Here is Cohn's positive response to my email
by ElRonToro on Feb 15, 2012 10:05 PM PST
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Nice synopsis and I agree an opt-out clause is one solution (not without its cost as you note). The three questions you posit are certainly among the most important questions to answer. There are a few others, and time will tell how things go in negotiations with the parking proposers, as well as with the NBA, the team, AEG, and the Icon/Taylor group. But we’re certainly on the right track and in the best position we’ve ever been to finance a new arena.
My letter
I know a lot of you are uncomfortable with a 50 year parking lease (although I am not sure what is going to go so terribly wrong in 2044 that hasn't gone wrong prior to that). But there is an obvious solution, an opt-out at whatever time period you select.
As an example, say you are offered 270 million up front for a 50 year lease and 220 for a 30, you could choose to put in an opt-out opyion in the 50 year lease at the 30 mark where you just pay a pre-determined cost, say 60 million. You are free of your contract and have made almost as much as you would in a straight 30 year deal.One huge advantage to this even if you end up opting out; The ESC is built and the downtown railyards are revitalized.You may have to figure out how to come up with the 60 million in 2044, but I repeat Sacramento's new heart of the city is complete and the economy revitalized.
This deal hinges on 3 points to me;
1) Is there enough money from the parking to make the deal viable?
2) Is the 9 million in the general fund protected?
3) Is the city protected from cost overruns ?
If all three of these answers are yes, this is a no brainer, and Sacramento wil be well on its way to becoming the great city it can be.
Thanks for your time.
(This is a FanPost from a member of the Sactown Royalty community. The views expressed come from the member, and not Sactown Royalty staff.)
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I am at war with my lap top
it was a battle to get it to do this
it should be his response yadda yadda
my letter yadda yadda
He gave me permission to relay his response
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
gah
no clue why the “very ve” is in there
by wallywagon11 on Feb 15, 2012 10:14 PM PST up reply actions
Took me 20-30 minutes to get it posted as crappy as it was
nothing was working. I think, as I told him when I asked permission to publish, that most of us at StR want the ESC only if the financials are good for Sac. I really like that a guy who is only going to judge it on the facts has a vote.
I am feeling good about this
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
Yeah it sure lloks like it's going to come down to whether it will pencil.
And that’s about it really. Not terribly exciting and we on the outside of the tent don’t know a lot of it yet but we’ll see sooner than later.
by wallywagon11 on Feb 15, 2012 10:24 PM PST up reply actions
Yep
Numbers make sense —> deal gets done
Numbers don’t make sense —> no deal
It’s part of the reason why I can’t stand some of the people complaining that the numbers aren’t going to add up, because the numbers adding up is a requirement for the deal. They’re not going to just do it and find out later that the projected numbers don’t add up. Whether the projected numbers eventually reflect actual numbers is another story, but there’s no way to know the future for sure anyways.
I will say
technically you and I don’t know whether the numbers are adding up. There are still holes in the funding that we don’t know about.
by wallywagon11 on Feb 16, 2012 7:15 AM PST up reply actions
Thanks for sharing ElRon
That is very encouraging and Cohn seems to be a pretty level headed individual. Good to see. Also, even though it is just theoretical the $270 and $220 million numbers are good to see.
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And whatever we do get from the parking
it sure seems that $52 million can’t go to the arena.
by wallywagon11 on Feb 15, 2012 10:28 PM PST up reply actions
No to pay off the bonds to the parking garages
Must be down within 60 days after leased.
by wallywagon11 on Feb 15, 2012 10:31 PM PST up reply actions
Oh okay thanks
I’m guessing some member might want some to go toward the general fund as well but I don’t know.
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And one
I like the opt out clause but I don’t see people going for that. The buy out sounds a bit risky/controversial.
