For Sacramento residents and visitors, the other shoe is about to drop on the downtown arena deal.
The City Council will soon be asked to approve increases in how much it costs to park on downtown streets. The proposal is expected to call for meter rates to go from $1.25 to $1.75 an hour and possibly to extend meter hours in some areas from 6 p.m. to as late as 2 a.m., The Sacramento Bee’s Tony Bizjak reported.
City officials insist that rate hikes would happen with or without an arena as part of an overall modernization of parking operations, similar to what San Francisco and other cities have already done.
Even so, there can be no denying that increased parking revenue is essential to paying for the arena. For the city’s financing plan to work, it needs an additional $4.9 million a year to help pay off the arena bonds.
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The city plans to borrow $278 million for its share of arena construction, plus reserves and debt-issuing costs. According to City Treasurer Russ Fehr, the net debt service is projected to be $19.3 million a year, depending on interest rates when the bonds are issued.
The last major roadblock to selling the bonds was removed Friday when a judge ruled that there was no fraud in the arena deal. But Fehr says the bonds will cost $2 million more a year to repay because interest rates rose during the lawsuit.
Besides the parking revenue, the city is counting on rent checks from the Sacramento Kings – at least $6.5 million a year, rising with inflation to $18 million. Under the deal approved by the council last year, the guaranteed lease payment allowed the city to avoid having to take another $9 million a year in parking revenue from the general fund, which pays for basic services.
While city officials won’t discuss the parking rate hikes in detail yet, business and downtown officials have been briefed on plans that include a test of premium pricing – allowing motorists to stay beyond the metered time limit for an extra cost. Eventually, the city may adopt variable pricing – higher rates during peak demand, such as during Kings games and other arena events. The city has bought 6,000 new smart meters that allow such pricing changes.
At least, whatever rate increases are approved will be voted on by elected officials after public hearings. Other cities, most notably Chicago, turned over their parking operations to private companies that jacked up rates with little public input or recourse.
Golden 1 Center is well under construction at Downtown Plaza and on schedule to open in October 2016. It is already sparking excitement and development downtown – a main reason to support the deal.
But nothing comes for free. If you park downtown, you’ll start paying for it, quarter by quarter.