Good article that breaks things out. The more I look at the deal, I think the city did really well.
It's a deal: Arena could rise in railyard by 2008 if voters approve
http://sacramento.bizjournals.com/sa...ml?jst=b_ln_hl
After years of false starts and stumbles, officials from the City of Sacramento and Sacramento County have reached agreement with the owners of the Sacramento Kings on a proposal for a new sports and entertainment arena. County officials next week will consider whether to ask the public to approve a 15-year sales tax that would help pay for the $470-million-plus arena. The basketball team's owners committed to a 30-year lease and payments totaling hundreds of millions.
Negotiators for the local governments and Maloof Sports & Entertainment struck the deal at 9:21 a.m. Thursday, the last day for an agreement that would allow the parties to get the tax question on the ballot this year.
City and county officials who were involved in the negotiations laid out the broad outlines at a news conference Thursday afternoon. County Supervisor Roger Dickinson said an arena in the railyard would "provide a crucial kick-start or catalyst to redevelopment," and that public financing was appropriate because a first-class, modern sports and entertainment complex is "important to the kind and character" of the Greater Sacramento community for the future.
Darrell Steinberg, a former Assembly member who represented the Maloof family in negotiations, said the Maloofs "are absolutely thrilled with this outcome." Public officials, he said, drove a "justifiably hard bargain" but the end result was a fair agreement.
The Sacramento County Board of Supervisors on Tuesday will consider whether to put the proposed sales tax on the November ballot. The quarter-cent general sales tax, if approved by a majority of voters, would expire after 15 years and raise an estimated $1.2 billion over that span. Dickinson said that works out to "less than $5 per month for the average person."
At least half that money would be made available to the cities and county governments for public projects and improvements such as transportation projects or libraries. The remainder would go toward the arena, which has an estimated cost of $470 million to $540 million.
If voters approve, Dickinson said in an interview, construction of a new arena could begin in summer 2008 and finish by autumn 2010.
Then Arco Arena would be razed. The Maloofs would be able to sell the land and use the proceeds toward paying off the loan to the city. The 85 acres occupied by Arco would fetch an estimated $40 million to $45 million, Dickinson said. That land would be rezoned "for a better or higher use," for either commercial or residential development, he said.
Key components of the arena agreement include:
The Maloofs would pay off the Kings loan to the city for Arco Arena in its entirety; the outstanding balance is about $72 million to $73 million
The Maloofs would put up $20 million upfront in a capital reserve account for future repairs
The Maloofs would lease the building for the Kings and Monarchs for 30 years, paying a total of $122 million in rent, or an average of $4 million a year
The Maloofs would be responsible for the management and operation of the arena, at an estimated cost of $10 million to $12 million a year -- $300 million or more over the full lease term
The Maloofs contribution toward the construction of the new arena works out to roughly 26 percent for a $540 million arena, or 30 percent if the cost came in at $470 million, the lower end of the estimated range.
That's based on the $20 million upfront payment and the 30 years of rent. The percentages do not include the amount that the Maloofs would pay on the loan for Arco.
The $470 million to $540 million cost of the arena would include parking, land acquisition and infrastructure around the arena.
The private dollars being put up, Dickinson said, "meets or exceeds (the share in) each of the last four agreements" made for new sports complexes nationwide. Those deals were made in Indianapolis, Charlotte, N.C.; Memphis, Tenn.; and San Antonio, Texas.
'Other priorities'
The split of sales-tax proceeds between an arena and other unspecified public purposes could make the tax increase more palatable to voters and makes it easier to justify the use of a general-purpose tax; a special-purpose tax needs a higher vote margin for approval. The Sacramento County Taxpayers League has already questioned the propriety of a general tax.
Another group, People United for a Better Sacramento, opposes a tax for a new arena when other pressing community needs could use the scarce tax dollars.
"We recognize there certainly are other priorities," Dickinson said Thursday. At least $600 million of the money could be used for such things as transportation and libraries, he said. "It would be unencumbered legally."
Local elected officials will continue to work on improving flood protection, transportation and other community priorities, Dickinson said. "We can do those things and do this too."
"This is not really about the Maloofs. It's about us," he continued. Sacramentans, he said, deserve the best quality of life, performing artists, convention facilities and the very best in professional sports. "We believe this fits in our vision of what a great region is."
The voters, though, will have the last word, he said.
Mayor Heather Fargo said a sports and entertainment arena would "serve as a significant amenity" to the railyard and region.
Councilman Rob Fong, who helped negotiate the agreement, added: "This is a really exciting day ... I think it's a great time to be a Sacramentan."
The Maloofs, Steinberg said, are "looking forward to Sacramento being their home for the next 30 years and beyond."
Also on hand for the news conference were Matt Mahood, head of the Sacramento Metropolitan Chamber of Commerce, and Warren Smith, a founder and executive of the Sacramento River Cats baseball team. The River Cats' leadership participated in arena negotiations.
Joe Maloof, Gavin Maloof and city and county representatives were scheduled to comment further on the agreement at a news conference Friday morning at the railyard.
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