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Well here's the thing kangsfan
I know I’ve been repeating it over and over again for about a year now but it all comes down to whether KJ can count to five. You need five votes on the financing. It may be controversial but it’s a pretty safe bet that Cohn would be the fifth guy here and that four would have already likely voted for a 50 year deal with an opt-out clause so long as those other three items were met. This is likely your fifth vote on the council so if he can see a way that it is okay enough for him to risk his vote (and remember, he’s not up for reelection like most of the others) then that’s likely not too controversial.
by wallywagon11 on Feb 15, 2012 10:38 PM PST up reply actions
True, true. I'm just overthinking things. Can't count our chickens and all that...
I’m missing who is five though. KJ, Ashby, R. Fong, Cohn and ? Just can’t remember who’s been pro ESC
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yeah sorry
and he worked with KJ at Saint Hope (just saying)
by wallywagon11 on Feb 15, 2012 10:56 PM PST up reply actions
If I'm not mistaken, McCarty could be a yes vote as well right?
A layer of ‘insulation’ can’t hurt.
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I've always felt that McCarty is a No
but that’s just a guess from attending meetings.
"Children want what they want when they want it." ... Andy Sims
I think he's a mini-Cohn
You give him really good numbers and he will vote yes, but he is also worried about making the Assembly and won’t do any vote to jeopardize it.
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
That's an important point
My feeling has always been that we have 3 Yes and 3 No, with 3 council members on the fence (Cohn, Schenirer, and Pannel). You need 2 out of those 3 to make this happen. But obviously everything is very organic and could change at any point.
"Children want what they want when they want it." ... Andy Sims
This quote alone was why I thought he could be a yes
Still, McCarty – as well as others on the council – is “withholding judgment (on the arena plan) until I see all the facts.”
via Lillis
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'insulation' doesn't help either though
by wallywagon11 on Feb 15, 2012 11:08 PM PST up reply actions
Just meant in case someone reverses their position
But I guess if one member reverses their position, we aren’t likely to see anyone on the fence vote yes.
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Well if they can't get the lease terms down any and can't fill the $9 million gap and not take care of the cost overruns angle then yeah it seems like they might not get 5 votes
now we’ll just have to see how reasonable these types of things are within the deal. And if they are there, don’t see why anyone would just reverse their position unless we are playing Reality TV Voting Rules and I wasn’t clued in.
by wallywagon11 on Feb 15, 2012 11:15 PM PST up reply actions
derp
*lease years down not lease terms
by wallywagon11 on Feb 15, 2012 11:15 PM PST up reply actions
The terms of the lease may appear acceptable to one person that may not to another
If we’re already counting Cohn as a yes vote then, yes I’d consider someone reversing their position a real possibility. Given, it probably won’t be Ashby or Fong.
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you think they're going to turn from a yes to a no ... because the deal covers those things?
by wallywagon11 on Feb 16, 2012 8:14 AM PST up reply actions
Whatever man
I don’t see the lease terms as black and white. Obviously the general fund protection is, but the lease years could deter someone or the opt out price being too high. I’m not confident that anyone other than KJ is an absolutely 100% yes vote regardless of the terms of the lease.
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On one hand not sure how much Cohn would appreciate StR blowing this letter up on the front page
but technically speaking, from a newsworthy standpoint it should be.
by wallywagon11 on Feb 15, 2012 10:27 PM PST up reply actions
This was how I asked him
Would I be able to quote this email on SacTownRoyalty? While everyone there is pro arena , most (well maybe half) have the caveat that it still has to be a good deal for Sac. I think they would be happy to see that you are going to make a decision based on the facts, and what is best for Sac. That is the impression of you that most of us have, and to be honest, why we think you will end up a yes, because we think (hope?) that the financials end up ok and it will be a win win for King’s fans and Sacramento. Thanks for your hard work.
And this was his response
Sure, feel free to quote it.
Sent from my iPad
Steve
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
Definitely big news to us die hards
Really cool of Cohn to respond thoughtfully rather than a brief “thanks for your interest” type response.
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An Opt Out Clause...
is a great addition. I think it’s something council can point to and say “look, this is a good deal for us and set the terms.” There doesn’t appear to be much risk in adding it for either side considering these companies will be bidding against each other.
Very cool that he responded. He must have been impressed.
BRING BACK THE ARCO THUNDER....STOMP!
Well done, El Ron.
