Sacramento - New Arena Plan

[innov8]

Originally Posted by neuhickman79

I'm glad you're not voting since this is not a Yuba City issue!

I second that!!! There are a lot of misinformed people who do not under stand
what it takes to run an arena... $15 to $20 million is just the arena, insurance
is a big one) then there is paying for the players (a lot if you want
good ones) the sales staff and marketing and the overall daily
operations to keep it running smooth. Nameing rights helps foot these costs.

[foxmtbr]

Yes, the Kings player and staff salaries come in at a total of about $61 million is what I've heard.

[joninsac]

if we approve the tax, we will actually be paying for 100% of arena construction costs and 45 million parking garage cost. The maloofs pay zip, but they set aside 20 million for maintenance and pay off a loan early. Also, kings agree to rent the facility for 30 years at approx 4 million/year.

It's really a matter of semantics. Here's the nuts and bolts - the arena and surrounding infrastructure will be built using the funds generated by the sales tax increase, with a cost between $470 million and $540 million. The Maloofs will give back to the city and county about $4 million per year for 30 years, in addition to the initial pool of $20 million, for a total of about $140 million, which is where the 26-30% number comes from. You can call it rent if you want, but it's really the Maloofs contribution paid in 30 $4 million increments.

[bennywah]

wow, so yes the city forks out alot, but let me see, if i currently spend $15 at target on some stuff it comes out to $16.16, with the increase it would be $16.20, or i spend $100 i spend $107.75, with the increase oh my $108 dollars, and for tha whopping increase the city of sac gets an arena sports district which helps spur development of homes which creates property taxes, parks, retail which generates more sales tax dollars and ultimately will bring in more money then the intital public contribution of $500 + million, not too mention job opportunities in construction sales, new offices.

The big picture is that the public helps spur aloong everything from hotels to new retail, to helping feed the poor, without an arena, a sports franchise and a weaking housing market the growth of sacramento slows or stalls and who knows how many more years it'll take to re-gain the momentum.

We need to look at this as an investment in the potential for downtown and the city and surrounding counties in the opportunites which will follow becuase of the arena, and the $2million the maloofs may profit per year from running the arena doesn't compare to the tax revenue from housing and retail over many more years than the arena will be around and in the visible presence of a new and vibrant area to downtown.

Let the voters decide but lets look at the big picture and realize this is an investment into downtowns future and yeah the maloofs do benefit, their business men, but the city after a few years is who will really reap the rewards!!!

[brandon12]

^Amen.

[innov8]

sactjs... the deal was designed this way for two reasons.

One, the city looked at other cities, they actually went to many different cities
over the last few years and saw what other deals were brokered. They are
aware of the status quo so I'm sure there barging guide lines were structured
with this in mind. To ask for more than other had with out a good reason why
would kill any deal real quick. I'm glad they came to there senses finally...
building a arena after the KINGS bolt town would really suck, they would not
even have a stable tenant to help foot the bills.

Second, the Maloof's are in business to make money, but I think we all know
that. No business stays in business by being the nice guy when deal are
being done in regards to the future. They already give a lot of money every
year to organizations and many city project that would not be funded other wise.

In the in, if approved, we all win cause then we can hopefully see this as
the corner stone the railyards being developed and many quality shows
and functions choosing the new arena to entertain more than just KINGS fans.

^ all good points benny

[ICSACON99]

Well I was not aware the Maloofs were going to have to spend 15-20 Million a year to run the arena. Well If that is true & all things were equal if you crunch the #'s, that's about 1.5 Million bones a month in operating cost, if we are to believe that 15-20 million stat. That comes out to about 50K per day.

Well what will parking & conscessions bring in in an estimated 27 dates used/month. Well at 10bucks per what was estimated at 3-5000 parking spaces would be a roughly estimated 40 K per date. Figure further an estimated 1.5 conscession items purchased per date per costomer & even just a 1 dollar profit per item & 18,000 patrons purchasing those items &....You can check my math here..I come up with what I believe is a a low ball estimate of 27 thousand dollars profit in conscessions & a total per date gross profit of 10-20 thousand dollars. At worst case outcome the operating cost & the conscessions/parking profit are a wash...And you can't be telling me it's break even..the Maloofs aren't that dumb. All I'm saying is that the arena deal is not in & of itself a good deal for Anyone other than the Maloofs. Having said that...Based on the #'s I'd vote against it if I lived in Sacramento county....But there is more to the picture. What this will do for a greater entertainment district in the railyards, the Railyards themselves, & further, as a catalist for further development of a true 24 hour urban environment & improved quality of life for Sacramento, is I believe, very positive, if not yet directly measurable. For this greater purpose I would vote yes...But with open eyes regarding the financial equation of the arena itself.

[joninsac]

^ I don't recall where I read it, but I believe the Maloofs are expected to turn a profit of about $1 million per year on the new arena and spend about $300-$350 million running the arena over the life of the lease.

[snfenoc]

You can call it rent if you want, but it's really the Maloofs contribution paid in 30 $4 million increments.

It's rent. The Kings will not have a steak in the arena after 30 years (unless the lease is extended or renewed). The county will wholly own the arena.

