Sacramento County parking lot revenue could help arena deal
02/24/2012 12:00 AM
04/18/2013 7:45 PM
Asked by the city for help in financing an arena, Sacramento County officials countered Thursday, saying the city could receive the money from parking at three county lots during arena events – if the city commits at least $500,000 a year to county parks.
Sacramento Mayor Kevin Johnson and City Manager John Shirey quickly responded with a joint statement calling the county "a true partner" and saying its offer represents "a positive step forward."
"Key details will need further exploration, but today shows both city and county leaders are committed to a win-win that protects taxpayers and ensures the jobs, revenue and economic development of a new entertainment and sports complex becomes a reality for our entire region," the joint statement said.
The county offer, which still needs to be approved by the Board of Supervisors, came in response to a last-minute city request to use the downtown county lots for night and weekend parking for its planned arena in the nearby downtown railyard, and to keep all parking revenue generated during events.
The city also asked the county to turn over a portion of new revenue – from possessory interest taxes – that an arena is expected to generate for the county.
The city request came just one week before the NBA's March 1 deadline for Sacramento to have an arena financing plan in place.
The city and the NBA issued a joint statement Wednesday saying financing negotiations between arena stakeholders are constructive and that the sides hope to reach an agreement by next Thursday.
City officials said they feel they have done their part by agreeing to put in an estimated $200 million the city expects to get by leasing downtown parking garages to a private operating company. The city also may sell property to generate cash for the $387 million arena deal. The remaining funds are expected to come from the Sacramento Kings, who will be arena tenants, and from private companies.
But Johnson acknowledged this week the city is still searching for supplemental funds to bolster its contribution to the arena package. Shirey sent a letter Wednesday to County Executive Brad Hudson saying the city needs the county's help "to close this deal."
"Successful completion of an entertainment and sports complex depends on the county's participation," Shirey wrote.
Johnson met with Supervisor Phil Serna this week to make his case for county help.
Serna said it was his idea to hinge any county assistance to the city on at least $500,000 in annual funding for the county's cash-strapped parks system.
"I don't think it is too much to ask," Serna said. "We have some real dire needs, frankly, for parks."
The county has been forced to cut its park ranger contingent in half in recent years, Serna said.
The Board of Supervisors will formally take up the arena issue at its Tuesday meeting. The city has requested an answer by that date.
The board will be asked to vote on a resolution that stipulates "the county is willing to support the project provided that there be no new taxes on county residents, no adverse impact to the county's general fund, and no imposition on the county's credit rating or debt capacity."
"I think there should be support for this on the board," Serna said.
The county estimates the city could make $2.5 million annually from running the three lots during events. The lots in question are the two-story garage north of the county administration building at Seventh and H streets, the jury lot at Eighth and G and streets, and a garage behind the sheriff's office at Seventh and F streets. In total, the lots hold 1,900 parking spaces, 1,500 of which the county said could be available for city use. They now sit mainly unused on nights and weekends.
County officials also say they estimate the county would be passing on about $1 million in new possessory interest taxes from the new arena to the city.
Supervisors Don Nottoli and Jimmie Yee told The Bee they are willing to consider the city's request to use the parking lots.
City arena officials have been expecting to gain several million dollars in revenue from using the three parking garages during event nights.
City officials have said there are other potential revenue sources besides the county's parking lots. They include ticket surcharges, cell tower leases and arena signage.
That money could be used to help "backfill" the city's general fund for the $9 million in annual revenue the city will lose if it privatizes its parking operations to fund the arena.
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