The Sacramento Kings have announced that they’ve revised their arena deal with the city of Sacramento, and there are more new details than you can shake a stick at:
- The total construction cost has gone up from $447 million to $477 million, thanks mostly to the increased costs of developing the area around the arena site.
- The city’s share of the costs will actually go down slightly, from $258 million to $255 million (though with the value of free parking spaces, billboards, and other infrastructure, the actual public cost is probably more like $331 million).
- Instead of the Kings paying $4.7 million in annual rent (mostly from ticket tax money), the team will now be committing to a rent starting at $6.5 million a year, and rising over time.
Sacramento assistant city manager John Dangberg calls this a “significant enhancement to our financing package,” and it certainly looks like a better deal for the city, even if it still won’t come close to repaying the $9 million a year (and rising over time) in future parking revenues that the city will be siphoning off towards arena cost, let alone the city’s $13-14 million a year total bond cost for the arena. (Figure on the high side of that estimate, since interest rates have gone up, and the city has acknowledged the Kings will be putting in too much money to allow for the use of tax-exempt bonds.)
There’s a new city council report that spells out the latest agreement — I haven’t made my way through all of it yet, but it does estimate the present value of the Kings’ future rent payments at $157,555,183, which if you take the total public cost as $331 million, would mean that Sacramento taxpayers would only be taking a $173 million bath on this project. That’s better than the old deal, and possibly better than a poke in the eye with a sharp stick, though I’d want to read all the fine print before saying for sure. Not to mention test the sharpness of the stick.