Perhaps, your suggestion will help some people “save face.”
Asked if the Kings had any intention of trading Cousins, basketball president Geoff Petrie said, "No."
Problem I see with a 50 year deal
is that the arena won’t last that long. Let’s say it lasts 30 years, speaking optimistically. What then? To build a new arena, or remodel the existing one, would require another funding deal. Looking from the city’s POV, an opt-out after 30 years would allow the deal to be renegotiated, essentially, or completely redone. Looking from the lessee’s POV, I wouldn’t want a 50 year deal if the arena (and all that parking income) were only going to last 30 years.
oh trust me, the lessee wouldn't care about that
they’ll still make bank
by wallywagon11 on Feb 16, 2012 8:35 AM PST up reply actions
Oh it took me half a day to finally figure out what you meant, due to your reply being rather short (in more ways than one).
But I see what you mean. All the more reason for the city to insist on a 30-year deal.
Looking forward 30 years...
and seeing this arena as its potential centerpiece for revitalizing downtown Sacramento, hopefully the city is booming by then with 30 years worth of new developments, and won’t have to jump through this many hoops to build a new arena then.
Maybe with the 30 year opt-out, there could be a renegotiation on the lease to wiggle some money out there before extending it again.
"First we get jobs, then we get the khakis, then we get the chicks."
Hold on... Let me pull out my crystal Nostradamus ball
by HeuristicLineup on Feb 16, 2012 10:45 AM PST up reply actions
Won't matter...in 50 years we'll be beaming in to sports arenas.
Oy! Scotty! Beam me out! I’ve got a King’s game to get to!
Dammnit, Jim, I’m a King’s fan, not a miracle worker.
"Crescit cum comercio civicas"
Throw it around the back so it look fly when I pass//
Just to avoid the block go high off the glass//
I'm killing them out there they gon' have to bring caskets//
This all I hear after the baskets *swoosh*//
by HarveySpecter on Feb 16, 2012 1:39 PM PST up reply actions
A 30 year lifetime on a new arena is pretty pessimistic
ARCO/PBP opened in 1988, which means we’re already at 24 years (and bound to go to 26-27) in the bar-none cheapest arena (in adjusted dollars) in the entire league. We’re not talking about shoestringing a new arena like ARCO, we’re talking about going state-of-the-art. Things like seats will have to be swapped out, but 50 years before a major remodel isn’t unreasonable.
by Capt. Factorial on Feb 16, 2012 12:45 PM PST up reply actions
Not according to this list
This shows that there is only one arena in the NBA that is older than 30 years. That is Madison Square Garden, which had a $200 million renovation in 1991.
There's actually one more older than 30 years.
Oracle Arena (Warriors) was built in 1966. Their $121 million renovation was in 1997.
No worries
After we get the extra revenue from our first 3-peat in the new arena and host the 2020 allstar game, we should have plenty of extra cash.
by SharkKings49 on Feb 16, 2012 2:01 PM PST up reply actions
Yes but I don't think past evidence is as reliable on this one.
None of the more recent buildings built have expired yet, so we don’t know how long a building built tomorrow will last. In 30 years we’re not going to need to shove in a bunch of extra luxury boxes to make money. Maybe there’s some other revenue development that they’ll be demanding then, but the main reason why so many cities have new buildings is because they needed the luxury boxes for extra revenue and their older ones didn’t have enough room to squeeze those in.
Totally agree
But considering the ESC will already be downtown, it’s a matter of renovation at that point. Arco probably could have been renovated, but then you spend all that money on renovation and none on capturing the economic benefits of having a building like that downtown. Going from Arco to a modern-style arena is a big jump since Arco was built very cheaply. Going from a modern arena to a more modern one in 30-50 years isn’t as difficult.
Depending on the type of upgrades of course, but none of us can really foresee what those will be.
Size of the footprint was (mostly) why Arco couldn't be renovated.
"Victory goes to the player who makes the next-to-last mistake."
