The planned construction of a new Kings arena in downtown Sacramento should provide a significant boost for the area's economy and job market, a University of the Pacific forecaster said today.
Although the region's job growth will remain modest this year, the effect of arena construction should begin to be felt sometime next year, said UOP's Jeff Michael in his quarterly forecast.
Michael, director of the university's Business Forecasting Center, said California and the Sacramento area are experiencing another year of moderate economic growth this year. Prospects should improve statewide in 2014, he said, and the arena effect in Sacramento will bring a spark to the region's otherwise "tepid job growth."
Sacramentans "should be thankful" to the team's soon-to-be former owners, the Maloofs, for backing out of the arena deal proposed last spring at the railyard on the fringe of downtown. Now Sacramento has a better financial deal, with more committed team owners, and a better arena location - Downtown Plaza in the heart of the central city.
"The project has the potential to accomplish broader city goals and help other city assets like the Convention Center in a way that other proposed locations such as the railyards or Cal Expo would not," Michael wrote.
He did add that the city's arena subsidy is probably higher than the $258 million figure cited by city officials. He also said it carries some risk for the city's general fund. The city's subsidy consists largely of borrowing against future revenues from downtown parking lots and meters.
Although unemployment in Sacramento fell to 8.3 percent last month, Michael said the region's unemployment rate will average above 9 percent this year. But he added that the region's economic forecast will be revised upward soon as the impact from the arena becomes clearer.
UOP expects California's unemployment rate, currently 9 percent, will drop to an average 8.7 percent next year and 7.7 percent in 2015.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.