The ball is back in City Hall's hands.
Now that Mayor Kevin Johnson's arena task force has reported that funding a new facility in the downtown railyard is possible, city officials will embark on their own vetting of the $387 million project.
They'll need help. City Manager John Shirey recommended to the City Council on Tuesday that a team of outside attorneys, investment bankers and consultants be assembled "to put together the due diligence I think we need to do."
It's unclear how much those consultants will cost and how the city will pay for them.
Officials will be working under a tight timeline as they explore which public and private funding options offered by the arena task force make sense.
Those options include revenue from the leasing of city-owned parking facilities, a federal program that allows foreign investors to invest in projects here in exchange for green cards, and various "user fees" aimed at those who would visit the arena.
Dan Barrett, a stadium financing consultant working for the city, told the council that if it is going to explore the parking lease option, "you need to be moving forward aggressively." Such deals can take up to a year to put together, Barrett said.
The city wants to have the framework for the project's financing plan a plan that will rely upon an agreement by the Sacramento Kings by the end of the year. If no concrete plan is in place by March, the Kings have said they intend to leave town.
Council members expressed optimism with the progress made so far.
"We've done this before, but frankly, we've never gotten this far," said Councilman Rob Fong, who will be part of a city team of negotiators who will work with the Kings and NBA over the following months. "I'm very optimistic."
One of the first steps in the development process will be to work with those who will spearhead the project. To that end, the City Council directed staff members to negotiate with downtown developer David Taylor and arena builder ICON Venue Group on a deal to build the facility. That agreement will come back for final council approval in three weeks.
Taylor and ICON designed the arena proposal. Taylor is well-known in Sacramento, having built several downtown high-rises and the new City Hall building.
Based in Denver, ICON Venue is one of the elite players in the world of stadium and arena development. ICON's business connections could be crucial to the arena effort. The firm is partly owned by AEG, the Los Angeles arena operator that could become another key partner in the Sacramento arena saga.
The mayor's Think Big Sacramento task force could look to AEG for millions in capital to get the project rolling, similar to the $50 million AEG invested in Kansas City's 4-year-old arena. ICON developed that arena and many others in partnership with AEG.
Meanwhile, a city analysis of the arena proposal raised a series of logistical hurdles and potential extra costs barriers that city officials said they were confident could be crossed.
Among the issues raised in the report:
While some toxic cleanup has been done at the proposed arena site, "additional remediation work will possibly be required to use the area for an arena."
The arena may require costly changes in plans for new water, sewer and drainage systems on the site.
In order to fit an arena and a new transit center in the lower portion of the railyard, the city will have to acquire an adjacent 2-acre site. Representatives of the owner, Inland American, say they're willing to do a deal with the city, but have not discussed price.
Although there are thousands of existing parking spots within walking distance of the arena site, the project likely will require 1,500 to 1,800 new "premium" parking spots close to the arena. The arena development team could negotiate with the state to share 900 spots in the juror lot at a planned new Superior Court building in the railyard.
Although many millions of dollars are already earmarked for road expansions in the railyard area, an arena likely will require even more roadwork.
A site has yet to be chosen for a basketball team practice facility.
Fong said the presence of a sports arena in the railyard could speed the development of the 240-acre site "because it's bringing private investment where there was none before."
"Everything so far has not been a roadblock," Fong said. "We're still going forward."