But the family isn't joining any teams in the current effort to get a new arena built. Johnson, a former NBA player, is leading the effort and will brief the Maloofs on the second round of ideas once he gets the proposals, Kings spokesman Mitch Germann said.

"The Maloofs aren't tied to any of the groups that are giving presentations," Germann said. "They're excited to see the proposals that come as a result of this."

Johnson put out a call for proposals late last year, then put together a task force to analyze the proposals. The mayor reconvened the task force in November and put out a call for a second round of new or updated proposals.

The players left in the game are teaming up with national firms that have substantial experience developing, designing and building stadiums and arenas for professional football, baseball and basketball teams.

ICON-Taylor
Taylor has joined a team put together by the mayor that includes Inland, which owns the land adjacent to city property where some teams have proposed a new arena be built; Populous, a global sports architecture firm based in Kansas City, Mo.; New York-based Turner Construction; former arena task force member Dan Meis, who designed the Staples Center in Los Angeles; and ICON Venue, an owner's representative company whose website says it specializes in delivering home venues for pro sports teams. ICON’s projects have included Denver's Pepsi Center and the Chicago White Sox's new Comiskey Park, named US Cellular Field.

Taylor said Johnson contacted him about joining a new team after he left the Sacramento Convergence team.

"I felt the prior effort was not going to have the legs I would have liked it to have," Taylor said. "After being asked to look at this other team and talking to them at length, I was convinced it made sense to give it another try."

The ICON-Taylor team would focus on identifying strategies to finance an integrated arena and regional transit center in the railyards. The team offered to refine designs, present cost and revenue information and develop a conceptual approach for the project by April.

Sacramento Convergence Team
In a letter submitted to the task force Thursday, Kamilos and his team have altered their original proposal, but key elements remain. The team still proposes to build the arena on city railyards land and the Maloofs would operate the facility under a 30-year lease. The plan would still require state legislation to move forward.

But the team's proposed real estate deal has been simplified somewhat, and the price tag for the "Downtown Events Center" has been cut from $400 million to $350 million. Developers also propose buying an adjacent two to six acres from Inland to accommodate parking and a hotel, retail and dining adjacent to the arena and the future regional transit center, Kamilos said.

However, the team now proposes working with the California Exposition and State Fair board to build new fairgrounds at the existing state fair site and to privately develop 125 acres for destination retail, dining and entertainment and other mixed use, including residential and possibly office. State fair operations would remain with the Cal Expo board, but other events at the site would be run privately by VisionMaker Worldwide, a member of the Convergence Team.

The plan would also redevelop the 184-acre site containing Arco Arena in Natomas for mixed use. The arena would be retooled and existing parking would remain.

Under the plan, the Maloofs would share parking revenue and possibly a ticket fee. The Maloofs would operate the arena and collect revenue from facility rentals. The developers would assume the Maloofs’ $67 million Arco Arena debt and pay it off under the current schedule over 17 more years.

"It's essential in a small market that the facility is operated by the team ownership, especially in these times, in order for teams to break even on a cash flow basis," Kamilos said.

The Convergence team has added new members, including AECOM; Hunt Construction Group, which is building the Barclays Center in Brooklyn; Tutor Perini Corp., which has built sports centers and regional transit facilities; and POSCO Engineering & Construction. The group expects to finish a project analysis by May, which would allow construction to begin in 2013 and the new arena to open in summer 2015, according to the letter.

CORE Team
The CORE team – chosen by the task force as one of the top three candidates last spring – has altered its proposal by adding the railyards as a second possible location for an arena and recruiting Kelley, a former Kings owner, to lead the effort. The team also added Kvarme and his law firm, Weintraub Genshlea Chediak. Kelley and Kvarme were key players in one of the country's biggest infill developments and public/private partnerships involving redevelopment of McClellan Air Force Base.

The team continues to offer Westfield Downtown Plaza as another viable location and met briefly with representatives of Westfield and the Maloofs to discuss whether they might be able to work together on the project. The response was positive, but more information must still be gathered to create a workable financing plan under a public/private partnership, Mackani said.

The team will seek assistance from consultants such as Flintco, which has worked on such projects as the FedEx Forum in Memphis, Tenn., he added.

"But at the end of the day, it's about how to fund a project like this. Not how to build it," Mackani said. "That's where our focus is going to be."

Natomas ESC Partners
Natomas ESC Partners didn't make any significant changes to its proposal, but resubmitted it after getting Johnson's assurance it would be reconsidered, said team member Mike Corrick of Nacht & Lewis Architects in Sacramento.

The plan proposes building a $410.6 million, 950,000-square-foot sports and entertainment complex on 100 acres of city-owned land just north of Arco Arena. Arco would become a science park, possibly containing a science museum. Developers would also add a wetlands greenbelt, 250,000-square-foot office park, a spa hotel, retail and housing built in phases to the site.

The team includes Wisconsin-based Hammes Company, which developed the $1.6 billion New Meadowlands stadium that opened in April for the New York Giants and the New York Jets; Skanska, the construction firm that built New Meadowlands; NBBJ, a Seattle firm that built the Staples Center in Los Angeles and six other arenas or stadiums; municipal financing expert Jeff Baize of Brookhurst Development Corp.; and Nacht & Lewis Architects.

The project would be funded by Citigroup issuing taxable bonds that would be repaid over 25 years through the Kings' $10 million annual lease of the property, 50 percent of game day ticket revenues totaling $25.4 million a year, new naming rights, parking fees, facility rental and other revenue. The city would provide the land.

"We thought we had a very viable plan for the Natomas property and we had a very qualified team and a feasible financing plan," Corrick said.

In an e-mailed statement, Johnson said he recognizes developing the project will be challenging, especially in such a tough economy. But the four teams now vying for the project have substantial track records, he said.

"The game is now on," he said in the statement. "And these four different teams will compete with one another and the people of Sacramento, who care about jobs, will be the real winners of this competition."

The arena task force released the four project concepts shortly before 4:30 p.m. A public hearing is set for 10 a.m. Jan. 6 at historic City Hall. The task force will release an analysis of the concepts on Jan. 21, prior to a Sacramento City Council discussion Jan. 25.

In the end, the winning proposal will be the one with the best financing plan, Corrick said.

"It'll be interesting to see what comes out of this round," he said.

Graphic 1 provided by the ICON-Taylor team. Photo of Gerry Kamilos by Suzanne Hurt. Graphic 2 provided by the CORE Team. Graphic 3 provided by Natomas ESC Partners. Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Natomas fights for arena

2010-12-16T02:11:02Z

Natomas business leaders have a critical meeting Thursday in their fight to keep the arena from moving downtown.

Natomas Chamber of Commerce President Ed Koop and N Magazine Publisher Emeritus Marni Leger, who chairs the chamber's Keep Arena committee, are set to meet at City Hall with City Councilwoman Angelique Ashby.

They'll discuss the advantages they see in a revised proposal to build a new sports and entertainment complex on 100 acres of city-owned land adjacent to Arco Arena. The original proposal, created by Natomas Entertainment Sports Center Partners, was one of seven submitted to the city late last year to construct a new arena in Sacramento.

They'll also ask Ashby to help keep the modified proposal on the list of contenders as the Dec. 30 deadline for another round of new or revised proposals approaches and those proposals are considered early next year, Koop said. (LINK to article announcing Dec. 30 deadline)

"If we're not even on that list, it's game over for us," Koop said.

The Natomas Chamber sent letters to Mayor Kevin Johnson and his arena task force last week also requesting that the proposal be kept in the running.

The chamber and its members believe the Natomas location would allow an arena to be built sooner and cheaper than any other location. The environmental review period would be shorter because acceptable air quality and traffic already exist at Arco Arena. The city-owned site is shovel-ready and has infrastructure in place – two freeways, access roads and utilities, Koop said.

