Getting a downtown sports arena built in Sacramento could boil down to wringing a lot of cash out of a bunch of parking spots.

In a long-awaited financing proposal, released last week, Mayor Kevin Johnson's arena task force identified a potential treasure trove of up to 8,000 city-owned downtown parking spots that could be leased to a private vendor.

The vendor would immediately pay the city millions of dollars, maybe tens of millions, for the right to run the spots. Similar deals have been made by city and state governments elsewhere, with mixed results.

In Sacramento, it could be a major piece of the arena- financing puzzle. A big upfront payday would reduce the amount of borrowing needed to fund the $387 million complex.

That could be important if the city, and maybe other area governments, are asked to guarantee all or part of the bond debt. Reducing the debt could make a loan guarantee more palatable to elected officials.

"It eliminates a lot of the risk," said Dan Barrett of Barrett Sports Group, a Manhattan Beach sports-finance consultant working on the Sacramento project.

The city needs a finished plan by March or the Sacramento Kings intend to leave town.

Chris Lehane, executive director of the Think Big Sacramento task force, said the arena can be financed even if the parking plan doesn't materialize. The task force has outlined a mix of potential revenue streams tied to the arena that could fuel the project.

Others involved in the arena push believe the parking idea is crucial.

"It is potentially upfront cash they could put toward the arena, and (if it is) a large enough amount, it could make the difference between getting this thing financed and not financed," said David Taylor, a prominent Sacramento developer.

Taylor will likely play a role in developing the arena, in partnership with Denver's ICON Venue Group. The City Council, at its meeting Tuesday, is expected to direct city staff to begin negotiating an agreement with Taylor and ICON.

The task force raised the possibility months ago of imposing surcharges on city-owned parking spaces as a revenue source for the arena. The proposal released last week includes the surcharge option and goes a step further by proposing to lease out the spots and get cash in the door right away. The proposal potentially includes on- and off-street parking.

"This parking piece may end up being an asset that's critical to making this whole thing happen," said task force member Michael Ault of the Downtown Sacramento Partnership, an association of downtown property owners.

The proposal is in its early stages. The City Council, which would have to sign off on the idea, could insist on protections for unionized city parking employees. The council also might limit how much a private vendor could raise parking rates.

But attaching conditions could reduce the price a vendor would offer for the lease. "That will impact on how much you get upfront," said Barrett, the consultant.

Another big issue to be negotiated is whether the city would continue to get any of the $24 million in annual parking revenue it currently collects. Lehane said the task force realizes that any lost revenue would have to be replaced with other dollars generated by the arena.

"The general fund staying whole is non-negotiable," said Councilman Jay Schenirer.

Other states and cities have raised huge sums by leasing or selling highways, parking spots and other assets. The process is known as privatization or public-private partnership.

Indiana leased out a toll road. Prisons, parking places and college dorms could be leased out under a new Ohio law. Chicago has raised a combined $2.3 billion by leasing downtown parking garages and a toll road.

The process has its critics, who say the public gives away too much. "The long-term math for the public isn't favorable," said Phineas Baxandall, who has studied such deals for the U.S. Public Interest Research Group. "They seem like free money; they're not."

One Chicago deal, in which the city raised $1.1 billion by leasing out parking meters in 2008, caused political grief. Chicagoans were angered when meter rates rose and the city's inspector general said taxpayers didn't make enough money on the deal.

Part of the backlash has had to do with Chicago's fiscal woes: Most of the $1.1 billion has already been spent to patch holes in the budget.

Lehane, the head of the Sacramento task force, said his group's proposal is vastly different. Instead of using the cash as a one-time budget fix, Sacramento would invest it in a project with potentially huge economic benefits.

"It's a classic example of the public being smart in using other people's money," Lehane said.

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Call The Bee's Dale Kasler, (916) 321-1066. Reporters Tony Bizjak and Ryan Lillis contributed to this report.

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