Basically, the Kings are leasing the arena and parking garage for 30 years. As the lesser, they should put down a security deposit ($20 million), pay rent (average $4.1 million/year) and pay the operating expenses ($9-20 million/year), while reaping the benefits from the operation (naming rights, parking fees, ticket prices, etc.). If you were to rent a building for a pornography store, the landlord would not ask for a portion of your lube, butt plug and edible panty profits (not to mention the sales of videos like "How Stella Got her Grooves Packed", "Shaving Ryan's Privates" and "Good Jill C*$ting"), or ask you for ownership of your name. He/she would want rent and a deposit for repairs.

So, I don't think it's unusual for the county to only collect rent. I do think the rent is a little bit cheap, however. It only amounts to about 60-70 million present-day dollars. The county is not going to collect enough tax dollars by 2010 to pay for the arena, so they will have to probably get a supplemental loan. If the arena costs $500 million (present day dollars) and the debt service on the supplemental loan is, let's say, $100 million (present day dollars), the total cost of the arena will be $600 million. With $60-70 million in rent over 30 years, the county will recoup only about 10-12% of the arena's cost from the Kings (ignoring all the hard to quantify, intangible stuff).

Recouping only 10-12% over 30 years does not seem too fair. HOWEVER, all of the intangible crap is worth more to me than the cost. Yeah, we are going to get raped, but at least we will enjoy it. The cost, fairness and worries about schools, libraries and levies are not good excuses to vote no as far as I am concerned.

Although keeping the Kings and building a first-class venue out-weighs all of the excuses opposing the proposal, I will still vote no. I am just ideologically opposed to this. Governments should not be in the business of business. I want the socialism to dwindle, not increase (btw, schools and libraries would not be a viable opposition excuse if government did its job and stayed out of education in the first place).

For those of you who do not share the same right-winged libertarian views as me, vote "Yes". All other reasons to vote "No" don't matter. When you pay $80 for tank of gas so you can attend one concert in the Bay Area, you won't care about paying an extra $80 (incrementally) a year in sales tax. When the city misses out on event after event, you won’t care that "we stuck it to those billionaire Magoofs.” And when the Kansas City Kings win the world championship, you won't care that the county rejected an "unfair" deal.

[creamcityleo79]

Originally Posted by snfenoc

It's rent. The Kings will not have a steak in the arena after 30 years (unless the lease is extended or renewed). The county will wholly own the arena.

Basically, the Kings are leasing the arena and parking garage for 30 years. As the lesser, they should put down a security deposit ($20 million), pay rent (average $4.1 million/year) and pay the operating expenses ($9-20 million/year), while reaping the benefits from the operation (naming rights, parking fees, ticket prices, etc.). If you were to rent a building for a pornography store, the landlord would not ask for a portion of your lube, butt plug and edible panty profits (not to mention the sales of videos like "How Stella Got her Grooves Packed", "Shaving Ryan's Privates" and "Good Jill C*$ting"), or ask you for ownership of your name. He/she would want rent and a deposit for repairs.

So, I don't think it's unusual for the county to only collect rent. I do think the rent is a little bit cheap, however. It only amounts to about 60-70 million present-day dollars. The county is not going to collect enough tax dollars by 2010 to pay for the arena, so they will have to probably get a supplemental loan. If the arena costs $500 million (present day dollars) and the debt service on the supplemental loan is, let's say, $100 million (present day dollars), the total cost of the arena will be $600 million. With $60-70 million in rent over 30 years, the county will recoup only about 10-12% of the arena's cost from the Kings (ignoring all the hard to quantify, intangible stuff).

Recouping only 10-12% over 30 years does not seem too fair. HOWEVER, all of the intangible crap is worth more to me than the cost. Yeah, we are going to get raped, but at least we will enjoy it. The cost, fairness and worries about schools, libraries and levies are not good excuses to vote no as far as I am concerned.

Although keeping the Kings and building a first-class venue out-weighs all of the excuses opposing the proposal, I will still vote no. I am just ideologically opposed to this. Governments should not be in the business of business. I want the socialism to dwindle, not increase (btw, schools and libraries would not be a viable opposition excuse if government did its job and stayed out of education in the first place).

For those of you who do not share the same right-winged libertarian views as me, vote "Yes". All other reasons to vote "No" don't matter. When you pay $80 for tank of gas so you can attend one concert in the Bay Area, you won't care about paying an extra $80 (incrementally) a year in sales tax. When the city misses out on event after event, you won’t care that "we stuck it to those billionaire Magoofs.” And when the Kansas City Kings win the world championship, you won't care that the county rejected an "unfair" deal.

If this fails by ONE VOTE, I'm coming there to kick your ass!!! (just kidding!! )...and for the record, Socialist is my middle name!!

[snfenoc]

Originally Posted by neuhickman79

If this fails by ONE VOTE, I'm coming there to kick your ass!!! (just kidding!! )...and for the record, Socialist is my middle name!!

That's OK, I still love ya .

[creamcityleo79]

Originally Posted by snfenoc

That's OK, I still love ya .