Constructing an arena downtown would significantly worsen traffic congestion on freeways and streets downtown, he said.

In addition, chamber leaders contend the team of developers put together by the chamber and Mike Corrick of Nacht & Lewis Architects is the most experienced of the seven. NBBJ, a global architecture, planning and design firm based in Seattle, built the Staples Center in Los Angeles and six other arenas or stadiums.

The chamber began the campaign to keep the arena in Natomas a year ago after Johnson put out a call for arena proposals and said he'd prefer the new arena be built downtown. The committee ceased its work after the city of Sacramento entered an exclusive negotiating agreement with another team led by local developers Gerry Kamilos and David Taylor.

The committee resumed its work three weeks ago after the arena task force was reconvened. Since then, committee members and volunteers have been gathering petition signatures. They hope to collect 1,000 to present to the city and arena task force by Dec. 30.

Stickers reading "Keep the Arena in Natomas" have been popping up on car bumpers and store windows in the area. The free stickers are being handed out by the chamber and business owners such as Koop, whose Fastsigns franchise at 2840 Del Paso Road is within sight of Arco Arena.

The loss of the arena would hit retailers and other businesses like his hard. Koop has sold car wraps, promotional signs and other products to the Kings. Restaurants and bars are flocked by customers before and after basketball games and concerts at the arena. Area residents who work at Arco Arena could lose their jobs if the arena moves, Koop said.

"We want to keep the arena where it is, for a lot of reasons," Koop said. "If you put an arena in downtown Sacramento, you would be helping downtown. But at the same time, you could be destroying the economic environment in Natomas."

Both Natomas and the downtown railyards sit in Ashby's district. She didn't express support for either location.

She said she recognizes the arena brings much commerce to Natomas, yet she believes other types of development at the site could bring the same benefit. Ashby wants to see the same number of jobs and economic benefit brought to the area if the arena closes in Natomas and the land is used for something else, she said.

"All those things need to be part of the deal," she said.

A public hearing on the proposals is scheduled for Jan. 6. The arena task force has said it would present an analysis of the proposals on Jan. 21.

Natomas Chamber leaders realize downtown Sacramento needs to be improved and that something needs to jumpstart its economic engine. But Natomas businesses and residents are counting on that, too, Koop said.

"Something like this (new) arena can really help put us on the map and really help us revitalize this area," he said. "I think they're putting too much emphasis on the arena being the magic bullet that would turn downtown Sacramento around."

Photo of Ed Koop provided by the Natomas Chamber of Commerce. Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Ali Mackani: Cultivating possibilities

2010-12-15T02:09:56Z

Ali Mackani has made a career out of developing potential.

As a computer science engineer at Intel, people came to him with ideas and asked how to make them work. Mackani usually found a way.

In 2002, the Folsom resident and partners brought Sacramento a bit of high-tech fame by creating the first large-scale outdoor wireless fidelity or "wi-fi" network.

He created a buzz on Capitol Mall, where he opened his first restaurant, 55 Degrees. He then opened a bar, Lounge on 20, that anchors one of the trendiest corners in Midtown, 20th and K streets.

Now a team led by this ambitious 40-year-old entrepreneur is a top contender to develop a new arena in Sacramento. That possibility has left some wondering who Mackani is and how he got here.

"I'm not the guy that sits on the sidelines," Mackani said in an interview last week.

The road to this place has had interesting twists and turns, from the bustling streets of Shiraz, Iran, and the urban sea of humanity that is Mumbai, India, to Kansas and Northern California.

Mackani was born in 1970 in Iran, the oldest of four children. His entrepreneurial father operated an electrical supply store and a small restaurant in Shiraz. After the Islamic Revolution in 1979, his family sent him to live with relatives in India for a year. But he wasn’t comfortable in that country.

In 1984, Mackani's mother took all four children to live with family in San Jose, where resources and opportunities were better than India or Iran.

"They wanted to create a better life for us," he said.

His mother, who'd never worked outside the home, was suddenly working three jobs to put a roof over their heads. The 14-year-old Mackani got a job the first day he arrived to help his mother support the family. The only English they knew was "yes" and "no."

Their father stayed in Iran and was never able to provide financial support to the family.

"There are times I wish I had a father figure in my life," Mackani said. "I've been the father figure for my family, my siblings, since we moved here.

"Life does strange things. It depends on what you do with it and how you accept it," he said.

The family moved to Bay City, Mich., for a year and a half before settling in a very low-income duplex in Wichita, Kan. They learned English quickly on the job, in school and watching TV. Mackani grew his hair as long as he could to help him fit in and worked eight hours five to six days a week in restaurants. He did homework before school and at lunchtime.

"When you're in a survivor mode, you get things done," he said.

A typing class at Wichita Southeast High School led him to his career path. Fascinated by the IBM electronic typewriter, Mackani opened the machine and found "Intel" stamped on what was then a huge microprocessor. His teacher told him about the equipment and the two companies that made it. Mackani was so intrigued, he decided he wanted to study computer science in college and work for Intel.

After graduating high school in 1988, he put himself through Wichita State University. He initially worked at restaurants, then started a floor cleaning and buffing business at age 19 with $875 from an uncle. He recouped the loan the first week and cleaned floors two to three nights a week throughout the rest of college.

In his senior year, Mackani got his foot in the door at Intel doing research and a final report for a college project on motherboard transistor automation. He returned to Intel as a contractor after graduating from college in 1992. Two years later, he was hired full-time as a hardware and software engineer.

At Intel, Mackani said he was encouraged to learn, grow and change. He had a rare combination of engineering smarts and business sense. Mackani used that combination to help Intel find ways to create working business models for different types of technology.

He helped Intel integrate Internet use as an internal tool in the 1990s. He also developed an internal “human factors engineering” process to help build technology to better fit humans after working with an outside firm hired to do that for several Intel products.

Mackani was the director of human factors engineering for Intel when he left in 2002 to pursue his idea for the wi-fi network with support from Intel and Cisco.

But Mackani also left because he said he had an intense desire to take control of his future and use more of his creative energy. The same fear of losing control that had kept him from drinking and getting high with friends in high school pushed him to work for himself, he said.

"Those who are entrepreneurs – they really want the opportunity to showcase their abilities or try new things," he said. "It's very hard to do that in the corporate world."

Through his company, Corporate Information Exchange (CIE), Mackani provided high-tech consultation services to mid-sized companies and explored new technology and investment opportunities. He was a silent partner in two Folsom restaurants.

His first exposure to politics and Sacramento city government came in 2004, when CIE bid on a city project to implement wi-fi throughout Sacramento. The city gave the contract to a bigger company charging more but promising revenue to the city. The project failed, Mackani said.

"When the big boys come to town, they're not always the best option," he said.

When they’re not working, Mackani and his wife, Intel employee Lisa Watts, enjoy entertaining friends at their Folsom home.

He's also involved in local philanthropy. He and their children – Imani, 7, and Darioush, 9 – will appear this weekend in Pamela Hayes Classical Ballet's production of "The Nutcracker." Mackani has practiced three months for his role as the Mouse King. In May, he'll join two other local celebrities to impersonate the band Three Dog Night and sing at a benefit for My Sister's House at the Crest Theatre.

His love of food, wine and entertaining, and his restaurant background, led him to open his first restaurant in 2005. He recruited a New York chef and opened 55 Degrees at 555 Capitol Mall, at the start of what appeared to be a development boom for Capitol Mall.

Mackani and others thought development on the mall would help revitalize downtown. He said he still thinks the Capitol Mall is sort of the “Champs-Elysées” of Sacramento.

But the failure of John Saca's towers at 301 Capitol Mall and the Aura tower at 601 Capitol Mall, as well as the recession, hurt the restaurant, which he closed in late 2008, he said.

"Was it a little ahead of itself? Was it a little risky at the time for our city? Absolutely,” Mackani said. "In business, you have to learn not everything is going to go your way.”

