Editorial: City gives Kings some leverage on arena land

Published: Friday, Aug. 16, 2013 - 12:00 am | Page 12A
Last Modified: Wednesday, Sep. 4, 2013 - 8:20 am

Eminent domain should be used very sparingly by governments to gain control of private property, even for worthy public projects. So ideally, it won't come to that to keep Sacramento's planned downtown arena on track.

But if a deal can't be done for the Downtown Plaza building that now houses the Macy's men's store, the arena is clearly a proper use of eminent domain. It would be owned by the city and would serve a public purpose that far outweighs any private gain.

Tuesday, the City Council took a first step, voting 7-2 to help the new owners of the Sacramento Kings haggle with U.S. Bank, which took control of the store last year in foreclosure. Just the prospect of eminent domain will give the Kings more leverage in negotiations.

Under the agreement, the Kings – as they should – promise to fully reimburse the city for any costs, not only the purchase itself, but also any consultant fees, legal costs or hazardous material cleanup. City Manager John Shirey assured council members and taxpayers that there will be no increase in the city's contribution to the arena, already at least $258 million of the $448 million project.

City officials say that the council likely would not decide whether to start condemnation proceedings until after the arena's environmental review is completed, scheduled for next April. The building, which Macy's plans to vacate this fall, is the only property needed for the arena that is not already controlled by the Kings, the city or JMA Ventures, which sold Downtown Plaza to the Kings.

The team made what a city staff report describes as a "generous offer" and had hoped to close the deal by June, but a tentative agreement fell apart with C-III, a New York firm hired by U.S. Bank to handle the sale. The city and Kings must also talk to CalPERS, which owns the land under the building. A new appraisal of the property's fair market value – required when a public entity gets involved – is due in about three weeks.

While controversial, eminent domain has been widely used to assemble the land for sports arenas and stadiums. Such projects have been recognized as a valid public use ever since the city of Los Angeles helped give the Brooklyn Dodgers a new home in 1958. The California Supreme Court approved that plan, and in 1968 allowed the city of Anaheim to use eminent domain to create a public parking lot for the baseball stadium.

While California voters in 2006 and 2008 defeated propositions that would have strictly limited the use of eminent domain, the end of redevelopment agencies in 2011 accomplished much the same. One reason why the Legislature dissolved the agencies was that they sometimes strong-armed private property owners for questionable projects.

Both Kings and city officials all but rule out any city help in assembling private land that might be needed for the planned development of shops, housing and offices near the arena. That's good. The public is already doing plenty to help get the project off the ground.

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