Key cog in new Sacramento arena plan is future of current Kings home
03/12/2012 12:00 AM
02/26/2013 8:24 PM
Sacramento's arena project seeks not only to transform downtown but also to redefine the heart of North Natomas.
A key peg of the $391 million plan for a downtown railyard sports and entertainment center is a promise from City Hall to Natomas that the city will find a suitable new use for the 184 acres surrounding Power Balance Pavilion, current home of the Kings.
The deal approved by the City Council last week calls for the city and Kings to sell the old arena site, likely in 2015, to help fund the downtown arena. But, like other elements of the complex deal, details have yet to be worked out.
In question: Will the city and Kings be able to sell the land at the price they want? And will the city make good on its vow not to leave Natomas with a hole at its core?
It's been a hot-button issue north of the American River since plans were announced to move the Kings downtown.
For three decades, the arena has stood as North Natomas' most identifiable landmark and economic engine. It arrived long before the massive growth that brought thousands of homes to the fields where cattle and sheep once grazed.
Natomas activists say they will hold the city to its pledge to make their community whole.
"This is part of the deal," said area Councilwoman Angelique Ashby, whose vote for the new arena was contingent on redeveloping the old arena site.
Natomas residents have felt left in the cold in the past by City Hall. The community fought for years to get a fire station. A planned regional park and town center stand unfinished, years after houses went up in surrounding neighborhoods.
"We are going to need the mayor to step up to the plate and do everything possible," said Jesus Arredondo of the Westlake homeowners group. "If you are going to move that (arena), we need the same kind of energy to attract something to Natomas."
Arredondo sits on a city-sponsored Natomas site re-use committee co-chaired by Councilwoman Ashby and Assemblyman Richard Pan, D-Sacramento. The group has a short list of potential projects, including a health care center, a high-tech campus or a university.
"It's very important that whatever we do moving forward, it's a good fit between the community and that space," Ashby said.
She said she has had conversations with medical providers and other interested entities, but declined to name them.
Nothing is likely to happen on the site for several years. The Kings are expected to play in Natomas through the 2015 season, then move downtown that fall.
Officials said they may wait until then to sell the land. But a land sale and new development is contingent on some factors out of the city's control.
The federal government in 2008 ruled the Natomas area to be a flood zone, effectively creating a moratorium on new construction until Congress authorizes funding for levee improvements.
City officials and landowners say they believe the moratorium should be lifted by 2015, when the city and Kings are likely to need to sell.
The city has control of the northern 100 acres of the site. The Kings control the southern 84 acres, which includes the arena, the practice facility and most of the parking lot.
City officials say they believe their property will be worth $20 million in 2015, based on appraisals. That $20 million may be needed to close the deal on the downtown arena financing.
A Bee survey of appraisers and commercial real estate brokers familiar with Natomas properties indicates the city's sales estimate is high for today's suppressed market, but appears to be a reasonable guess of what the land will be worth in 2015.
"Right now the market is dead in the water, especially in Natomas with that moratorium," real estate appraiser Dave Jarrette said. "I don't have a problem with that price a couple years into the future."
Commercial brokers say the arena site should be highly marketable. It has infrastructure, size, freeway access, and is near the airport. The surrounding Natomas area was hot property before the flood moratorium and economic downturn, they said, and should be again when a turnaround comes.
City officials said this week that they are focused on other front-burner arena issues now, but intend to meet with the Kings soon to talk about joint marketing of the site.
"We want to sit down with them and do something they and we are comfortable with," Assistant City Manager John Dangberg said.
The Kings are expected to put the proceeds from the sale of their 84 acres toward the $73 million they have agreed to provide as arena tenants.
The fate of Power Balance Pavilion itself is uncertain. City officials say the building probably would be knocked down, at a cost of up to $3 million, unless the site's buyer has some use for it. The arena agreement notably limits the building's future use by prohibiting the Kings or another owner from competing with a downtown arena.
The city also likely will have to pay to demolish the old baseball stadium foundation on its 100-acre site, a remnant of the early days when local developers hoped to attract a minor- or major-league baseball team to Natomas.
City officials said they may solicit a developer-partner in the next year or two to help plan the site and get entitlements in place so a sale can be finalized in 2015.
The city has listed three additional, smaller properties for potential sale as part of the arena deal. It plans to move forward with the sale and re-use of its Natomas land regardless of whether it actually winds up needing the money for the arena. Dangberg said there's a possibility the city's parking garages could yield the city's entire $255 million share of the new arena cost.
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