He opened his next business, Lounge on 20, in summer 2008. The sleek, chic bar with artisan cocktails and gourmet fare has gained a loyal following.

Mackani believes in himself and his ideas enough that he took Mayor Kevin Johnson's request for proposals to build a new arena seriously. He'd already started talking about the arena with local developers before Johnson made the request last year.

Mackani knew he didn't have all the resources and expertise to pull it off himself. So he put together a team called the CORE and submitted what he considered a worthy proposal.

His idea to develop an arena at Westfield Downtown Plaza showed enough promise that the mayor’s task force ranked it as one of the top-three proposals last spring. And two task force members, real estate attorney Mike Kvarme and developer Larry Kelley, president of McClellan Park, left the task force and joined Mackani's team last month.

The proposal is being updated and may look very different when resubmitted to the city by Dec. 30. But it'll likely reflect what Mackani has created for himself in Sacramento: a niche seizing opportunities others may not see and taking them as far as he can – helping to develop the city's potential while at the same time developing his own.

"You never want to ask (later), 'Did I do everything I could do?' " he said.

New possibilities as arena task force reboots

2010-11-19T02:05:56Z

Mayor Kevin Johnson's arena task force resumed its work to get a new facility built in Sacramento Thursday – minus two members who've now thrown their expertise behind a runner-up proposal.

At the same time, the task force is opening the process to more developers after its top choice – a complicated three-way land swap submitted by developers Gerry Kamilos and David Taylor – didn't pan out.

The task force is accepting new proposals as well as updated versions from the first round of proposals submitted last December. The public is expected to get its first look at the contenders in early January, the group said Thursday in a press release.

In a surprise move, two task force members decided against rejoining the task force. Real estate attorney Mike Kvarme and developer Larry Kelley, president of McClellan Park, are teaming up with entrepreneur Ali Mackani and the CORE group as they consider updating a plan that originally proposed building a new arena at Westfield Downtown Plaza.

The task force identified that proposal as one of the three strongest plans to construct a new Sacramento Kings arena last March. Kvarme and Kelley felt Mackani and his team made the most sense.

"We felt the best way to get the process done was to join with the CORE group," Kvarme said. "In the interim, Larry and I both independently reached a similar conclusion, which is that a downtown arena serves the city's interests the best. And that a team like the CORE group, with some additional expertise, would be the most logical way to proceed."

They both believe adding their experience to the group isn't a conflict of interest because the task force was disbanded last spring, he said.

Ironically, Kvarme and Kelley once sat on opposite sides of the negotiating table. Kelley oversaw privatization of McClellan Air Force Base, and Kvarme represented Sacramento County in its nearly five-year fight against it. The two have been talking jointly with the CORE group only for the last few weeks.

Developer Gerry Kamilos said his Convergence group continues "working hard" on a new plan after their first bid to build an arena didn't meet city deadlines. He doesn't consider the move by Kvarme and Kelley to be a conflict of interest, he said.

"As a community, we need to pursue everything," Kamilos said. "I'm not concerned with who's on what team. We're all trying to achieve the best idea to ensure a new arena is built downtown."

Inland Real Estate Trust, which recently took ownership of the former railyards, is expected to submit something in lieu of Railyards developer Thomas Enterprises, which lost the property after defaulting on loans. However, the company wasn't quite ready to discuss any plans, said Dean Stermer, interim project executive for the railyards.

"We're still working furiously," he said.

The CORE group will first focus on choosing a viable downtown site that can be acquired in a way that makes financial sense. Westfield Downtown Plaza and the former railyards are two potential sites. But there are others, Kvarme said.

"My sense was, one of the first things somebody needs to do is tie up a site," he said. "We're going to try and put something together in a way we feel it can get done."

Arena proposal graphic provided by the CORE group.

Arena task force meets next week

2010-11-11T02:10:15Z

Mayor Kevin Johnson is reassembling his arena task force next week to consider next steps in the effort to get a new arena built in Sacramento.

Mayoral Special Assistant R.E. Graswich and other staff from the mayor's office expect to meet Nov. 18 with at least 10 members of the original Sacramento First Task Force. Details for the private meeting at City Hall were still being finalized Wednesday.

Graswich will update the task force on the status of a proposal from their chosen developer, Sacramento Convergence Holding LLC, led by Gerry Kamilos and David Taylor. The developers’ exclusive negotiating period with the city ended late last month after they were unable to produce a viable plan on schedule.

The discussions will consider whether the city made mistakes with the Convergence team, what those mistakes might have been and what a logical next step might be, Graswich said.

"We want to have a frank discussion about where we're at," he said.

City staffers have also said they will propose a way to move forward with the process to the City Council. But that might not happen until January.

None of the seven teams behind competing arena proposals will be there. Five teams, including Convergence, have expressed interest in still being considered.

Some teams are in the process of finalizing updates. Most are essentially the same plans they originally submitted.

Task force members may be especially interested in updates to two proposals they identified as runners-up to the Convergence proposal, Graswich said. One would be from Thomas Enterprises, which owned the former Union Pacific railyards until last month and also proposed building an arena on the adjacent city land. The other was a plan by Ali Mackani and a group called CORE to build the arena where Westfield Downtown Plaza is now located.

Thomas Enterprises' proposal is "problematic" because of the company's financial problems – it lost ownership of the 203-acre Railyards development site after defaulting on loans for the property, Graswich said.

"It just creates questions about their viability, really," he said. "But that proposal was on city property. So that proposal is still of interest."

On Tuesday, Johnson traveled to suburban Chicago to meet with Inland American Real Estate Trust, the new owner of the former Union Pacific railyards. Inland officials sounded "enthusiastic" about the possibility of constructing the arena on adjacent city-owned land, Johnson blogged after the meeting.

A report on next week’s meeting is expected to be released soon afterward.

Johnson is eager to get the task force working again, after the group made progress last spring with its first recommendations, Graswich said.

"Hopefully, we can regain some of that momentum," he said.

Graphic provided by Thomas Enterprises as part of its downtown arena proposal.

Arena stalled

2010-10-23T01:13:19Z

Arena plans submitted to the city last December will get a second chance after developers behind a complicated land swap didn't produce a viable proposal on schedule, a city official said Friday.

At least one of the teams behind the other six proposals is still interested.

The exclusive negotiating period granted to the Sacramento Convergence Team, led by developers Gerry Kamilos and David Taylor, ends Monday. At Tuesday's City Council meeting, city staff will propose spending the next few months determining whether any of the other proposals seem possible.

"It's now time to regroup and touch base with our stakeholders – the NBA, for the most part, and Maloof Sports and Entertainment – and determine how to move forward from here," Assistant City Manager John Dangberg said.

On Sept. 28, the Sacramento City Council voted against Mayor Kevin Johnson's suggestion to end the exclusive period early. Johnson made that proposal after the developers couldn't sell Cal Expo officials on their idea to move the state fairgrounds to Arco Arena and allow private development of the existing fairgrounds in a deal to build an arena downtown.

The council also gave the group a chance to submit an alternative proposal.

But the group failed to present any additional information to city staff by a deadline two weeks ago and notified the city that it would not present an updated plan before the negotiating period expires.

"We have to admit up front that we have yet to find a solution that works for all the key stakeholders," Kamilos wrote in a letter dated Oct. 20.

"We know now what each of these stakeholders, what their needs and limitations are," he added later. "The real challenge is how do we mesh all those wants and needs and limitations together into a plan."

The group will continue to work on an alternative, which could involve a request for a bigger chunk of city railyards land to develop downtown. The group hopes to submit another proposal in January, according to the letter.

NBA Commissioner David Stern said he's lost hope that the Sacramento Kings will get a new arena.

