Backers of a new downtown arena for the Sacramento Kings took a virtual victory lap through the city Tuesday and plunged into the nitty-gritty details of a $387 million endeavor that still has as many questions as answers.
City Council members started to get briefed on elements of the complicated and still tentative financing arrangement. Sacramento County moved ahead on a plan to pitch in millions of dollars.
Mayor Kevin Johnson presided at an upbeat welcome-home news conference, heaping praise on the Kings' owners and others involved in the historic deal aimed at keeping the NBA in Sacramento. Six members of the City Council appeared with him.
The mayor warned that much of the hard work is just beginning.
"I don't want us to get too far ahead of ourselves. Nobody here is celebrating yet," he told reporters at City Hall, shortly before heading to Power Balance Pavilion for the Kings' game vs. Utah.
Council members were focusing on two key areas of the proposal: a still-evolving plan to pull $200 million-plus in upfront cash from the city's parking operations, and details of the "term sheet" governing the arena development.
The term sheet, to be released to the public Thursday, will spell out who provides how much money toward construction and how revenue from NBA games, ice shows and other events will get divided among the Kings, the city and arena operator AEG.
Although it's nonbinding, the term sheet is a crucial item in the process.
Many of the fine points of the term sheet were still being committed to paper Tuesday, and some of the principal stakeholders in the deal were waiting for details to be spelled out.
It was a reminder of how sketchy the agreement remained, more than 24 hours after Johnson, the Maloofs and NBA Commissioner David Stern announced the deal at a hotel in Orlando, Fla.
"We have a framework of a deal; we don't have a term sheet yet," said Kings co-owner George Maloof. His family has promised to spend $75 million upfront on the arena, plus another $75 million in NBA game-night revenue over 30 years.
While many top officials were still recovering from red-eye flights out of Florida, there was considerable urgency around City Hall.
To get the new building ready for the 2015-16 basketball season, Sacramento developer David Taylor said, design work needs to begin within five weeks.
"It really, actually feels like it is going to come to be," said Taylor, whose ICON/Taylor team has been tapped by the city to develop the railyard arena.
At least one piece of the financial smorgasbord started to fall into place Tuesday. The county Board of Supervisors voted 4-1 to move ahead on a plan to help the city finance the project.
Under the plan, the city would get to use three county-owned downtown lots for arena parking and keep the estimated $2.5 million in annual revenue produced during arena events. The city would also get $1 million a year in county taxes that would be generated by the presence of the arena, for a total of $3.5 million.
In return, the county would keep $500,000 a year to fund its depleted regional parks operations leaving $3 million a year for the arena.
The vote wasn't the final say on the plan; supervisors were merely authorizing county staff to negotiate a deal with the city.
But the hourlong discussion mirrored the split within the Sacramento community over the wisdom of using public resources to support a sports and entertainment arena.
"This is much bigger than basketball," said Justin Marshall, representing the grassroots group Fund Arena Now Sacramento, in comments to the supervisors. "It's going to provide more nightlife."
But midtown resident Jeanie Keltner, an ardent foe of the arena, warned of "a total disaster" if the project went through.
"The public has said, 'No public money for an arena,' " she added.
Supervisors said they were confident the deal with the city poses no risk to the county's general fund or credit rating. The lone dissenting supervisor, Roberta MacGlashan, said she was disturbed that the county got the city's proposal on "very short notice."
Back at City Hall, there was a sense that Sacramento, after a decade of trying, was on track toward building a new arena and cementing the Kings' future in the city.
Councilman Steve Cohn, who has opposed previous arena proposals, said, "This one is different. It is fair to the taxpayers. This is the first time I've felt we are really going to get this thing done."
He and others on the council were chewing over one of the most crucial elements of the entire project: the city's proposal to raise cash from its parking operations.
For months, the city focused on a "concession agreement" in which the parking assets would be leased to a private operator for up to 50 years. The operator would pay a one-time fee of $200 million or more, city officials expect.
Other models have emerged, though. Of the 11 parking firms still in the running, several have proposed the creation of a public parking authority, said a source familiar with the submissions but not authorized to speak publicly.
The authority would borrow against future revenue, generating cash for the arena while giving the city more control over parking rates and other issues than the original plan. Such an authority could create a firewall protecting the city's general fund in case future revenue falls short.
The City Hall source stressed that the city will explore all possibilities. But at least one council member said she would favor a plan that gives the city more control.
"I could support that plan if it comes down to that," said Councilwoman Bonnie Pannell.
The council is expected to take two votes next Tuesday one on the "term sheet," the other to authorize staff to issue a request for proposals from the bidders on the parking plan.