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.

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Kings owners, NBA await arena next steps

Developers present arena plan details