"My optimism on there being a new building has faded completely," he said during a media conference call Friday. "We really tried hard. The Maloof family has spent an enormous sum of money. People of goodwill – from Senator Steinberg to the governor to Mayor Johnson – have joined in, and frankly it wasn't – I guess – to be, because we were missing an essential party."

However, Stern said he'll watch to see what other ideas may come forward.

Jeff Baize of Brookhurst Corp. said his team, Natomas Entertainment Sports Center Partners, welcomes another opportunity to plan to build a new entertainment complex on 100 acres of city-owned land just north of Arco Arena. The team includes Citibank, which would structure the plan's financing.

The group chose that location because it has existing infrastructure, traffic wouldn't be a problem as it could be downtown, and funding would be more attainable. But they're not sure a plan involving the Natomas site would be considered, he said.

"It's our team's firm belief that the city is not interested in looking at any other sites outside of the downtown area," he said. "This would present a challenge for anybody interested in a site other than the downtown location."

Johnson believes the railyards are the best location for a new arena, Johnson's special assistant, R.E. Graswich, said Friday.

The city won't give up until a new arena gets built, Dangberg said.

"The city remains as committed as ever to finding a solution to bring an entertainment and sports venue to Sacramento that is befitting of this region," he said. "It is not easy to do in this economic climate – especially with a real-estate based solution, as the convergence recommendation was."

Graphic provided by Thomas Enterprises in its proposal to build a downtown arena.

Arena team gets more time

2010-09-29T04:00:07Z

The developers behind a proposed downtown arena will get another month to present an alternative plan after state fair officials pulled out of the deal, the Sacramento City Council decided Tuesday.

Cal Expo board members on Friday voted against being part of a three-way land swap to move the state fairgrounds to Natomas and allow private developers to sell the fair's current site in a deal to build an arena downtown.

The Sacramento Convergence team, led by Gerry Kamilos and David Taylor, is now scheduled to present a new proposal at the Oct. 26 council meeting — a day after an already-extended exclusive negotiating period between the team and the city technically ends.

"The only way we get things to happen is we stay at the table and make things happen," said Councilwoman Bonnie Pannell.

In a nearly two-hour workshop, the council had options to terminate the exclusive negotiating agreement Tuesday or at council meetings on Oct. 12 or 19.

Mayor Kevin Johnson argued for an earlier decision. Johnson said he was reluctant to let another month pass without reopening the process to other developers who submitted ideas in January and without discussing Arco Arena’s possible renovation with the Sacramento Kings’ owners and the NBA. A new proposal shouldn't be considered in the period set aside for their first plan, he said.

Arguing for a motion to reconsider the agreement in two to three weeks, Johnson said he thought it would weaken the city's position on any possible deal to "keep all our eggs in one basket." Johnson was also concerned Kamilos and his team won't deliver a full proposal in a month, after being unable to make their original proposal work in the agreed-upon time frame.

"What I'm saying is we have to acknowledge this team did not accomplish what they committed to earlier," Johnson said. "This is not what we originally voted on."

That motion failed 5-4. Councilman Steve Cohn, who will be visiting sister cities in China on those dates, made the original motion to hear the Kamilos team's new proposal and determine whether to end or extend the exclusive negotiating agreement on Oct. 26.

"I would ask we consider having us come back (in a month) to give staff a chance to get reports and options laid out and the Convergence team to flesh out the proposal," he said.

That motion was supported 8-1, with only Johnson voting against it.

Four weeks isn't likely enough time for the Kamilos team to submit an updated plan based on only two sites — Arco Arena, which the city owns, and 15 acres in the downtown railyards the city also owns, said Betty Masuoka, a former assistant city manager now working as project consultant for the city.

At the workshop, the developers laid out their most recent proposal to Cal Expo. Dan Martinez, president of VisionMaker Worldwide, discussed his company's existing plan for a 211-acre Arco Arena site under the three-way land swap.

The vision includes an event center in a park-like setting with retail and restaurants, similar to the Grove in Los Angeles, with a permanent midway and kids' amusement park. Arco Arena would be torn down. The site would not need exhibition space or as much livestock space as it would have if the fairgrounds were involved, and it would not include a theme park, said Martinez, one of the former Disney executives who started VisionMaker.

The team will bring back a new proposal "making it very clear" what they're asking the city for, Taylor said.

Local entrepreneur Ali Mackani, another developer who proposed an arena project early this year, said after the vote that he and the CORE group will resubmit their idea involving Westfield Downtown Plaza with more details in two or three weeks. The Convergence group hasn’t delivered on schedule, he said.

"Now you're allowing a plan to keep changing," he said. "It loses the authenticity of the original plan."

Cal Expo: No arena deal

2010-09-25T00:56:10Z

California Exposition and State Fair officials said no Friday to being part of an arena land swap deal.

At the end of a four-hour meeting, the board voted 7-2 against further study of a proposal by developer Gerry Kamilos and the Sacramento Convergence team to relocate the state fairgrounds to Arco Arena in Natomas and to develop the 350-acre Cal Expo site to help finance a new arena downtown.

Board members said they want proceeds from Cal Expo's development to benefit the state fairgrounds and the state, rather than a private company and an arena. The Cal Expo board has already spent too much time studying ideas to modernize the fairgrounds by helping to get an arena built, they said.

"We've got to finally come to our senses and get rid of this arena deal," said board member Steve Beneto.

The latest proposal would have turned ownership and operation of the fairgrounds and the annual state fair over to a private company, VisionMaker Worldwide. The company was founded by former Disney and Universal Studios executives. But a private equity firm, Makan Capital Group based in Abu Dhabi, United Arab Emirates, bought the company in 2007, according to the company's website.

Under the plan, Cal Expo officials and staff would have had creative control of the fair and ownership of the land. VisionMaker would have returned ownership of the facilities to the state after 30 years.

The board had been willing to consider a proposal to move the fairgrounds if the site was better and brought more revenue to Cal Expo than the existing one, board members said.

"We've been working on this for three years. We have explored one alternative after another," said board member Marko Mlikotin. "Our best interests are served by staying put."

Cal Expo staff have told the developers repeatedly that Arco Arena wouldn't work for the fairgrounds and asked them to propose other locations, Cal Expo General Manager Norb Bartosik said.

The 184-acre Arco site is too small and loses Cal Expo's visibility because it can't be seen from highways. Existing neighbors have also expressed opposition to the fairgrounds relocating there, said consultant Andy Plescia.

But the $400 million arena project is not dead, Kamilos said.

He and Sacramento developer David Taylor and the other stakeholders, which include the city, VisionMaker and the Maloof family, will come up with another strategy that could involve developing the Arco Arena site to help finance building a new arena in downtown's railyards. The Convergence team is considering "a number of options" and will discuss alternatives at a workshop with the Sacramento City Council Tuesday.

The Maloofs, who own the Sacramento Kings, will now work on alternatives to get an arena built.

“We must continue to work hard to find a solution," co-owner Joe Maloof said in a prepared statement late Friday afternoon. "We look forward to hearing what are the next steps and options."

Cal Expo officials must focus on developing or selling some of the existing land to rebuild the fairgrounds at its current location, said board member Paul “Rick” Stacey.

"Maybe that is a public-private partnership," he said. "But on our terms."

Suzanne Hurt is a staff reporter for The Sacramento Press.

Arena, Railyards projects teetering

2010-09-24T01:35:28Z

Following several setbacks, Sacramento Mayor Kevin Johnson said Thursday things aren't looking good for downtown's two biggest development projects, the Railyards and the arena.

A downtown arena proposal involving a complicated land swap and the state fairgrounds has only an outside chance of happening. At the same time, it would be in the city's best interest if a suburban Chicago real estate investment company forecloses on Thomas Enterprises and its 244-acre Railyards project, he said in a press conference at City Hall.

