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Report: Arena could bring $7 billion

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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 committee. 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. 

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