Sacramento City Council votes to enter talks with 11 firms seeking to lease downtown parking

02/15/2012 12:00 AM

02/15/2012 10:51 AM

By a unanimous vote, the Sacramento City Council voted Tuesday night to allow staff to enter into detailed talks with 11 firms seeking to lease downtown parking. An agreement with one of those companies is being counted on to provide up to half of the $387 million bill for a new downtown sports arena.

In approving deeper talks with those parking firms, the City Council showed it supports moving forward on an attempt led by Mayor Kevin Johnson to create a financing plan for an arena by March 1 and avoid losing the Sacramento Kings.

It's a shift from just one week ago, when four council members voted to place the parking plan on the June ballot – a move that likely would have stalled the arena project beyond March 1.

The support displayed Tuesday is far from certain over the long term, given the council discussions looming in the near future.

City staff is in tense negotiations with representatives from the National Basketball Association, the Kings, arena operator AEG and the arena development team to round out the facility's financing plan.

Those talks are expected to continue for at least another two weeks, as the city works to create a financing "term sheet" for the arena by month's end. The council would then be asked Feb. 28 to approve that term sheet in a vote that could determine whether the Kings remain in town.

The mayor said the vote on Feb. 28 "has the possibility of being very historic."

"We are two weeks away from perhaps doing something that is the most transformative thing we've done downtown," he told reporters.

Tuesday's vote was an incremental – but essential – step for the city.

In all, 13 firms responded to the city's request seeking interest in its parking operations. That list was winnowed down to 10 teams that showed both financial strength and "technical capabilities to operate" the city's parking spaces, garages and enforcement, said Fran Halbakken, the city's project manager for the parking privatization plan. An 11th team – locally based Revitalizing Sacramento – was added to the list by the council.

If the council moves forward with the arena financing plan, it would seek formal bids from those 11 companies. The city estimates that leasing its parking could generate as much as $200 million in upfront cash.

Dozens of Kings fans packed the City Council chambers for the debate in an organized effort to urge the council to move forward. Three dozen people signed up to speak in favor of the plan, while eight spoke against the move.

"Myself and others dream of living in a city with a vibrant downtown," said Kevin Fippin, a member of fan-based efforts supporting the arena effort. "We want to live in a city that embodies the spirit that Sacramento was founded on."

Blake Ellington, another member of the fan movement, said a new arena would "create a destination city" in Sacramento.

"Let's get some cranes downtown and stop this think-small mentality that has hindered us for too long," he said.

Some speakers said they were concerned that vital city services would suffer if public money were used to help fund the project.

"There are a number of key questions that need to be answered," said city resident Ruben Ramos.

Others worried about the impact that leasing parking operations to a private vendor would have on rates.

"We are afraid that people who come down here (downtown Sacramento) will be further persuaded not to come because parking rates will go up," said Carmichael resident John Bloomer. The mayor has said the city will negotiate to have a say over parking rates if a private company takes over.

Some council members who supported Tuesday's motion – as well as other arena- related votes over the past several months – said they still had concerns about the financing plan.

Councilman Steve Cohn said in an interview that he was hesitant to support a proposed 50-year lease with a parking firm and said he wants a deal with a private firm to include revenue-sharing with the city.

Cohn, like others on the council, has also said he would not support an arena plan that harms the city's general fund budget, which pays for most basic services.

"The key thing is we have to backstop the general fund so that we're not taking away from police, fire and other departments in order to pay for the arena," he said.

Downtown parking operations pump $9 million a year into the general fund. City staffers are exploring ways to replace that revenue but have not yet discussed their plan.

The mayor said he was "very confident" concerns about the financing plan would be addressed in the next two weeks.

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