I knew it!!! Inspired by Lance Bass?

[snfenoc]

Oh yeah! He's hot .

Boy, my "gaydar" (which has a pink flashing light and says "Fabulousss!" "Fabulousss!" "Fabulousss!" when it gose off) was definitely right on that one.

Maybe this discussion should be in the SkyBar

[joninsac]

Although keeping the Kings and building a first-class venue out-weighs all of the excuses opposing the proposal, I will still vote no. I am just ideologically opposed to this.

You don't have to vote for it, just do us a favor and don't vote against it.

[snfenoc]

That's kind of spineless.

[urban_encounter]

Originally Posted by innov8

I second that!!! There are a lot of misinformed people who do not under stand
what it takes to run an arena...

Misinformation is the biggest obstacle.

I've convinced two people who were planning on voting no to cast yes votes...

This is going to have to be a grassroots campaign to educate people one vote at a time.


Once they hear the breakdown of the deal, the benefits to the community and when people take the Kings out of the picture, it's easier to discern that this is in fact a good deal for Sacramento.

[joninsac]

That's kind of spineless

Nah, not really. You'd just be recognizing both sides of the issue. You yourself have already recognized that keeping the Kings and building an arena outweighs the negative aspects.

[sactjs]

Originally Posted by ICSACON99

All I'm saying is that the arena deal is not in & of itself a good deal for Anyone other than the Maloofs. Having said that...Based on the #'s I'd vote against it if I lived in Sacramento county....But there is more to the picture. What this will do for a greater entertainment district in the railyards, the Railyards themselves, & further, as a catalist for further development of a true 24 hour urban environment & improved quality of life for Sacramento, is I believe, very positive, if not yet directly measurable. For this greater purpose I would vote yes...But with open eyes regarding the financial equation of the arena itself.

Yeah this is pretty much where I stand. I want an arena for our downtown so I'll vote yes on pretty much anything i guess, I just feel they could have done much better.

Originally Posted by innov8

One, the city looked at other cities, they actually went to many different cities over the last few years and saw what other deals were brokered. They are
aware of the status quo so I'm sure there barging guide lines were structured
with this in mind. To ask for more than other had with out a good reason why
would kill any deal real quick.

Yes, but my fear is that by giving away as much as they did they may have killed the deal already...because it still has to be approved by voters. I can see the "don't tax my family to buy the billionaire maloofs a new arena" commercials already. The pro tax group will be stuck trying to sell the "intangible" community benefits of having an arena downtown.

It will be interesting to watch this play out. Crossing my fingers, but I'm not hopeful.

[TowerDistrict]

any dollar spent trying to defeat an arena and a $500+ million county surplus, would be a dollar that could have been spent on schools, police, fire and other community concerns. noone can use that crutch when arguing against this deal... noone but a hypocrite.

[ozone]

Portions of an article in the LV Sun 2005 on the possibility of Las Vegas landing NBA All-Star Game:

"It'll bring international attention to the city, especially with the media," Joe Maloof said. "It'll probably be the most-covered NBA All-Star Game in the history of the game. Journalists from all over the world will cover it, which will be terrific for the NBA and the city.

"The city has an opportunity to showcase all the great things we have in Las Vegas. And it'll be good for the locals, because there will be a complete week of NBA entertainment, with the jam sessions and interactive games."

"To see if he liked the idea," Joe said. "We talked a little about it, in the interest of the city, and he really thought it was a great opportunity, something that might be done. Then we talked to the NBA, and they looked into it.

George Maloof played a pivotal role, Joe said, in contacting hotel owners and executives for their input, and in getting them to agree not to take wagers on the game, or any side events, in their sports books.

Joe Maloof compared Vegas to Sacramento, in that the Northern California city had no major sports team until it welcomed, then fervently supported, the Kings after they left Kansas City in 1985. But he stopped short of saying Southern Nevada will have a franchise from a major league anytime soon. Gambling and public money for a state-of-the-art arena or stadium, he said, will be formidable obstacles.

"Everything has been so positive," Joe Maloof said. "We know the NBA would work here and we thought the best thing would be to try an All-Star Game. I think the NBA is really excited about the possibility of having the game here. "And we're proud of the city."

The Fact is that the Maloofs really want to move the Kings to Las Vegas. This so-called "deal" is designed as a win-win for the Maloofs. If the vote fails they can say that they tried thier best..*cough* but that a no vote is proof that Sacramento can't support a NBA team and they can then pack their bags for sin city. But if it passes they'll still have a sweat money-pot. It's no gamble for them. As pointed out- Gambling is the biggest obstacle to the NBA allowing a team in Las Vegas right now. (Why do you think the City/County went to the NBA to try get a deal made after there was clearly no progress being made in the negotiations?) But guess what? The NBA's 56th Annual All-Star Game will be played in Las Vegas in '07. This is a big deal for the Maloofs and they have every reason to believe that after the All-Star Game next Spring that the NBA will be more receptive to the idea of Las Vegas having a team. I'm pretty sure this is a set up and that the Maloofs don't want the voters of Sacramento County to vote yes. But if they do..they'll still win a nice jackpot. The house always, always wins.