In preparation for Tuesday's City Council meeting in which the Council will be asked to authorize formal negotiations with an investment partner for a new arena, the City Manager's office has released a staff report detailing the process.
As Mayor Kevin Johnson's self-imposed March 1st deadline nears, more and more news on the city's efforts to keep the Kings are being revealed. Today the City Manager's office released a staff report which will be presented to the City Council tomorrow explaining how the process would go forth.
The Staff Report includes:
- A request for the authorization of $150,000 from the General Fund for the negotiation efforts split thus: $90,000 for the Barrett Sports Group, the same arena consultant used by the city last year, $50,000 for Transaction Counsel (lawyers), and $10,000 for contingency.
- A renewed focus on a public-private partnership. The report notes that while other cities have privately financed facilities, this isn't a viable option for Sacramento because of the limited size of the regional media market and corporate base.
- Clarification that the 2012 deal that fell apart will likely change. The report cites three key potential differences: a) project location other than the Railyards (it is heavily rumored that the city and the investors are now focused on the Downtown Plaza site); b) less development risk for the city due to the fact that the new owners could take the lead on development; c) ancillary real estate development opportunities
- The reevaluation of parking assets. This is likely due to the fact that a different location probably will result in a different valuation. In the 2012 plan, the valuation and subsidization of the city's parking assets was the main financing vehicle for the city's $255 million contribution. This will likely remain the same, although the contribution number could change.
- Seven Principles for the Finance and Development of a New Entertainment and Sports Center (ESC): 1) Protect the Tapayer; 2) Retire the Existing City Loan to the Kings; 3) Downtown Location; 4) Long-Term Commitment to Keep the Kings in Sacramento; 5) City Will Consider Investing Net Value of its Parking, Land and Other Assets; 6) Public-Private Partnership; 7) Natomas Arena Site Economic Reuse