Sacramento County's financial support for proposed arena not nailed down

Published: Sunday, Apr. 7, 2013 - 12:00 am | Page 1B
Last Modified: Saturday, May. 4, 2013 - 3:01 pm

Assembled hastily in a few weeks, Sacramento's arena financing plan remains a work in progress, with at least one key element yet to be nailed down.

City officials say they are counting on Sacramento County to kick in an estimated $600,000 a year to help pay the debt on the planned $448 million arena at Downtown Plaza.

But county officials say they have not had any detailed discussions with the city this year about a county contribution – and Supervisors Don Nottoli and Phil Serna expressed surprise at a recent city staff report that says "the county has agreed to contribute" funds.

"To say we've agreed, that's a stretch," Nottoli said.

Officials with both the county and city, however, said the issue does not represent a major stumbling block for the city's arena efforts.

Last year, the Board of Supervisors agreed in concept to contribute an estimated $600,000 annually to a previous effort to finance an arena in the downtown railyard. The funds would be from increased tax revenues the arena will generate for the county.

That deal fell through when the Maloof family, owners of the Kings, backed out. As a result, no details were worked out between the city and county, and the Board of Supervisors did not vote on any final agreement.

As this year's deal was being pieced together, Assistant City Manager John Dangberg said he contacted Chief Deputy County Executive Rob Leonard and got his assurance that county staff still supports a county contribution.

"I asked, 'Are we in the same place?' He said, 'Absolutely,' " Dangberg said. "We talked about the fact that we'd have to come back to the City Council and the supervisors with a definitive agreement at a later date."

Dangberg said the funding source – called possessory interest tax, similar to property tax – is critical.

"It goes directly toward debt service for the bonds that would be issued," he said.

County Executive Brad Hudson said on Saturday he would have preferred more communication prior to the city asserting that the county had agreed to contribute.

"Might a little more consultation been helpful? Probably," Hudson said. "But the city pretty much had their hands full. They had a tight timeline."

Hudson said the county remains supportive of the city's arena efforts, and is willing to discuss county financial involvement as soon as the city is ready. Last year's tentative agreement, approved 4-1 by the supervisors, would be a starting point, he said.

Nottoli voted in favor. Serna also voted in favor, after persuading the city to agree to help fund county parks in return. Serna said he wants county officials to bring parks funding up again this year.

And the changed arena site may prompt some differences in the deal.

"I do think we deserve to understand the details, if assumptions are made about our participation," he said.

In another arena issue, a local watchdog group is criticizing Sacramento for including a "public sector suite" at the planned arena.

According to the term sheet, the city gets a complimentary, furnished luxury suite for "any official city purpose." The city would pay for food and beverages. The city would also get 10 complimentary tickets to Kings games.

The Sacramento Taxpayers Association called the provision "one of the dirty little details of the arena deal" that "serves the arrogant interests of city officials."

City officials countered that the suite would serve as a resource for promoting the city.

"The public sector suite would primarily be used for economic development purposes in attracting new and retaining corporations and businesses in Sacramento," city spokeswoman Amy Williams said in an email. "The suite could also be used by nonprofits and other community based organizations that do good work locally."

Call The Bee's Tony Bizjak, (916) 321-1059. Follow him on Twitter @tonybizjak.

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