- Chessmaster Savielly Grigorievitch Tartakower
by lietothegirls on Feb 16, 2012 10:39 PM PST up reply actions
would likely require heavy renovations though
plus, the lease with AEG and the NBA will likely be 30 years
by wallywagon11 on Feb 16, 2012 1:21 PM PST up reply actions
Citys opt out at 30
AEG and Kings contracts at 30….if for some reason the arena has a problem everybody is covered
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
reply fail to kinglet
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
$9mil = 1.1% of the budget
I don’t know why we’re worried about being 10000% sure every penny is covered.
"Victory goes to the player who makes the next-to-last mistake."
- Chessmaster Savielly Grigorievitch Tartakower
Probably because the city is running at a deficit and with a lot of budget cuts
and it was a promise to the citizens of Sacramento.
by wallywagon11 on Feb 16, 2012 8:43 AM PST up reply actions
Since when do politicians keep promises?
Besides KJ of course
by SharkKings49 on Feb 16, 2012 2:03 PM PST up reply actions 1 recs
I'm guessing the lease won't begin for a couple years anyway so the general fund would still be protected until then anyway.
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that's highly unlikely
you don’t sign contracts to lease out property a few years later.
by wallywagon11 on Feb 16, 2012 8:45 AM PST up reply actions
The only reason we are worried
is because the city council is worried and has drawn a line in the sand about this issue
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
Cohn seems snakey to me
The Metro Chamber guy came up to talk and Cohn tried diverting him by asking about some old tractor his family have on display.
The guy was dumbfounded and essentially refused to take him up on it.
"Victory goes to the player who makes the next-to-last mistake."
- Chessmaster Savielly Grigorievitch Tartakower
Just seemed like small talk to me.
If anything he was trying to be friendly. I don’t think it’s a reason to see him as “snakey”.
Agree
I think he saw the show and was amazed that they still had the covered wagon that brought them out west. That is kinda cool
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
Nobody that was there took it that way
The silence was deafening.
"Victory goes to the player who makes the next-to-last mistake."
- Chessmaster Savielly Grigorievitch Tartakower
by lietothegirls on Feb 16, 2012 10:40 PM PST up reply actions
ElRon did you reformat your post?
Somehow I was reading your letter as if it was Cohn’s earlier. I’m going to have to retract about 3/4 of my posts in this thread lol.
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Yes I did
I had to do it in HTML the other was taking any changes at all….Sorry
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
except for my summary
they are very similiar to me though
35 and 31. I'm calling it now. Reke and Cousins 1-2 in most improved award both All-stars. Jimmer leads rookies in scoring, passing and Ole's. Make 2nd round of playoffs and Salmons is not here by seasons end.
same here
I read it entirely differently last night
by wallywagon11 on Feb 16, 2012 8:18 PM PST up reply actions
yeah sorry last night I thought Cohn went on at length about the opt out clause (yet I read ElRon's letter the other day, shows how much shit I retain).
kind of changes my comments a bit in retrospect.
by wallywagon11 on Feb 16, 2012 8:20 PM PST up reply actions
Some thoughts from a Sonics fan
First and foremost let me say I hope the Kings stay in Sac Town. I’ll be a little sad that there won’t be NBA in Seattle for at least another year, but you guys seemed like loyal fans and I wish you the best.
The crappy truth is what happened when the Sonics left was the right thing. We had to wait a few years but now we have someone who is willing to invest/donate 490 million dollars for a new arena. (The idea of Hansen only putting in 290 million dollars of his own money into the arena is a misnomer. He is actually investing another 200 million in lost revenue over the course of 30 years) The city of Seattle is putting up 200 dollars of money that otherwise would not have been created if an arena is not built. None of that money is being taken from the general fund and all of the over runs are to be paid by the owner. Also who ever is the owner can not relocate the team after 30 years (Not sure if this clause actually hold up. The Sonics had a similar agreement but they still left early). Also Hansen has to have an emergency fund to cover 3 years of the rent
From what it seems like the Maloofs aren’t even able to poney up 100 million for a renovated arena. Hopefully Sac Town finds a new owner like Hansen is willing to invest hundreds of millions into their city. Good luck with that…
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