Kings to impose Sleep Train ticket surcharge
09/20/2013 6:59 PM
10/01/2014 1:48 PM
The price of admission to Sleep Train Arena has just gone up 5 percent.
As part of a complex deal between the city and the Sacramento Kings for a new downtown arena, the team this month added a 5percent fee on tickets to all arena events. The funds will be used to speed up payoff of a $74million loan the city issued to the Kings in 1997 to help previous team owners refinance arena debt. The Kings still owe the city $62million, after making a $2million July payment, City Treasurer Russ Fehr said.
The fee is expected to be in effect for upcoming events, including a Josh Grobin concert in two weeks, Disney on Ice and Kings pre-season and regular season games. Fans who buy Kings season tickets are not subject to the surcharge, Kings officials said.
The surcharge is part of a series of expected agreements between the team and city as part of a joint plan to build a $448million arena at Downtown Plaza. The arena’s opening date is planned for fall 2016. The Sacramento City Council will be asked on Tuesday to give City Manager John Shirey approval to sign an agreement for the Kings to forward the proceeds from the surcharge to a city account.
The City Council also will be asked Tuesday to authorize the city manager to sign a deal with the Kings, allowing the city to be reimbursed by the team for a variety of arena predevelopment expenses.
The Kings agreed in March, during the drawing up of an initial arena term sheet, to pay for most predevelopment costs, including money needed to conduct an arena environmental impact report, and the fees of various legal and professional consultants working on the project.
Both Shirey and Kings officials said they are ready to sign the documents, with council approval. The council gave tentative approval to the event fee and predevelopment cost agreements when it ratified the March term sheet.
“The agreements are two of many important milestones in the development of the new arena,” Shirey said in a press statement Friday. “Both agreements protect city taxpayers by paying down the 1997 bonds and ensuring that predevelopment expenses are paid for by the Sacramento Kings.”
Under the March arena-financing term sheet, signed by the Kings and city, the Kings were to have imposed the surcharge June 1. The Kings postponed the fee for three months because of existing contracts with ticket selling companies that book events at Sleep Train, city officials said.
The March agreement also calls for the existing loan to be paid off when the Kings leave Sleep Train in 2016. However, the term sheet indicates the city likely will refinance the outstanding balance at that point. Assistant City Manager John Dangberg on Friday said the city’s willingness to refinance the loan will depend on the type of collateral the Kings provide, and the stability of debt revenue streams.
The two agreements represent the first of a handful of contracts the city and the Kings are expected to sign over the next year. City officials say the city does not bind itself to move forward with construction of the project until it approves a project environmental impact report, sometime next spring, and until it signs formal development agreements with the team, also expected next spring.
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