Sacramento's downtown sports arena still doesn't have a financing plan.
But it now has the broad outlines of a program to raise the estimated $387 million needed to build the proposed railyard complex.
At a gala unveiling Thursday, Mayor Kevin Johnson's Think Big Sacramento task force offered up a smorgasbord of funding options that includes ticket surcharges, private investment, the sale of city-owned land and perhaps most important a quasi-privatization of city parking.
Hotels and restaurants near the railyard will likely be asked to tax themselves. Naming rights and luxury suite dollars would be earmarked for construction costs. There's even the possibility of drawing in foreign investors under a U.S. government program that offers green cards to those who put money in.
Yet almost all the details remain to be fleshed out from the level of surcharges on arena hot dogs to the amount of rent to be paid by the main tenants, the Sacramento Kings. The City Council and possibly other area governmental bodies will likely be asked to guarantee the bonds that would be sold to fund the project. That could be a political land mine.
It's also not clear what would happen with the $65 million the Kings already owe the city.
"We are nowhere near the finish line," Johnson told around 100 supporters and communications professionals at the Sacramento Press Club.
Added Dan Barrett, a stadium-finance consultant working on the project: "We don't have a definitive financing plan. What we have is a series of options."
If no package is in place by March, the Kings' owners say, they intend to seek NBA permission to move. Johnson vowed to have "what we think is the final plan" ready by January. The building itself would open in 2015.
Barrett said Sacramento's demographics complicate the financial picture. The region's tiny corporate base limits the revenue that can be squeezed from luxury suites and similar sources. And the task force long ago ruled out a sales tax hike of the sort that failed miserably at the ballot box in 2006.
"You can't craft the same deal in Sacramento that you can in Chicago or Los Angeles or Dallas," Barrett said. "It's going to require a unique financing structure."
One revenue proposal that's emerged recently could prove pivotal: leasing 8,000 city-owned parking spaces to a private operator, in a deal that could yield millions of dollars in upfront cash.
But that idea, like some of the others, is likely to be controversial. It's unclear what would happen to the unionized city employees who operate the spaces or the $24 million in annual revenue the city now gets. City officials insist the plan would have to protect the general fund with any lost parking fees being replaced by dollars generated by the arena.
A similar plan in Chicago raised $1.1 billion to plug a hole in the city's budget. But it backfired politically when the private vendor quadrupled meter rates and a city watchdog declared that the sale price was too low.
While several Sacramento City Council members said they're open to the privatization idea, they want to study it more.
"It's definitely an idea worth exploring," said Councilman Rob Fong.
Sacramento developer David Taylor, who is likely to be involved in the project, said the privatization plan could be crucial.
"It could make the difference between getting this thing financed and not financed," Taylor said.
The city's staff is expected to ask the City Council on Tuesday for a green light to start negotiating a deal that would install Taylor and Denver's ICON Venue Group as master developers of the arena. Taylor and ICON prepared a feasibility study for the task force earlier this year.
Also in the mix is AEG, or Anschutz Entertainment Group, a global arena operator that could be called on for an upfront investment in return for the rights to manage the new arena. AEG poured $50 million into the 4-year-old Kansas City arena it manages, and has been in touch with Sacramento officials.
AEG Vice President Michael Roth attended Thursday's press event but declined to be interviewed.
While much still needs to be negotiated, Johnson and other officials congratulated themselves on putting out a plan they consider viable. Just last spring, the Kings were ready to move to Anaheim until Johnson, a former NBA star, persuaded the league to give Sacramento one last shot at building a new arena.
"Five months ago, it's hard to believe we'd be standing here today," Johnson said.
He thanked the Maloof family, which owns the Kings, for its recommitment to Sacramento.
The task force has been working quietly with the Maloofs and the NBA for months, but hard negotiations on a lease have yet to begin. On Thursday, the Kings released a statement calling the funding report "a very positive step."
Task force officials have talked about a lease comparable to the Anaheim deal, in which the Kings would have paid a 7.5 percent rent on ticket sales. Barrett also raised the possibility of the Kings making an upfront cash contribution.
"We want to make sure we're not overly generous to the Kings," said state Sen. Ted Gaines, R-Roseville, a co-chairman of the task force.
Another big X factor is the sale of bonds to build the arena and who would guarantee their repayment. No matter how strong the various revenue streams appear, Barrett said, bond buyers will likely insist on government entities guaranteeing the debt.
Raley Field's bonds are guaranteed by the city of West Sacramento, along with Yolo and Sacramento counties. A similar, multigovernment plan could unfold for the downtown arena but only if elected officials agree.
Phil Serna, a Sacramento County supervisor, wouldn't rule out such a plan. But he said it might be hard to get government guarantees because budgets are tighter than in 2000, when Raley Field was built.
"There's probably a heightened level of sensitivity to our debt situation now," Serna said.