Johnson said he hopes California Exposition and State Fair officials will postpone a decision at a Friday board meeting and spend another month evaluating a deal for a new fairgrounds and arena that was recently reworked by developer Gerry Kamilos and the Sacramento Convergence team.

If the deal falls apart, the city would consider other developers' ideas to build Sacramento a new arena and take another look at renovating Arco Arena so the Kings could continue playing there.

"We always felt it was a long shot," Johnson said. "As a city, we didn't want to be hanging on too long to an idea that couldn't come to fruition."

The mayor said he hopes Inland American Real Estate Trust will initiate a "friendly foreclosure" on Georgia-based Thomas Enterprises next month. The developer has been meeting with its primary investor for months in an attempt to renegotiate $187 million in defaulted loans.

If they take over the project, Inland officials have promised to meet financial obligations to protect federal and state funding and jobs. But Inland may create a new plan to develop the historic railyards, he said.

Inland officials and Thomas Enterprises Vice President Suheil Totah could not be reached for comment.

The Sacramento City Council previously agreed to exclusively negotiate on an arena project with Kamilos until the end of October. That should be enough time to determine the plan's financial feasibility and to see if Cal Expo officials are interested, Johnson added.

Railyards photo by Eric Whalen. Photo of Mayor Kevin Johnson by Suzanne Hurt, a staff reporter for The Sacramento Press.

Cal Expo's future, arena deal considered Friday

2010-09-23T02:17:18Z

A potentially pivotal meeting on an arena land swap proposal and the state fairgrounds' future is set for Friday, when California Exposition and State Fair officials may decide on the project's fate.

The agency's board of directors is expected to either vote on selling Cal Expo and swapping that fairground site for one in Natomas or postpone a decision to allow time to consider developer Gerry Kamilos' latest proposal, which includes privatizing operation of the new site.

Cal Expo's board of 10 volunteer directors must decide how to upgrade the aging facilities for the state fair and events held by trade groups and others on the grounds. Richard Cuneo, Operations and Planning Committee chair, said his decision will be guided by the need to protect taxpayers' investment while improving the 42-year-old fairgrounds.

"My intention is to get the best arrangement for the taxpayers of the state of California, and secondly, to support, enhance and expand the state fair on an annual basis," said Cuneo, a Sonoma resident and longtime board chairman for Sebastiani Vineyards & Winery. "In order to increase the viability and basic economic life of the fair, we need to continue to focus on the year-round acceptance of this property."

The Cal Expo board will hold a joint public hearing at 9:30 a.m. with the State Fair Leasing Authority prior to an 11:30 a.m. board meeting.

Consultant Andy Plescia will present his team's analysis of the original proposal. After determining the deal was not in the state fairgrounds' best interests, Plescia is recommending that Cal Expo stay put and sell part of the land to help finance the site's modernization.

Previously, Plescia served as the city of Sacramento's economic development director and as deputy director for the Capitol Area Development Authority. As a consultant, he's worked on a development project with the Madera District Fair in the Fresno area and with the state of California on the Cow Palace Project in Daly City, where he recommended how to develop some of the property, said Brian May, Cal Expo’s deputy general manager.

Following Plescia's presentation, Kamilos will formally present a modified proposal submitted earlier this month and ask the board to extend a negotiating period set to expire Saturday.

If the board decides to approve the land swap or remain in place but sell part of the land, the matter would be passed on to the governor's office. The State Fair Leasing Authority and state agencies such as the Department of General Services, Department of Finance and the Department of Food and Agriculture would have to sign off on the plan.

Cal Expo officials can't sell property without legislative authorization and the governor's approval. State Senate President Pro Tem Darrell Steinberg of Sacramento has agreed to introduce such legislation. The legislation would be reviewed in at least one legislative hearing and must be approved by the Senate and Assembly, before going on to the governor.

In May, Gov. Arnold Schwarzenegger included Cal Expo on a list of state properties to be sold to help solve the state's financial problems. Schwarzenegger has said he wants to see the land swap process completed before moving forward on selling Cal Expo, said Cal Expo's General Manager Norb Bartosik.

Cal Expo's board has 11 seats. All but one are filled. Nine are appointed by the governor with the consent of the state Senate. One is appointed by the Assembly speaker and another by the Senate Rules Committee.

Board members include Chairman Gil Albiani, an Elk Grove real estate broker; Vice Chairman Corny Gallagher of Fair Oaks, senior vice president of agribusiness for Bank of America; Cuneo; Rex Hime of Loomis, president and chief executive officer of the California Business Properties Association; and Amparo Pérez-Lemus of Davis, who has been a vice president with Bustos Media, according to Cal Expo’s website.

Other board members are River City Communications President Marko Mlikotin of Folsom; Orange County Farm Bureau executive director Kathleen Nakase of Huntington Beach; Sacramentan Steve Beneto, owner of Beneto Inc., which sells and leases jets worldwide from a West Sacramento base and former owner of Beneto Bulk Transport, which transported bulk petroleum nationwide; Bert Johnson of Los Gatos, who founded Good Samaritan Hospital; and Paul Stacey of Visalia, vice president of finance and administration and chief financial officer for Visalia Citrus Packing Group.

Albiani could not be reached for comment.

Representatives of Steinberg and Assemblyman Dave Jones of Sacramento — both nonvoting, ex-officio board members — are expected to attend Friday's meeting.

The board's decision will consider what "makes the most sense" for the state fair and allows Cal Expo to continue to be a "good neighbor," Hime said.

"We are on 42-year-old grounds that are showing their age. We are faced with ADA and seismic-safety issues," he said. "I think we're just looking for what's good for the state, the fair and the people of the region."

California State Fair photos by Kati Garner.

Fair officials give arena proposal time

2010-08-18T01:05:50Z

Developer Jerry Kamilos has asked state fair board officials to give him 30 more days to develop elements of an arena land swap proposal that would relocate the fairgrounds to Natomas, a state fair official said Tuesday.

Kamilos, who is proposing to build a downtown arena, asked the California Exposition and State Fair board late last week to postpone releasing a consultant's report on his proposal to sell Cal Expo and swap that fairground site for the Arco Arena site until Sept. 17, said Cal Expo Deputy General Manager Brian May.

Cal Expo officials had planned to release the report Tuesday. Kamilos is requesting that they consider additional information before finalizing the report.

The developers need more time to provide a more detailed cost estimate and information on how the state fairgrounds would fit in Natomas, as well as on transportation and circulation plans, minimizing impacts on neighbors, public forums and other needs, Kamilos said.

"It made more sense to make sure the concepts are fully defined and analyzed, so the board and public has the most up-to-date and accurate information," he said.

Photos by Kati Garner.

Arena plan moving forward

2010-07-09T02:56:13Z

A few more details have emerged as part of an arena and land-swap plan currently being considered by city and state fair officials.

A plan laid out by developers Gerry Kamilos and David Taylor calls for mixed-use private development of city-owned railyards land and the current state fairgrounds site. That development would help finance a $400 million sports and entertainment complex downtown and new fairgrounds in North Natomas, according to documents the city released late last week.

The "Sacramento Convergence" development team, which includes Macquarie Capital, would invest $600 to $700 million in private equity and debt in the project. The developers also propose other funding mechanisms, Kamilos said Thursday.

"The city and the state are not in a position to invest anything into these properties," he said. "The idea is to have the private sector come in and provide the capital to increase the value of those properties that both the city and state would benefit from."

Financing is proposed to come from land sales, parking fees, lease revenue, special districts to collect sales and property taxes from the properties, and bond proceeds generated by setting up tax increment districts, refinance districts and bond districts, Kamilos said.

"All the elements have been done before," he said. "It's just been in different configurations."

The team proposes to build a new Sacramento Kings arena that would anchor a railyards complex containing 500,000 to 600,000 square feet of retail, office and hotel space; 100 to 150 residential units; at least one parking garage with 2,200 to 3,000 spaces; and possibly an urban entertainment facility designed by former Disney executives.

