Arena Report: $387 Million

By: Carmichael Dave – KHTK Staff Writer

Key details are emerging on Tomorrow’s report by the ICON-Taylor Group to Mayor Kevin Johnson and the Sacramento City Council regarding the feasibility of a new Entertainment and Sports Complex.

For starters, a new sports and entertainment complex built at the downtown railyards comes with a 387 million dollar price tag. Those costs break down to 241 million in construction jobs, and 146 million in soft costs, according to the layout obtained by KHTK.

The report states that the new arena will create 4,100 new construction and permanent jobs throughout the region, bring in 556 million in new spending during construction, and 25 million in annual spending during ongoing operations.

Local government agencies will receive 2.3 million in new revenue during construction, and 775 thousand annually during ongoing operation.

It was also stated that there will be significant expansion of arts, cultural, civic and entertainment amenities currently limited by the substandard Natomas facility.

As expected, the downtown railyards are the preferred destination. The report explains that the new arena can physically fit at the railyard site, which also offers the greatest potential to create jobs, activate downtown, and enhance transit connectivity. While the Natomas site would also be feasible, it would leave Sacramento as one of only three NBA cities with arenas not based in downtown areas.

When asked about infrastructure necessary for a downtown facility, sources close to the analysis said that those monies are expected to be funded through other sources, such as state and federal infrastructure grants .

As far as the arena details themselves:

  1. 1,300 additional seats for NBA games
  2. 44 additional luxury suites
  3. 1,368 additional premium and club seats
  4. High-resolution scoreboard and LCD flat screen displays
  5. Additional lounges, kid zone, food and retail facilities
  6. Event facilities and operations support to accommodate top concerts, shows, and other events

Surprisingly, when asked how much cheaper it would be to build the arena in Natomas, KHTK was informed that it would be only 1.3 percent cheaper, which comes out to just over 5 million.

The review was put together to be tailored to the Sacramento market, which included a review of comparable NBA markets as well. It was also noted that additional refinements to the revenue model may occur as more Kings specific data is incorporated into the analysis.

While the major question of how the project would be funded wasn’t answered, it was addressed via comparable arenas and their funding methods, a road arena proponents are sure to follow. Using 5 arenas (San Antonio, Kansas City, Orlando, Memphis, and the proposed Edmonton, Canada facility) as examples, funding mechanisms all showed both public and private funding. Private sources ranged from private operators, team rent payments, ticket surcharges, and overall bulk team contributions. Public sources included hotel and rental car taxes, arena sales taxes, and provincial contributions.

The three major steps to the project were also outlined:

  1. Present the proposal to the city and region this Thursday
  2. A 100 day review process, including technical review, launching a regional contribution, and developing a public-private funding plan.
  3. Beginning design process, securing funding prior to the March 1st deadline, and completing the entire project by May of 2015, less than 4 years from now.

The ICON-Taylor group in led by Sacramento development firm David Taylor Interests. ICON has had phenomenal success in building entertainment and sports complexes, including 11 arenas and 9 stadiums in the last 10 years.

It was pointed out, according to the report, that due to the fact that the Kings financial data was acquired 80 days into the analysis, there was only financing models identified, and not a specific financing plan.

Now the city will move forward in identifying specific financing structures, working with other entities within the “metropolitan area”.

Also to be addressed: a practice facility for the Kings, as well as parking. It was said that much of the parking will be handled by surrounding garages, which boast over 8 thousand spaces within a half mile. Whether or not preferred parking would be on-site in addition to the surrounding spaces is still to be determined.

During the 100 day technical review process to follow, the city manager will assemble a group of local city leaders to coordinate with the Kings, the NBA, private sector partners, and the state, as well as assist in the review process itself.

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  • Dennis Hammond

    Natomas is the best site for a new arena. Economically it would cost the least and the traffic infra structure is already in place. That said, I just figured out the City’s real arena game. They want to use the new arena as an anchor for the redevelopment of the downtown railyard, as best benefits the developers and special interests. Then when that is done they get a whole new redevelopment area. Natomas will have the old arena and failed stadium areas to develop, plus the area will have developed vacancy problems like downtown when the business in the area leave or go broke. The developers and special interests can make even more money off the taxpayers. It will be a redevelopment

    • David Ragland

      Hammond — Dont you understand that the City does not own Power Balance arena and the surrounding land? The Maloofs do!!! Yes – a loan must be paid off but the city can not develop the old arena unless there is a default on the loan which does not appear to be real likely. Looks like you really DONT have it figured out bugddy!

    • jveezy

      $5 million is the difference in cost between building in Natomas and building downtown. The difference in potential revenue is enormous.

      Absolutely they want to use the arena as an anchor for the redevelopment of the downtown railyard. Absolutely it benefits special interests. But guess what? That doesn’t mean it doesn’t benefit the city too. The city will make far more from property taxes and sales taxes and parking from use of surrounding businesses downtown than they will in Natomas. That money will end up in schools and other departments that are hurting.

      Anything good that has ever happened in government has benefited at least one special interest group in the process. Special interests and good city planning are not mutually exclusive.

  • Dennis who?

