More than one person has written to me recently with the same pointed message: The new downtown arena will be a financial disaster, they say, predicting that arena supporters like me will come to rue our brainless boosterism.
Such sentiments are very Sacramento, but let’s entertain them for a moment. Do I worry that the new arena won’t transform downtown Sacramento?
Yes, of course. Any rational person understands that every financial deal carries risks.
Sacramento is contributing $255 million to a $477 million building slated for the old Downtown Plaza. The city’s annual debt service is $21.9 million.
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Guaranteed and escalating lease payments from the Kings will cover some of that debt. But the financing plan relies on city parking revenue to grow consistently in future years – a definite risk.
As reported by The Sacramento Bee on Sunday, “Even if parking revenue grows as expected, the first few years of the 36-year financing arrangement will be tight.”
Insiders worry that another grave national recession will hit before 2021, when Sacramento will clear other debts from its books while enjoying larger lease payments from the Kings
There is simply no such thing as a risk-free project. There are always worries.
But the prospect of doing nothing was even more frightening and carried an even greater probability for lasting regret.
Many arena opponents try to muddy their position by saying they’re not opposed to keeping the Kings; they are against the “city subsidy” to build the arena.
That argument is bunk. The city’s $255 million contribution was the price of getting the deal done, so if you’re against it, you’re against keeping the Kings.
If you don’t keep the Kings, an already slumping economy loses its best-known business. Downtown Plaza remains a mess. Sleep Train Arena and the land around it is owned by Chris Hansen, the Seattle billionaire who revealed his personality flaws by trying sabotage the Kings arena after his plans to relocate the team were rejected by the NBA.
What good would have come from letting any of that happen? Nothing.
Some would argue that the city should use its parking revenue to pay for city services. One gentleman wrote that the city should use parking funds to pay for a jobs training program. OK, what jobs? At Wal-Mart?
The truth is, there were no development deals underway – or even in the offing – to match the massive investment that the Kings owners are making in Sacramento, something opponents always dismiss.
The truth is, keeping the Kings as an asset while attempting something bold at Downtown Plaza is the right thing to do on the merits – and because nothing good comes from doing nothing.