As proposed, the 19,000-seat arena would measure roughly 375 feet by 475 feet and be 140 feet high, encompassing 750,000 to 800,000 square feet. The Kings or another professional basketball team would be the lead tenant. The plan is being worked out with the National Basketball Association and the Kings' owners, the Maloof family, who would sign a 30-year lease for the new arena.

"The updated numbers reflect quite a bit of analysis that's been done to date," Kamilos said. "But we still have quite a bit of technical work to do to solidify all the numbers."

The building would be equipped to host concerts, circuses and other events, including professional hockey games.

The Kamilos group is asking the city to donate 9.5 acres of railyards land for the project. The arena and parking structure, which would be shared with a future regional transportation center, would be built on city land in a public-private partnership with the city. But the remainder of the development at the site would be private.

The land is located between the Sacramento Valley Station and Thomas Enterprises' Railyards development. The historic train depot would be linked to the arena with an outdoor plaza serving as a gateway to the arena.

The plan also calls for the sale of 350-acre Cal Expo and swapping that site for one at the Arco Arena site, along with private, mixed-use development of the current state fairgrounds, which would need the approval of the California Exposition and State Fair board.

The developers are proposing to sell or auction the Cal Expo land. That land would be expected to be developed concurrently with an arena and new fairgrounds. However, the state fair would be held at the current site until new facilities were operational, developers said.

One possible concept for the Cal Expo site's development would include 4,900 residential units on 260 acres, a mixed-use retail and residential area containing 210 units and 340,000 square feet of retail on 35 acres. The concept includes 1 million square feet of office space in buildings averaging three stories on another 35 acres, and 20 acres for recreation and elementary school needs, according to the plan.

Money generated by land sales would be used to help pay off debt.

State legislation would be needed to approve the sale of the state fairgrounds for private development. Draft legislation is being created by a team including representatives from the developers, NBA, Maloofs, city, state and Cal Expo and would be presented to the state legislature before Aug. 31, Kamilos said.

The project would benefit the city and state by using private investment for the costly entitlement process that would enable the two sites to be developed, Kamilos said.

"By partnering with the private sector, the public sector entities will actually gain more than if they disposed of the properties as they are in today's market,” he said.

The information provided in the developer's official proposal and the complex plan has just enough detail to help the city and developers make sure the concept works and see if the primary stakeholders, the NBA and Cal Expo officials, are also on board, said Betty Masuoka, a former assistant city manager temporarily managing the project for the city.

A project parameters agreement is now being created for the next phase of work, where the developers and city staff nail down revenue sources, site plans and environmental and technical concerns.

"I think it's important people understand we're moving forward and we're making progress," she said. "It's not being put on a back burner."

Suzanne Hurt is a staff reporter covering business and development for The Sacramento Press.

Tentative arena timeline

2010-04-30T03:11:49Z

Sacramento Convergence LLC Arena Proposal
Tentative Timeline

Arena developers, led by Gerry Kamilos of the Kamilos Companies and David Taylor of David S. Taylor Interests, have presented city and state officials with a preliminary schedule for their plan. Key dates include:

• Arena Proposal, May 27, 2010
Developers must turn in the formal sports and entertainment complex proposal to city. The plan calls for developers and Australia-based investor Macquarie Capital to form a special-purpose entity to partner with city and state on performance-based infrastructure project.

• State Exclusive Negotiating Agreement, June 15, 2010
Developers hope to start negotiating to buy the 350-acre state fairgrounds from the California Exposition and State Fair board and to help arrange the fairgrounds' move to the Arco Arena site in Natomas.

• Legislation, Aug. 31, 2010
State legislation would need to be passed to allow the sale of Cal Expo for private redevelopment and to set up funding for new, relocated fairgrounds. Special state legislation may be needed for other parts of the proposal, including creation of one or more tax increment financing districts or other funding mechanisms so the city could help fund other public facilities or infrastructure to support arena.

• Arena Complex Construction, March 31, 2012
Developers hope to begin construction on the arena, which would be integrated with a new regional transportation facility.

• Cal Expo Phase I Construction, March 31, 2012
New fairgrounds construction could begin once the city provides a construction easement for its 184- to 185-acre Arco Arena site. Only 163 acres are available for development due to existing roads.

• Land Exchange, June 2, 2014
Sacramento Convergence LLC would take title of the Cal Expo property. The city would donate railyards land for the arena and sell Arco Arena site to the state at less than fair market value, in exchange for 75 percent of Cal Expo redevelopment profit going to the arena complex. Developers would pay off the Maloofs' $68.5 million city loan or offer collateral.

• Arena Operational, June 2, 2014
Developers expect Sacramento Kings to vacate Arco Arena and the new arena to open, ahead of the NBA season starting in the fall.

• Cal Expo Phase II Construction, June 2, 2014
The second phase of fairground construction could begin after additional funding is secured. The state fair would held at Cal Expo on Exposition Blvd. until a new facility opens.

• Cal Expo Operational, June 2, 2015
New grounds projected to be ready to open for the 2015 California State Fair.

Information provided by Sacramento Convergence LLC and city of Sacramento.

Cal Expo not yet part of the deal

2010-04-28T04:38:43Z

The sale of Cal Expo and the swapping of that fairground site for one in Natomas — proposed in a plan to build a new Sacramento arena downtown — are far from a done deal.

While the Sacramento City Council agreed at its meeting Tuesday to enter an exclusive negotiating agreement with the developer, a detailed look at the feasibility and economics of such a move has just started for Cal Expo.

On Friday, consultants will present the California Exposition and State Fair board with the first report in an analysis encompassing the arena proposal from developer Gerry Kamilos and the Sacramento Convergence LLC. The consultants will also come up with alternatives for upgrading and expanding the current state fair site.

But Cal Expo officials and their consultants — Andy Plescia of A. Plescia and Co., Gruen Gruen & Associates, and RCH Group — don't necessarily agree with some of the projections provided by the developers.

For starters, there's the value of the land that Cal Expo sits on. The arena developers indicate they believe the value of Cal Expo to be nearly $200 million, or $570,260 per acre, if all 350 acres are sold and privately developed, according to the consultants' report.

Land values will be vital for negotiations in such a complex proposal, which calls for the Kamilos group to buy and develop the Cal Expo site and for the fairgrounds to move to the Arco Arena site after that North Natomas property is donated to the state. Agreeing on what these sizable properties are worth, or on the costs of relocation or renovation, may be especially difficult with the current state of the real estate market.

The land value estimates included in the Convergence proposal rely on comparable real estate sales data, which Cal Expo officials and consultants say is not enough to forecast the value of the land.

That data doesn't take into account the unique features at Cal Expo or the value of the land after it has been redeveloped. Whether parcels are sold for a hotel, office buildings, retail or housing helps determine its value, said Cal Expo Deputy General Manager Brian May.

"You can't appraise property without a plan," he said. For that reason, Cal Expo officials have never had the state fair site appraised.

However, the arena proposal also offers to give Cal Expo 25 percent of the difference between what Cal Expo sells the land for and what it sells for after the fairgrounds property goes through the entitlement process and is resold in parcels.

The consultants working for the state fair board are now evaluating the arena proposal, the practicality of moving the fairgrounds, the viability of using the Arco Arena site, and the possibility of staying put but selling or leasing some land for private development to finance state fair improvements.

The Convergence group also estimates that expanding and improving the existing fairgrounds site would cost $207 million. Cal Expo officials have not previously studied such a cost, May said. That is now part of the consultants' work.

Over the next month, the consultants plan to identify two or three alternatives for expanding the fairgrounds at the present site. The full analysis is expected to be finished this summer. The Cal Expo board will then consider what would be in the state fair's — and taxpayers' — best interest, May said.

