March 15, 2013

Attorneys press for public vote on Sacramento arena subsidy

In a public letter to City Hall, two Sacramento attorneys challenged the validity Thursday of public funding for a downtown arena and said they may seek a public vote on any city-approved funding action.

In a public letter to City Hall, two Sacramento attorneys challenged the validity Thursday of public funding for a downtown arena and said they may seek a public vote on any city-approved funding action.

"If the proposed subsidy is similar to what the City Council approved (during arena efforts) last year, our coalition will likely file a referendum petition so that the voters will be able to decide the matter," they wrote.

The attorneys, Patrick Soluri of Soluri Meserve, and Jeffrey Anderson of Cohen Durrett, say in the letter they represent a "nascent coalition ... concerned about the city's proposal for a significant public subsidy to keep the Kings NBA franchise in Sacramento."

The pair declined in an interview to say how many people are in their group, or offer names. The 14-page letter contends an arena would not be an economic catalyst for Sacramento, and that a public subsidy may be an "unlawful gift" of public funds, even though arena subsidies have been ruled legal elsewhere.

The letter concludes by saying the group will back off its call for a referendum if the council voluntarily puts a subsidy to a public vote.

"The city needs to think long and hard and provide a robust debate before it invests significant resources into a project that evidence overwhelmingly shows will not provide economic benefit to the city," Soluri said.

Sacramento Mayor Kevin Johnson and other city officials contend a new arena being discussed for the Downtown Plaza site will provide a positive economic benefit, and that it has strong support in Sacramento.

"We know that there is a breadth and depth of support for a public-private partnership to build a downtown-based arena that will create thousands of jobs and transform the downtown, all while putting the taxpayers first and protecting the general fund," Johnson's spokesman Ben Sosenko said in an emailed statement.

City officials say they are negotiating with representatives of businessmen Mark Mastrov and Ron Burkle in hopes of pulling together an arena financing term sheet to be presented to the public next Thursday, and to the council the following Tuesday. Mastrov and Burkle recently sent a letter to the NBA saying they would like to buy the Kings from the Maloof family to keep the team from moving to Seattle.

That term sheet is expected to contain a city commitment in the $250 million range. City officials say they can come up with that money by bonding against future city downtown parking revenue and possibly selling some nearby city land for private development.

Sacramento City Attorney Jim Sanchez agreed that a council "final" action on an arena deal could be subject to a referendum, but he said the expected council vote on an arena financing term sheet is not a final council action.

If, down the road, the council approves a final deal, and finishes an environmental assessment, opponents of that deal could initiate a petition drive to put a referendum on the ballot, Sanchez said.

In that case, they would need to gather legal signatures equivalent to 10 percent of the voter turnout in the previous general election. In Sacramento, officials have estimated that number at about 20,000 signatures.

Opponents of the new 49ers stadium under construction in Santa Clara tried to push a ballot referendum to block the city's $850 million loan, but were brushed aside by the City Council last December.

The council declared its vote to approve the loan was an "administrative" act, not subject to voter approval.

Voter approval is typically necessary when a government seeks to raise taxes – as the city and county attempted, unsuccessfully, when they tried to raise money for a new Kings arena in 2006. Sacramento city officials have indicated they are not inclined to propose any general tax increase to fund a downtown arena this time around.

Call The Bee's Tony Bizjak, (916) 321-1059. Follow him on Twitter @tonybizjak.

Editor's note: This story was changed March 15 to correctly attribute an email statement from Mayor Kevin Johnson's spokesman Ben Sosenko.

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