The Sacramento City Council is being asked to write its first big check for the development of a new downtown sports arena.
City development staff will ask the council at its meeting Tuesday night to free up $6.5 million in city cash, some of which will be used to hire a team of financial, design and legal consultants. The money is included within the $258 million subsidy the city has proposed contributing to the $448 million arena project at Downtown Plaza.
Of the funding, city staff has proposed using $1.78 million for consultants. The rest of the money would be used for the construction of the arena if a final financing and development plan is approved by the council following the completion of an environmental review next year.
The environmental review is under way. City officials are aiming to complete construction of the arena by 2016.
Most of the money being sought on Tuesday - $5 million - is from proceeds the city generated when it sold the downtown Sheraton to developer David Taylor in 2008. Under an agreement with Taylor, those proceeds must be used for downtown development. Taylor has agreed to allow the $5 million to be spent on the arena. While the city doesn't need most of the money right now, city staff members said it's simpler to access it all at once, and put the remainder aside.
The other $1.5 million city staff is seeking would come from the city's parking fund.
The funding, which is expected to be green-lighted by the City Council, was outlined in a preliminary arena financing term sheet approved by the council in March in a 7-2 vote.
Councilman Kevin McCarty, who voted against that plan, would not comment Thursday on the plan to begin spending that money. The other "no" vote - Councilman Darrell Fong - had not yet been briefed on the proposal.
Desmond Parrington, the city's project manager for the arena, said the public contribution to the project would not change. The city plans to chip in $212.5 million from revenue bonds backed by downtown parking operations, $38 million worth of land, the Sheraton and parking fund money, and $1 million in sales tax receipts.
Parrington said the team of consultants is needed as the city begins negotiations on the "definitive agreements" of an arena financing and construction plan with the private investment team that owns the Sacramento Kings.
"We don't anticipate any major disagreements with the ownership group," Parrington said. "Given the complexity of this project, we need to bring on someone with technical expertise. We've never built an arena before. This is a new endeavor for the city and it's got to be done right."
The City Manager's Office has proposed spending $550,000 on legal counsel. Other contracts include $200,000 for the Barrett Sports Group to serve as an arena financing adviser, $250,000 for Weston Sports and Entertainment to consult on the project's design and construction elements, and $425,000 to Walker Parking to analyze the city's parking assets.
Parrington said Weston would help guide the city on designing an arena that creates "a lively presence on L and K streets."
The firm has worked on arena projects in Louisville, Ky., Kansas City, Mo., and Charlotte, N.C.
Julian Camacho, one of the leaders of a group seeking to force a public vote on the arena subsidy, said Thursday his committee would begin its initiative signature drive on Monday. For now, the signatures will be collected by volunteers and it's unclear whether the campaign will hire professional signature gatherers, Camacho said.
The group - Sacramento Taxpayers Opposed to Pork - is seeking a special election on the subsidy. They will need to collect at least 33,000 signatures from registered city voters to qualify the initiative for the ballot.