Hector Amezcua hamezcua@sacbee.com John Shirey attends the City Council meeting Tuesday where the council voted to continue exploring an arena financing deal.

Marcos Breton: Arena deals are nothing new to Sacramento's city manager

Published: Sunday, Feb. 19, 2012 - 12:00 am | Page 1B
Last Modified: Thursday, Apr. 18, 2013 - 7:45 pm

There is one man in Sacramento who knows from painful experience how dangerous it can be to erect a building for a professional sports franchise at taxpayer expense.

Long before he was Sacramento's city manager, John Shirey held the same position in Cincinnati when the Cincinnati Bengals of the National Football League fleeced that community.

Paul Brown Stadium opened in 2000 and became known as the most egregiously lopsided stadium deal in America.

Estimated at $280 million to build, it cost almost twice as much to finish. Now, while the Bengals pocket millions in revenues, Hamilton County guts its budget to pay for stadium upkeep under the terms of an odious stadium lease.

Unlike Sacramento, Hamilton County voters enthusiastically raised sales taxes in 1996 to pay for the stadium. Voters were enticed with rosy projections that the stadium would generate enough business to roll back the sales tax increase.

It didn't happen. County commissioners have had to borrow millions to bridge the gap. According to the Cincinnati Enquirer, the average homeowner in Cincinnati will have to pay $80 more a year in property taxes to plug the shortfall. The county may have to pay as much as $20 million in debt service between 2013 and 2015, while county services are cut.

To top it all off, the Bengals often have been terrible since 2000.

"I hope I'm smarter since then!" Shirey said jokingly. But Shirey wasn't the dumb one.

He was an outspoken critic of the Bengals lease. But because county taxpayers raised the sales tax to finance the stadium, and Ohio cities don't receive sales tax, Hamilton County commissioners were in charge of the deal.

The only leverage Cincinnati had was its control of 12.5 acres of land the Bengals wanted.

Shirey and the city were under intense pressure to agree to a transfer of the land to the county.

Refusing would have killed the deal, with the Bengals threatening to relocate. The city held out until it got what it wanted by wresting control of Cincinnati's riverfront from the county and the Bengals.

From his office in Sacramento City Hall, Shirey shakes his head ruefully at the memory. 

"Hamilton County made an indefensible agreement and they've come to regret it," Shirey said. "But the city wasn't harmed."

How ironic that Shirey is right in the middle of a proposed arena deal between Sacramento and the NBA.

The politics of it are fascinating.

Sacramento's proposed facility is the baby of Mayor Kevin Johnson.

Yet Johnson was the only member of Sacramento's nine-person council who didn't vote for Shirey to be hired last year. Council members who have vehemently opposed Johnson's efforts to strengthen the position of mayor were the ones who championed Shirey.

They brought him in as the anti-Kevin Johnson, a chief executive who answers to the council as a whole. When I first talked to Shirey about the proposed downtown arena last year, he seemed almost to be dreading the project.

As much as Sacramento is still in the NBA business because of Johnson, an arena doesn't get built without Shirey.

Well, guess what?

When I talked to Shirey late last week, he was bullish on the arena.

Because he is the anti-Kevin Johnson, he should have political credibility with arena opponents. He also should have credibility based on his Cincinnati experience.

Shirey is also straight out of central casting for a city manager: analytical, dark suits, not prone to exaggeration, a Spartan office with nothing whimsical in it.

He said he's been going all over town and hearing that some Sacramentans believe if the arena deal went away, there would be money freed up to open closed city pools or community centers.

Is this true?

"No," he said.

"There are people opposed to the arena who know nothing of the details of this transaction," Shirey said.

"All some of these folks really care about is their neighborhood. They don't see the city as I do, as an economic entity. Or as being in competition in a global economy."

There are also major differences between Sacramento and Cincinnati. Sacramento is not asking voters for a sales tax increase. The city will soon make public a nonbinding term sheet of deal points between the city, the Kings and an arena developer.

Sacramento will not offer up its general fund to be a backstop for cost overruns as Hamilton County did, Shirey said.

As in Cincinnati, Sacramento is operating under a deadline. The NBA set March 1 for the city to have a financing plan in place, and the threat of a Kings relocation hangs in the balance. As in Cincinnati, there is great pressure in Sacramento to do a deal on the fly. As Cincinnati proved, the store can be given away under those conditions.

Shirey said he would not do that. He's in favor of attempting to build the arena because "amenities make a community more fun to live in. An arena downtown can be a catalyst. It could help Old Sacramento and the Downtown Plaza," he said.

But he hasn't signed off on an arena deal yet – and he won't until he can analyze the terms.

"I hope to be in a place a week from now where I think the risk is worth it," he said.

It's a risk Shirey knows all too well.

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Read more articles by Marcos Breton



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