The Convergence group has set August as the target date for state legislation related to the proposal for the $400 million, 19,000-seat arena.

California State Fair photos by Kati Garner.

Developer signs exclusive arena agreement

2010-04-23T00:19:42Z

The city of Sacramento is one step closer to selecting the Kamilos "Sacramento Convergence" group to build a new arena in the downtown railyards.

Both sides met Thursday morning, and, according to an assistant city manager, John Dangberg, Gold River developer Gerry Kamilos signed an exclusive right to negotiate (ERN) document. The City Council will be asked at its April 27th council meeting to consider entering into the agreement with Sacramento Convergence Holding LLC, the group headed by Kamilos.

The agreement comes five weeks after the council asked staff to begin talks with the group about its proposal to build a sports and entertainment center at the downtown railyards. Kamilos is partnering with Sacramento developer David Taylor and two investment companies on the project.

"What we're doing is entering into an exclusive right to negotiate with the Convergence group on the entirety of their proposal," Dangberg said.

The developer is asked to sign the agreement first to ensure that no changes are made to the previously-announced proposal, before the council agrees to it and authorizes city staff to sign it next Wednesday. However, an official proposal must still be submitted to the city, Dangberg added.

In January, the Kamilos Group unveiled plans to build a 19,000-seat sports and entertainment center next to the city's historic train station to replace Arco Arena as the home for the Sacramento King's. The plan was worked out with the Kings' owners, the Maloof family, and the National Basketball Association.

Under the plan, the Kamilos group would buy and develop the 360-acre Cal Expo site, which has been the grounds of the California Exposition and State Fair since 1967, and the Maloofs and the city would give Arco Arena and 133 acres of land in Natomas to the state for a new fairground.

The Kamilos group has also asked the city to donate 9.5 acres of railyards land that is currently embroiled in arbitration due to a dispute over its value with railyards developer Thomas Enterprises. A court arbitrator's decision on its value is due by Monday.

The agreement calls for the city and Sacramento Convergence to negotiate exclusively on the project for four months. The Kamilos group had submitted a proposal to a task force created by Mayor Kevin Johnson, but not to the city. The developer now has 30 days to submit a more detailed, formal proposal, which would include a detailed description of the project and the financial plan.

The city will concentrate on analyzing the financial viability of the proposal for the next four months. City staff could need as much as a year to determine the project's feasibility.

At the end of four months, the city could extend the ERN or enter into a project implementation agreement with the developer. The City Council must decide whether to enter into binding contracts with the developer, Dangberg said.

Kamilos did not return phone calls seeking comment.

Photo by Kati Garner.

Arena task force begins reviewing proposals

2010-02-05T06:21:55Z

Sacramento Mayor Kevin Johnson's arena task force will focus on giving all proposals a fair hearing over the next four weeks, an arena team leader said Thursday.

Four task force subcommittees on finance, transportation, site evaluation, and business and community impact will collect more detailed information from the development teams that have pitched seven arena options. The subcommittees will also consider renovating Arco Arena, the current home of the Kings, and a previous proposal to build at Cal Expo, said Chris Lehane, co-chair of the Sacramento First Task Force.

Subcommittee work will not be public. The information gathered will be used to create a scoring matrix to weigh the proposals, and the scoring matrix will be released to the public, he said.

"We're going to be kicking the tires pretty hard on this," he said at a press conference Thursday at the Citizen Hotel.

Lehane unveiled eight priorities created during the task force's first phase that will be used during the evaluation process:

• No Direct Taxes: Other potential revenue sources, including tax increment financing and fees on "tourists," will be considered;
• Economic Impact: Speedy creation of work for local construction companies and construction jobs and long-term economic benefits;
• Full Loan Repayment: Maloofs must address their outstanding $68.5 million city loan by paying it back in a lump sum or payments, through equity in a new facility or in another way;
• Regional Contribution: Financial contribution to construction costs, possibly through event ticket fees but not likely to come from surrounding towns or the county;
• Community Benefits: Could include a labor agreement, affordable housing, environmentally sensitive construction, cultural contributions and more;
• Minimize Environmental Impacts, partly with a focus on public transit;
• Fair Share for Use of City Land: "Given that the NBA and/or the Kings will likely seek a controlling interest in the facility, any facility developed as a true public-private partnership ... must ensure that the team/league pays its fair share," determined by the level of public support, according to a document Lehane provided outlining the priorities. The amount the public is compensated must be adjusted for inflation, Lehane said.
• No funding from the city's general fund.

Lehane would not respond to reports that the National Basketball Association is upset about comments he made on the task force blog Tuesday. He called the NBA's previous attempts to get an arena built here "two air balls" and made other comments in a post asserting that the NBA's support for one arena proposal doesn't guarantee that plan will be adopted by the task force or the city.

Several Sacramento City Council members were also upset about the comments and felt he was speaking on behalf of the city.

"Maybe I should have said 'two fumbles.' Maybe I should have said 'two strikes.' But I said 'airballs,' " he said Thursday.

Lehane also said he recognizes the task force is a group of "citizens" attempting to represent the public in an effort to get an arena built as quickly as possible.

"We're not the City Council," he said.

While Lehane lives in San Francisco and another task force member lives in Los Angeles, nine others live in Sacramento and the other member lives in Stockton, he said.

Lehane said he was recruited to the task force because he has no pre-existing relationships in Sacramento or any vested interest in a particular outcome.

"That allows me to ask the tough questions," he said.

Councilmembers, NBA upset over arena task force comments

2010-02-04T05:53:04Z

Sacramento City Council members and the National Basketball Association are angry or unhappy with comments made Tuesday by the mayor's arena team leader.

Several council members are upset after Sacramento First Task Force co-chair Chris Lehane seemed to be speaking on behalf of the city when he called the NBA's previous attempts to get an arena built here "air balls" and made other comments on the organization's website blog Tuesday morning.

Council members Ray Tretheway and Rob Fong responded to Lehane's comments at the end of Tuesday night's City Council meeting.

"I was terribly embarrassed by the disrespectful message that publicly humiliated the commissioner of basketball that came out of Sacramento First," said Tretheway, whose district includes Downtown, proposed as one potential location for a new arena. "The NBA officially has been a great partner with the city — a longtime partner."

At least two other council members privately said they were upset over the comments, he added Wednesday.

NBA Commissioner David Stern and consultant John Moag, who owns the sports investment banking firm Moag & Co., spent two years working on a plan to build the new arena at Cal Expo. Three weeks ago, Moag and Stern, together with the Maloofs and local developers, pitched a new plan to build the arena in the Downtown railyards.

Mayor Kevin Johnson, once an NBA star, formed the volunteer task force three months ago to expedite development of a new arena to spur the city's economic growth — which he has identified as top priorities. Johnson has said he'd like the arena built Downtown and that the railyards would be one possible site. While playing for the Phoenix Suns, he saw Phoenix get revitalized after he helped bring an arena to that city's downtown.

Johnson recruited task force co-chair Lehane, a San Francisco political and public relations strategist who was dubbed one of the "masters of disaster" for his work controlling damage during President Bill Clinton's administration. Lehane is volunteering on the task force, as are 11 others, who work in business, finance, politics, development and labor.

Tuesday night, Fong said the task force's efforts should not be disregarded. However, he, Tretheway and other council members don't like the way Lehane's comments seemed to be representing the official city position.

“I do think lines get crossed when they pretend to speak for the city of Sacramento because it is a volunteer effort," Fong said. “If at some point, if the city of Sacramento is to be the lead agency, so to speak, on arena efforts, then it really should be the city of Sacramento that’s speaking on its own behalf.”

Lehane is expected to discuss the start of the task force's four-week proposal-review process at a press conference at 11 a.m. Thursday at the Citizen Hotel, 926 J St.

His comments that upset council members were made Tuesday in a blog post, where he explained the NBA's support for one of seven Sacramento arena proposals doesn't guarantee that plan will be adopted by the task force or the city.

