May 21, 2014

Sacramento Kings press ahead with arena while opponents plan petition drive

With City Council approval behind them, the Sacramento Kings on Wednesday launched what they say will be a fast-track effort to build a modern arena in the heart of downtown Sacramento. But, as has been the pattern in Sacramento’s long-running and convoluted arena drama, the team and city may yet have a hurdle to jump. A small group of deal opponents says it is organizing what appears to be a late-hour effort to stop the project.

With City Council approval behind them, the Sacramento Kings on Wednesday launched what they say will be a fast-track effort to build a modern arena in the heart of downtown Sacramento. But, as has been the pattern in Sacramento’s long-running and convoluted arena drama, the team and city may yet have a hurdle to jump. A small group of deal opponents says it is organizing what appears to be a late-hour effort to stop the project.

Local attorneys Patrick Soluri and Jeffrey Anderson say they hope to form a political action committee in the next few days and launch their own fast-track project: a petition drive to bring the city arena subsidy to the voters. The city, they say, ignored the will of the people.

It was unclear on Wednesday what the group would need to do to put the arena deal on the ballot, or whether it even has the right to petition for a vote on the $477 million deal for a new arena at Downtown Plaza. City officials and an election law expert said their reading of state election law shows opponents have very little room to mount a challenge.

Kings executives shrugged off the latest controversy Wednesday. “Big projects generally draw some lawsuit or other drama,” team President Chris Granger said. “We’ve dealt with obstacles this entire time We’re going to push forward.”

He said workers will be at Downtown Plaza this week preparing for demolition this summer of some buildings, and said new arena steel will rise by fall. The team aims to finish the building by fall of 2016.

Granger spent the morning speaking to news media members, team owners and other visitors at the unveiling of the Kings’ new sales and promotions office downtown, called the Experience Center. The stylish, loft-like suite overlooking the arena construction site offers potential sponsors, luxury suite buyers and others the opportunity to take a high-tech virtual reality tour of the arena, view a full-scale mock-up of a luxury suite, and try out plush new arena seats.

“We want this to be a nice little appetizer for people to get them fired up for our move downtown,” Granger said.

The unveiling and the legal commotion followed a festive, circus-like meeting Tuesday night at City Hall that ended with a 7-2 council vote to partner with the Kings on an arena that city leaders say will be a catalyst for redevelopment in the downtown core. After the vote, Mayor Kevin Johnson leaped from his seat and thrust a jubilant fist in the air, council members hugged on the dais, and arena supporters posed for photographs with the team’s bevy of owners.

“I consider this Sacramento’s finest hour,” Mayor Kevin Johnson said. “Truly our finest hour.”

City officials formally signed the deal documents on Wednesday.

The city’s 35-year agreement with the Kings requires the city to put $255 million in value into construction. The city will also allow the Kings to control Downtown Plaza parking and erect six digital billboards alongside freeways. The Kings will put up the rest of the funds. The city will finance its portion mainly by bonding against future revenue from city parking garages, parking meters and citation fees. The Kings also will make lease payments that will start at $6.5 million annually and eventually rise to $18 million.

Sitting in his ground-floor office in a historic downtown Victorian on Wednesday morning, attorney Soluri blasted the city for not allowing the public to vote on the deal. He and Anderson said they plan to put together an opposition group in the next few days and could have signature gatherers on the street as early as next week.

“Our goal is to stop the public financing,” he said. “(The deal) does not represent the will of the people. These officials have completely abandoned their duty to represent the ordinary citizens of Sacramento.”

City officials and an election law expert dispute Soluri‘s assessment of what aspects of the complex arena deal can be challenged at the ballot box, as well as how many signatures he needs and how long he has to get them.

Soluri said his reading of state law tells hims the group will need about 12,900 valid signatures of city voters, and has 60 days to get those signatures.

City Clerk Shirley Concolino disagreed, saying the City Council action approving the revenue bonds funding the arena is not subject to a referendum because it was passed through a resolution. Only ordinances, which create permanent laws in the city, can be reversed by voter referendum, she said.

The council adopts many financial decisions through resolutions, including the city’s annual budget.

Some of the actions taken by the council on Tuesday, though, were through ordinances, including the arena’s development agreement and the rezoning of some city parcels to allow digital billboards. In order to reverse those decisions, opponents would need to collect more than 22,000 signatures in the next 30 days, Concolino said, not 12,900 in 60 days.

Assistant City Attorney Matt Ruyak agreed with Concolino, saying the arena financing plan can’t be challenged by a voter referendum because the plan isn’t an ordinance.

“It is our legal opinion that it is not referable,” he said.

Ruyak compared the council’s authorization to issue bonds – the core of the financing plan – to “a contract for paving of the streets,” which he said can’t be the subject of a referendum.

Jessica Levinson, an elections expert at Loyola Law School in Los Angeles, said Ruyak’s interpretation of the law “seems correct” and the financing plan isn’t subject to referendum.

If Soluri and Anderson are legally able to conduct a paid petition drive, it appears they may have to do it without the substantial financial backing they received in their prior effort to put the question on the ballot. That drive, which had more than $100,000 in backing, collected more than 20,000 signatures over six months, but was thrown out by a judge because proponents failed to comply with election law. The effort was backed with a secret $100,000 donation from Chris Hansen, the man who had attempted to buy the Kings and move them to Seattle.

Anderson said he and Soluri expect their effort to be funded mainly by people offering small sums. One of the main financial contributors to the previous anti-deal petition drive, Chris Rufer, a Libertarian Party agribusinessman, said this week he wasn’t familiar with the new effort. The Western Electrical Contractors Association, a group that also spent heavily on the earlier effort, has decided not to fund this referendum, the group’s lobbyist Richard Markuson said.

Another arena opponent, Jim Cathcart, said Wednesday that he and a handful of others intend to sue to stop the deal under the California Environmental Quality Act, alleging that the arena is “hideously designed” and will cause traffic, noise and public safety problems, including riots after games. They also are challenging the constitutionality of a new law, SB 743, that gives the arena project extra protections against CEQA lawsuits.

A successful CEQA challenge could cause hiccups with the city’s financing package, although not enough to derail the project. City Treasurer Russ Fehr said the city might have to delay issuing bonds while any CEQA cases are pending. That would mean sticking with the city’s interim financing package longer, he said.

Asked about any potential challenges to the deal, Mayor Kevin Johnson said after the City Council vote: “We’re not going to let any sideshows or distractions steal our moment. We’re not afraid of somebody moving the finish line.”

Todd Chapman, head of JMA Ventures, the company that will act as master developer for ancillary development at the site, said stores, restaurants and the movie theaters on the western portion of Downtown Plaza will remain open during construction, although they also may get a face-lift as part of a plan to integrate the west portion of the mall with the arena and new plaza.

“We look at this as an opportunity to revisit some of the the older elements of the plaza that we can modernize, make it more contemporary,” he said.

Chapman said he has talked this week with Macy’s officials about the possibility of creating a new entrance to Macy’s on the side of its building facing the arena plaza.

“They are committed to this project,” Chapman said of Macy’s, which has operated a popular store on the site for 50 years. “They are excited. It is a great opportunity for Macy’s. They are looking to regain some of the strength they have had at that site over the years.”

Related information:
•  Editorial: Now that the Kings arena deal is approved, much work remains to be done
•  Sacramento Kings arena vote at City Hall
•  Video: Kings Experience provides glimpse of new arena amenities
•  Live chat replay: Arena deal is OK'd - are you pleased?
•  'Sacramento's finest hour': Council OKs new Kings arena

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