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Arena backers say they'll keep trying

Originally published 11/8/06

Body Text As the sales tax increase for a new Kings arena in the downtown railyard went down to a crushing defeat Tuesday, the group spearheading the campaign for Measures Q and R said it will continue working to get such a facility built.

Measure R, which would have raised the Sacramento County sales tax by a quarter-cent, was failing by a 80 percent to 20 percent margin Tuesday night with 757 of 970 precincts reporting. Measure Q, a companion advisory initiative, was faring slightly better, going down on a vote of 71 percent to 29 percent.

Measure Q asked voters to bless spending up to half of the $1.2 billion raised by Measure R on a downtown arena, and the remainder on community projects throughout the county.

The Yes on Q&R leaders tried to keep the focus on the future Tuesday night with an "Rally for the Railyard" party held at glitzy Mason's restaurant. The campaign issued a news release announcing the formation of a new nonprofit group, led by the same business leaders who spearheaded Yes on Q&R, to continue pressing to get an arena built downtown, preferably in the 240-acre railyard.

"That 240 acres will someday be the crown jewel of our community," said Sacramento Fire Chief Joe Cherry, who joined Sacramento City Councilman Rob Fong, Sacramento County Supervisor Roger Dickinson and other leaders of the Q&R campaign on a stage at Mason's.

But while the revelers in Mason's tried to stay upbeat, a high-ranking official in the National Basketball Association offered a more grim assessment of the prospects for getting an arena built here. He noted that there is no alternative arena financing plan at the moment, and several previous attempts to come up with one have failed.

"The Maloofs are committed to staying in Sacramento if they possibly can, and there's certainly no interest on the part of the NBA in moving the team. But we can't figure out what to do next," said the NBA's Harvey Benjamin, who participated in ultimately unsuccessful negotiations with the city, county and the railyard developer for an arena.

Joe and Gavin Maloof issued a written statement saying they would "seek guidance from the NBA and hope they can provide suggestions about alternative means of achieving our objectives in Sacramento."

While some initiative proponents have talked about putting another sales tax measure on the ballot in 2008, Benjamin said the Maloofs can't wait that long.

"The arena, they tell me, is in terrible shape," Benjamin said. "And what if (the sales tax measure) fails again? I'm not sure we're ever going to be able to overcome the reluctance of people to pay more for school supplies so some of the money can be used to build an arena."

Opponents of the initiatives celebrated their victory Tuesday in donated midtown office space decorated with hand-drawn signs and crêpe paper streamers.

"As the voters have said tonight: A publicly funded basketball arena is not their No. 1 priority," declared state Assemblyman Dave Jones, D-Sacramento, leader of the opposition campaign. "We've got so many other community needs."

When the campaign began, Jones said, "no one thought we could pull this off. No one thought we could defeat the entire political and business establishment of Sacramento."

In the end, however, the measures' defeat came at least partly from self-inflicted wounds. The campaign suffered a major blow when the Maloofs pulled out after failing to reach agreement with the city, county and railyard developer on issues such as parking around the new arena.

The trouble started at the campaign's kickoff news conference in the railyard in early September. Civic and business leaders who had signed up to help with the campaign stood up and talked about an arena's potential to jump-start redevelopment of the long-dormant industrial site. Then Joe Maloof took his turn at the microphone. He told the assembled crowd that the arena might have to go elsewhere if the railyard location didn't work out.

Later highlights included the Maloofs' accusations that the county and city double-crossed them in negotiations and the brothers' appearance as billionaire playboys drinking a $6,000 bottle of wine in a Carl's Jr. ad. The team owners did not help with the campaign for the ballot measures or contribute money.

The city and county leaders who helped craft the measures said they have no alternative "silver bullet" in their pockets to pay for an arena.

They initially chose a sales tax because it raises a lot of money, and because it could be structured to win passage with a majority rather than a two-thirds vote.

Other potential taxes, such as those on rental cars or hotel rooms, don't pump out enough money to pay for a $500 million arena on their own. And they would likely require a two-thirds vote. A surcharge on tickets is one common way to help finance arenas, but city and county negotiators said the Maloofs have resisted that idea.

Paul Hahn, the county's economic development chief, said he's heard a lot of ideas thrown around. "Every person who sits next to me in a restaurant says they know a way to fund this," he said. "We'll go back and look at everything we've heard and see what makes sense. There is no silver bullet."

From the Maloofs' perspective, the easiest place to build a new arena would be on the 85 acres of land they own around Arco in North Natomas.

John Thomas, president of Maloof Sports and Entertainment, stopped short of saying the Maloofs want the arena in Natomas, but said the benefits there, as opposed to the railyard, were "self evident."

"Customers prefer it overwhelmingly, the infrastructure is in place, the land is in place and owned," Thomas said. "Problems that you see in the railyard don't exist in Natomas."

But politicians and business leaders who worked on behalf of Q and R said they won't support the investment of public tax dollars in an arena in North Natomas.

"We believe if you're going to spend public money it needs to be for an arena downtown, and not anywhere in the suburbs," said developer David Taylor, who will serve on the board of the new nonprofit.

MEASURE QArena financingYes 29%No 71%757 of 970 precincts

MEASURE RQuarter-cent sales tax increaseYes 20%No 80%757 of 970 precincts

The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or