The NBA and other development teams have been "lobbying public officials" and "putting out their spin." But the sports and entertainment center task force is just starting to evaluate the proposals and doesn't want to "give the public the bum's rush," Lehane blogged.

“Since 2006, the NBA has ‘endorsed’ two other proposals that never came to fruition. Just because a deal may sound like a lay-up to the NBA doesn't mean it is a finger roll for Sacramento," he wrote. “Despite well-meaning work over the years, the NBA has shot two air balls in its past efforts — the city needs to make sure that this process results in a slam dunk for the public.”

Lehane's comments were later released to reporters. On Tuesday, Tretheway and Fong spoke to NBA representatives, including someone working for Moag. Those representatives "confirmed how upset the NBA was," Tretheway said.

The NBA and Moag did not wish to respond publicly to Lehane's comments.

"We're not going to comment," said Karen Skelton of the Boston-based public relations firm Dewey Square Group, which represents Moag and the NBA.

Johnson didn't respond to Tretheway's and Fong's concerns at the council meeting. Earlier that day, neither he nor his staff would discuss Lehane's comments or any lobbying that has been going on.

But Jeremiah Jackson, a task force project coordinator, said lobbying on behalf of certain proposals won't change the arena team's mission as the task force begins weighing all the proposals.

"We know the NBA will support a deal that works for them," he said. "But we want to make sure Sacramento gets behind a deal that works for us."

The NBA is a partner in a plan spearheaded by developer Gerry Kamilos. The NBA and Moag are negotiating on behalf of the Maloofs, who own the Sacramento Kings franchise and its current home, Arco Arena.

The plan proposes building a 19,000-seat sports and entertainment arena at the Downtown railyards on land donated by the city. That project would be financed in part by the group's ability to buy Cal Expo and developing a mixed-use, master-planned neighborhood there, Moag said. The group also proposes the city and the Maloofs turn Arco Arena and the adjacent land over to the state for the new fairgrounds, and that the city forgive a $68.5 million loan to the Maloofs.

Tuesday night, council members directed the city manager's office to draft a letter for the council "to reaffirm how much we value the partnership and long-time support of the NBA to have an NBA team in Sacramento," Tretheway said Wednesday.

Development teams will make half-hour presentations to the task force in two weeks. The task force is expected to make recommendations to the mayor on March 11.

Vote for your preferred location for a sports and entertainment arena at sacramentofirst.org.

Suzanne Hurt is a staff reporter for the Sacramento Press. Sacramento Press reporter Kathleen Haley contributed to this report.

NBA proposes Sacramento arena deal

2010-01-16T04:40:28Z

The ongoing drama over a new Sacramento arena was kicked up a notch Thursday when a consortium of investors and local developers, together with the NBA, proposed a complex real estate deal involving the Railyards, Cal Expo and Arco Arena. Whether or not that deal eclipses all the other proposals on the table remains to be seen.

But regardless of which arena proposal ultimately becomes reality, it will be a game-changer for Sacramento.

Just how much depends on which of seven proposals the city and the Sacramento Kings' owners agree on. The Maloof/NBA proposal involves real estate deals that would lead to Cal Expo being sold to private developers for a mixed-use neighborhood, Arco Arena and adjacent land being transformed into the new state fairgrounds, and a sports arena being built on donated city land adjacent to the train station.

The backers of all seven proposals made brief pitches to more than 120 people at a sometimes raucous, fairly informal open house held Thursday night in the lobby of City Hall. But the biggest surprise came after the event organized by Mayor Kevin Johnson's arena task force, when developers and investors behind a complex real estate proposal held a separate press conference at the Citizen Hotel.

Representing the National Basketball Association at the second press conference, John Moag, who heads the sports investment banking company Moag & Co., outlined a complicated plan spearheaded by developer Gerry Kamilos.

"I think we can all agree we have a building that needs to be replaced. The real question has always been, 'How?' " Moag said. "We came with the assumption we were not going to raise new taxes. That made for a very difficult and complicated scenario."

The NBA has become a partner to negotiate for the project on behalf of the Maloofs, which own the Sacramento Kings franchise and its current home, Arco Arena. The city owns land around the arena. The Maloofs did not attend the press conference.

Kamilos, developer David Taylor and two investment companies would form a private consortium that proposes building a 19,000-seat sports and entertainment arena adjacent to the historic train depot on land donated by the city of Sacramento. That project would be financed in part by the group buying Cal Expo and developing a mixed-use, master-planned neighborhood there. The group also proposes the city and the Maloofs turn Arco Arena and the adjacent land over to the state for the new fairgrounds, Moag said.

The Maloofs would contribute $300 million to the new arena, he said. However, the proposal also calls for retiring a $68.5 million city loan to the Maloofs. The Kings would sign a 30-year lease. The private group would own and operate the new sports and entertainment arena for 30 years, then turn it over to the city.

Proponents of other projects proposed building at a variety of locations, from the same city-owned railyards land to the east end of Downtown Plaza, the Sacramento River waterfront in the Docks Area and Arco Arena. Some proposed funding mechanisms, but not all.

Thomas Enterprises, which is developing the former railyards, proposes building a sports and entertainment center in the same city-owned railyards location as the third phase of the current regional transportation center project. Under that proposal, the historic train depot would serve as the lobby and ticketing center for the arena, as well as the future transportation center. A passenger concourse would wrap around the side of the arena to the relocated tracks and a multi-level, shared parking garage would be built.

A performing arts center is proposed for a new fourth phase. The proposal would decrease the cost of both the transportation center and the arena and allow the use of transportation funding not available to other projects, Thomas Enterprises Vice President Suheil Totah said.

"It will help establish the historic depot as the Grand Central Station of the West," he said at City Hall. "This event center is the next logical step to the redevelopment of the railyards and the revitalization of Downtown Sacramento."

Graphic provided by Thomas Enterprises.

Other proposals include:

— Natomas Entertainment Sports Center Partners, led by Jeff Baize of Brookhurst Corp., proposes building a new entertainment complex on 100 acres of city-owned land adjacent to Arco Arena. The complex would include a mixed-use neighborhood emphasizing green technology and re-purposing Arco Arena as a power generation facility. "That site has been working from a traffic and infrastructure capacity," he said.

— Matt Haines of M & M Group and owner of 33rd Street Bistro presented a plan developed more than a decade ago for then-Mayor Joe Serna. Haines proposes building a sports and entertainment center on the waterfront in the future Docks Area. A location near Miller Park would bring needed development to the riverfront and nearby Capitol Mall, and encourage the use of Broadway and R Street as access routes, he said. "Our river will come alive like never before," he said. He proposes financing the project through equity seat rights, or selling individual seats in the center, which Haines said has raised $200 million for UC Berkeley.

— Ali Mackani, who owns Lounge on 20, and a group called CORE propose redeveloping the east end of Westfield Downtown Plaza into a retail and entertainment district, with two floors of retail and an outdoor public park on the third floor. "Our downtown lacks energy," Mackani said. "We don't have a destination. We need to make sure our core is strong. We have to do a better job in creating an attraction for everyone."

— Rick Tripp of Tripp Development also sees the east end of Downtown Plaza as the best location. This proposal focused on financing, rather than design. Tripp proposed private financing and no requirement for publicly owned real estate — or compensating taxpayers for real estate at market rate, he said.

— Doug Tatara proposes building an entertainment complex including a sports and entertainment arena, a California theme park and a monorail connecting Cal Expo to downtown. He proposes raising money for the arena through the recruitment of 25 corporate sponsors who would have advertising contracts with the arena.

The mayor's task force will visit proposed locations on Feb. 18 and conduct a review of the proposals with each group on March 4. The task force will make recommendations to the mayor on March 11.

Railyards photo by Eric Whalen.