    Um… Natomas really isn’t the best spot, Dennis, but thanks for your expertise. Putting an arena in the railyard kills two birds with one stone. Natomas has very quickly become a ghetto and there isn’t any saving that.

    It’s not about taxpayers, D-bag, but we sure appreciate your efforts.

  • Wyliecoyote

    IT is always about special interest to the developers, who do you think contributes to the City and Mayoral political races? These city officials try and package this to sell to the taxpayers/voters/sports fans, but it’s really a big give away to the crook who builds this thing. They get tax breaks, they get public financing, and they walk away with a huge chunk of the tax payers $$$, MEANWHILE………the jobs will be imported from outside this region, and the supplies will as well and then we have to cut Police, fire and other essential emergency workers, close parks etc…so this crook can get flithy rich. I will vote accordingly next election, you can count on it and tell everyone else about this.

  • Keep The Kings

    Lets get this Arena built. I’m tired of people complaining and whining. Those of you who are pessimistic need to GET OUT THE WAY so we can turn this city into something we can be proud of. If you look at how The Sprint Center was financed for $275 Million using Rental Car taxes, A 30 Year advance from the company that ran its management operations and an advance from Sprint, they were able to get it done with very little public money. Downtown is feasible because it has a better Public transportation foundation. Not everyone has a car, but they love sports, concerts and other events this would bring and it would be easier to get downtown then way out in N. Natomas.BOTTOM LINE: If we dont get this doen, the kings WILL leave and this city will be EMPTY.

  • Mr. Wilson

    Oh Dennis, why do you always have to dig up my roses. Look further than a couple years into the future. Imagine Sacramento on the national stage hosting national events. Downtown is the only way to go.

  • redneckwriter

    As long as taxpayers don’t foot the bill, you can build the arena anywhere you want.

  • Skip

    I don’t want to do anything that would make the Maloof idiots happy, even at the cost of losing the Kings. I’m tired of those greedy morons. Let them leave.

  • Stupid sheep

    Wylie… educate yourself a little before playing Paul Revere. It’s pretty irresponsible to be spewing your negativity when nothing you write is even remotely correct. Well, except for the part about a wealthy developer. See… those are the guys that employ others. It’s called capitalism… some even call it the American way. Did you get the concept about spending money now to make a whole bunch more in return? Buehler? Buehler? Good Lord.

    Seriously, dude, just go away. In fact, if it’s progress you fear, Modesto is only 90 minutes away and they’d LOVE to have you.

    • curtis

      Uh no, we don’t want him

  • Really Skip?

    Hey, Skip, why exactly are the Maloofs morons? Is it because they’ve been trying to get an arena built for years? Guess what, EVERYONE that knows anything about pro sports knows we need an arena. Apparently you don’t. Millionaires don’t become or stay that way by being stupid. You can’t blame them for finally, after nearly a decade, calling Sacramento’s bluff. Converseley, you can’t blame Sacto for fighting back. It’s really about 2 passionate groups fighting for survival.

    Call them stupid if it makes you feel like a big man… but know you’re wrong. They’re the ones with millions… you’re just the guy with a low IQ.

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  • dagrappler

    I don’t live in Sacramento, but I did for 8 years from 1990-1998. I think that the Railyards would be the best option for Sacramento. I remember how bad the area was in SF before they built AT&T, it was worthless and nobody ever went there for any reason. Now the area around AT&T has got all sorts of stuff going on after the Giants play. Right now at the Sacramento arena, as soon as the games are over, everyone gets in their cars and goes home. With a downtown stadium, people will hang out after games, spend money downtown, party downtown and start associating the city of Sacramento with these good times. It will also bring in tourists who would never take a trip to see Arco but will go see a new arena if it is within walking distance of the Capital Building…It’s a win win, don’t get into petty arguments about the Maloofs, do it for the city’s future and the future entertainment of every Sacramentan. I will definitely go to see games and concerts from the bay area once it gets built.

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  • Daniel Velasquez

    Downtown is the way to go. What a boom it would be for all the businesses in the area. Imagine what Old Sac and all the restaurants in downtown area would be like before and after games and other events that would use the arena as well…. Downton gives everyone the most bang for your buck!

  • Malika Mann

    c’mon people now THATZ messed up! i cant believe this government! their cutting down the education, which is the future of the country and their building dumb things like that. y would they even make an arena for a team that’s always losing?! I thought that California needed money, but doesn’t look like it. I apologize, I’m not trying to be offensive, but the government is doing too much.

  • luanne

    $387 million for a new arena. Seriously? Sacramento is laying off police officers, firemen, and school teachers, yet they seem to have money to build a new arena… Oh, I totally understand how this money isn’t earmarked for police, fire, or schools; I work in government so I understand all that. But open your eyes, just once, make the right decision. What good is a new arena if you don’t have adequate police officers or firemen to protect it? Earmarked or not, figure out a way to use the money for rehiring those you laid-off. Arco Arena, or whatever it’s called now, will work just fine until or economy recovers, don’t you think?

  • G

    Cool 2700 aditional seats +/- the 44 luxury suites…144K per new seat…seams totatly worth it…

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