AECOM and city of Sacramento

A rendering of the proposed downtown arena released by AECOM and the city of Sacramento

Editorial: City plays hardball to acquire downtown arena site

Published: Saturday, Jan. 4, 2014 - 12:00 am

You can’t blame the owners for haggling over the price for a pivotal piece of downtown property needed for Sacramento’s proposed new arena.

The time has come, however, for CalPERS, U.S. Bank and C-III, the Texas asset management firm negotiating for the bank, to play ball and reach a deal with City Hall.

Because of the stalemate, officials are asking the City Council on Tuesday to authorize an eminent domain lawsuit that would force a sale. This is precisely the sort of public project where it’s reasonable for government to use its condemnation power.

Although the city of Sacramento has rarely exercised that authority, its hand is strengthened by Senate Bill 743, which declared that the arena is a “public use” for which the city can use eminent domain – and that it can do so before the required environmental review is complete. The measure, pushed through last session by Senate President Pro Tem Darrell Steinberg of Sacramento, also streamlines any legal action under the California Environmental Quality Act.

If the council gives the go-ahead, the city would put $4.35 million into escrow to buy the property. As The Bee’s Ryan Lillis and Tony Bizjak reported Friday, that amount is based on an independent appraisal and was wired by the Kings to the city on Thursday. The city says this action would not increase the public contribution of at least $258 million toward the $448 million project.

The eminent domain action could be filed as soon as next week, but a judge would not rule until at least 60 days later. If the city wins, it could take control of the parcel 30 days later, even before a jury decides a fair price.

The California Public Employees’ Retirement System owns the 600 K St. parcel, which contains more than half of the planned arena site and is the only property needed for the project not already controlled by the city or the Kings. U.S. Bank holds the lease on the property, which until last summer housed Macy’s men’s and furniture store.

In a statement, CalPERS said that it “recognizes the significance of the city’s downtown redevelopment efforts” and it is “confident” a solution will be reached.

It would be better for all involved if that happened before this goes to court.

Read more articles by the Editorial Board

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