Think Big Sacramento, the confusingly unpunctuated task force assigned by Sacramento Mayor Kevin Johnson to come up with a way to build a new arena for the Kings, issued its “highly preliminary” report yesterday — no, really, it says “highly preliminary” in big red letters on the top of each page — on how to pay for a $387 million arena.
The main focus of the report is what it calls “user fees,” which it defines to include ticket surcharges, concessions surcharges, parking fees — and, more weirdly, business improvement district revenues and naming rights revenues. Local businesses and naming-rights sponsors aren’t usually considered arena “users,” but given that the report declares that “public support for users fees is strong” (apparently Think Big isn’t any better at grammar than punctuation), there could be some attempted spin at work here: Look! We’re going to raise all the money with user fees! User fees good!
Except, of course, that things like ticket and concessions surcharges mean that the Kings wouldn’t be able to charge as high a price for tickets and hot dogs — since presumably they’d already be charging the most the market will bear, so a surcharge would drive fans away unless the base price were lowered. So this is really a revenue-sharing deal, which, while potentially promising from the city’s perspective, isn’t likely to make the Kings owners the Maloof brothers too happy, since if they wanted to build an arena with their own money they would have done so already.
And also except that the Think Big report also specifies that the “finance plan will require support from three areas: private investment, user fees and public participation” — so there would almost certainly need to be more public money involved. (The report does some quick back-of-the-envelope math to come up with annual revenue of between $5 million and $20 million, which is to say somewhere between “nowhere near enough” and “not quite enough” to pay for arena construction itself.) Other public funding, as laid out in a cursory flow chart, could include the sale of public land or “revenues from assets directly enhanced by” the arena, which sounds an awful lot like a TIF.
Initial reaction to the proposal from all corners could probably best be described as “wait and see.” A less preliminary plan is slated to be revealed on September 8.