City of Sacramento

A sleek, glass-fronted arena would fit on city-owned land near Fifth and H streets and could open by 2015, an analysis said.

Analysis finds Sacramento arena, entertainment facility would cost $387 million

Published: Thursday, May. 26, 2011 - 12:00 am | Page 1A

A much-awaited analysis due for release today says a new arena and entertainment facility in downtown Sacramento would cost $387 million, would fit on city-owned land near Fifth and H streets and would be open by 2015.

Yet the 40-page document is most notable for what it doesn't include: a way to pay for the sleek glass-fronted building shown in the colorful renderings released with the report.

Downtown Sacramento developer David Taylor and officials with national arena builder ICON Venue Group of Denver reportedly have a tentative list of funding sources. But the group hasn't had time to do enough detail work to make them public, city officials said.

In particular, the analysis has not yet concluded how much money might come from private sources, including the Kings' owners, and how much might come from the public, potentially from hotel taxes, car rental taxes and arena district sales taxes.

Instead, Mayor Kevin Johnson said he will form a regional coalition of elected officials and community leaders to spend the next 100 days working with Taylor and ICON to fashion a proposal for a financing plan.

The city also will convene a "technical review team" to analyze the data from Taylor and ICON, according to briefing documents distributed Wednesday to City Council members and the news media.

Council members will be briefed today on the report, but are not scheduled to vote.

Taylor did not return phone calls this week from The Bee. He has made it clear, however, that he believes the public must participate in financing an arena.

"No way in hell this project is going to get done in any of our lifetimes without public help," Taylor said in January.

Officials close to the mayor said Taylor's group is not prepared to deliver the expected menu of financing options today partly because the group did not obtain key financial information from the Sacramento Kings until a week and a half ago, and hasn't had time to digest it yet.

The Kings' owners had been unwilling to meet with Taylor and ICON for several months while the team was negotiating with Anaheim officials for a possible move to Orange County. The Kings have since backed off that effort, for now.

Two weeks ago, the Maloofs threw a potential curveball into the arena financing picture by telling the arena study group the team is willing to consider simply being a tenant in a new Sacramento sports and entertainment facility.

"We haven't decided," team co-owner George Maloof told The Bee. "We're flexible."

Currently, the Kings are the year-round operators of Power Balance Pavilion, formerly known as Arco Arena. The team collects all revenues from operations at the site. Previously, team officials had insisted on having the same arrangement at any new facility.

If the Kings were to become tenants in a new arena, the city or a joint governmental agency likely would be the owner and would hire an arena operator. That operator could potentially become a private equity partner in a deal.

Mayor Kevin Johnson said this week that he has talked with Tim Leiweke, head of AEG, one of the biggest arena operators in the country, about potential involvement in Sacramento. AEG, which runs the Staples Center in Los Angeles and the Sprint Center in Kansas City, has a long-standing business relationship with ICON Venue Group, and has provided guidance during Sacramento's feasibility study.

"They can't commit at this point (to helping to run or finance an arena)," Johnson said, "but they're at least willing to listen."

AEG's Leiweke did not return a Bee call Wednesday.

Although the arena report does not lay out specific revenue sources, it will cite funding mechanisms that other "comparable" cities used to build their arenas: Kansas City, Orlando, Memphis, San Antonio and a proposed facility in Edmonton, Alberta.

Johnson said this week he wants to determine the public and private contribution levels "in a relatively quick manner. I'd love to have all the answers come November or December."

That may not be soon enough, however. Maloof has said he hopes to see a financial plan by October, to give the team time to relaunch plans to move to another city, if need be.

Maloof has expressed skepticism about the prospects of getting an arena built in Sacramento, but sounded more upbeat in an interview with The Bee last week after meeting for several hours with the Taylor/ICON group.

"They're working hard," Maloof said. "We're all trying to be positive. We're trying to get it done."

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