Sacramento officials pleased by interest in parking deal to help fund arena
01/20/2012 12:00 AM
01/20/2012 8:45 PM
Sacramento city officials said they are buoyed by a flurry of interest this week among private parking operators in a deal to finance a downtown arena.
Twenty-five entities, including most of the country's largest parking companies, notified the city they are considering applying to manage city downtown parking facilities, in exchange for paying hundreds of millions of dollars upfront to help the city build an arena.
"It's a strong list," Assistant City Manager John Dangberg said Thursday. "We're pleased with the level of response."
The city has given private companies until Jan. 30 to respond to its recently issued "request for qualifications (RFQ)."
To get an early assessment of private-sector interest, city officials asked companies to contact them by Wednesday of this week. Dangberg said some of the 25 who contacted the city may choose not to respond to the RFQ, and some may join forces. He declined to name the companies.
The city is expected to update the City Council on the parking effort on Feb. 14.
The National Basketball Association has said it wants to see an arena financing plan by March 1. If not, the league will give its permission to the Sacramento Kings to seek a deal in another city.
City officials say their downtown parking services increasingly look like they will serve as an arena-financing linchpin. The city has proposed offering operating rights to seven garages and possibly street-side parking meters and parking enforcement revenue. The contract terms, according to the request, are expected to last up to 50 years.
City officials say they have determined the upfront cash value of a parking deal is at least $245 million if garages and street parking meters are included, and at least $185 million if parking meters are not included for private operation.
City officials said operators who respond to the city request will be agreeing that the deal is worth at least those amounts.
The city intends to use that money as its main contribution toward the estimated $387 million construction cost for a new arena.
Dangberg said the city is still negotiating with the NBA, the Kings and several other potential private partners to determine how much financing those groups can bring to the table to help build the arena, which would be owned by the city. That includes money from the Kings, who would be arena tenants, and possibly $50 million in cash from national arena operator AEG of Los Angeles for the right to run the Sacramento facility.
Dangberg said those negotiations include coming to an agreement on funds to backfill the city general fund when the city no longer receives annual parking garage revenues.
Dangberg said officials hope to sign a "term sheet" with the NBA, the Kings and private partners in February. With that in hand, officials say they can ask the City Council to take the next step of launching a formal contract bid process for a private operator to run city downtown parking services.
Earlier this week, Sacramento Mayor Kevin Johnson asserted that progress on the parking deal represents a statement from the city to the league.
"We have to send a strong message to the NBA (that) we've done our part to push this forward," the mayor said.
One city councilwoman, Sandy Sheedy, continues to push for a public vote in June on using city parking to help pay for an arena. The City Council is scheduled to debate her proposal on Tuesday.
Only Sheedy and Councilman Darrell Fong have expressed support for a public vote on the arena funding package. The council has until next month to place a measure on the ballot.
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