The race to build a sports arena in downtown Sacramento hit a new gear Tuesday night.
With a pair of pivotal votes, the City Council gave its blessing to hire a panel of consultants to dive into the project and approved entering into an exclusive agreement with a development team to build the $387 million facility.
However, the debate over whether to spend $555,000 on the consultants including $375,000 from the city's battered general fund budget drew the first City Council opposition to the arena discussion since the city's latest stadium push gained momentum earlier this year.
In the end, the council voted 7-2 to approve the spending plan. Council members Sandy Sheedy and Darrell Fong voted against the plan.
Councilman Rob Fong said the funding was "a modest investment in the grand scheme of things that will lead us to some real investment in this city."
Mayor Kevin Johnson described the consultant fees as a worthwhile investment in a project that could bring thousands of jobs and billions of dollars to the region.
Sheedy argued that, following years of service cuts and layoffs in the city, there is "a limit to what we can do in terms of funding an arena." She suggested taking the spending plan to the voters next June. "We are moving ahead with money that we can't spend," she said.
Darrell Fong said he had "serious concerns" that the city was footing the bill for consultants' work without other local governments chipping in.
City Manager John Shirey recommended hiring a team of lawyers, investment bankers and other consultants to help the city look at potential funding sources, plan for the project's construction and help represent the city in negotiations with the Sacramento Kings and the National Basketball Association.
Shirey said he understood using city money would be "open to second-guessing," but as the city works through the development of an arena, "we will be sitting down with people that really know their business."
One of the contracts approved was a $125,000 agreement with Barrett Sports Group, a sports facility financing consultant that has already served as a city consultant on this issue. Other contracts will pay for parking experts, legal counsel and municipal financing consultants.
The $180,000 earmarked for parking experts would come from the city's parking division. The mayor's arena task force said millions of dollars could be raised for the project by leasing city parking spaces and garages; that arrangement could also help the city even if an arena is not built, officials said.
The rest of the consultants would be funded by the general fund the part of the city budget that pays for most basic city services.
The experts will be working under a tight deadline. City officials have been urged to explore the parking revenue element of the plan over the next few weeks, and Johnson has said he wants the overall arena financing plan in place by the end of the year.
The mayor said it was possible that the cost of the contracts could be reimbursed to the city by a private investor in the project.
City officials are in talks with arena operator Anschutz Entertainment Group to provide upfront financing to the project, run the facility and take in arena-related revenue. Johnson described the talks as "very productive."
By entering into an agreement with prolific downtown developer David Taylor and arena expert ICON on Tuesday, the council lets the developers seek a business partner to invest, such as AEG.
The agreement will run through March 1, 2012, the deadline for the city to establish a concrete arena plan or risk losing the Kings.
KCRA: City council votes to pay for arena consultants - Sept. 27, 2011