Kings say new arena will be bigger, smaller, more expensive, not more expensive

According to the Sacramento Bee, the new $477 million Kings arena, being built with about $226 million in public subsidies after years of bitter fighting, is needed to replace the “outmoded and inadequate” Sleep Train Arena that had among the fewest seats in the NBA, even though the new arena will also have among the fewest seats in the NBA, but that won’t matter because it will have more luxury suites, but only 34 instead of 30 because NBA teams have learned it’s not good to have too many luxury suites especially in a city like Sacramento with no major corporations, but there will be more high-priced seats anyway but there won’t be a “massive” price increase but listen it will make more money it just will that’s the whole point don’t ask questions okay?

Anyway, Kings President Chris Granger promises that the lower seating bowl at the new arena will hold 10,000 fans instead of 7,800 at the old one, which will bring fans closer to the action because being at the back of a larger lower bowl is somehow better than being at the front of a closer upper bowl? It must be some kind of non-Euclidian geometry thing. I hear modern architects are doing great things with toroidal space.


17 comments on “Kings say new arena will be bigger, smaller, more expensive, not more expensive

  1. Half a billion for 1,200 more seats and 4 more luxury boxes? That’s like rebuilding a car engine with an IKEA allen key for slightly more horsepower.

    (Yes some buildings are dilapidated, but this strikes me as “Hey, let’s renovate this for $150M!”)

  2. The current arena has tons of parking and a great seating bowl (gradual pitch, few seats that don’t face center court, good legroom), but everything else will be way better. The biggest reason for the new arena is to move locations, anyway. Otherwise it’d be nigh impossible to justify the tax money.

  3. Dave, Those 1,200 seats are just a comparison of the bowl seats. Current arena capacity is 17,317. The new arena will have a capacity of 17,500.

    In other words, half a million – $300 million (sorry Neil) from public subsidies – for 183 seats.

  4. Since when is this a $226M subsidy? Even the proponents say $256M (but they say private companies are giving more than $200M for a public property; in other words, it’s SBH subsidizing government, not the other way around — which is utter bullshit, since SBH will control the building), with an authorization to sell up to $325M in bonds, plus a whole bunch of publicly-owned property that, apparently, has a value of $0…

    Even the proponents say the City will be forking over at least $256M. I’ll take that as a typo, Neil.

  5. I don’t provide those hotlinks just for kicks, people. If you click through, you’ll see that $226m is the total loss that Sacramento would take on the deal, after factoring in the Kings’ rent payments.

    Now, you could argue that the Kings should be paying rent anyway, so the entire $331 million or so that Sacramento is fronting (including the value of free parking and billboards, etc.) is the actual subsidy figure. Either way — “subsidy” isn’t really an economic term with a fixed meaning, beyond “something you’re getting that you wouldn’t be normally, whatever ‘normally’ means.” The point is, Sacramento would be kicking in well over $300 million, but would get some of it back in rent, and end up with around a $226 million hole.

  6. And, again, I can’t believe how few of us are sickened by the LEED scam.

    It’s extremely poor policy to base laws on LEED. Might as well put Feng Shui in the building code.

    More on the LEED scam:

    http://washingtonexaminer.com/article/2542087

    I’m all for using metrics to increase building efficiency, such as the Energy Star rating system… LEED does not work well, though. So why base tax policy on it?

  7. (Once you total all the bonds, the value of the properties and the electronic signs, we’re pushing $400M. The bonds themselves will be $325M — don’t be surprised if they take all of that, and then later come back and give us their version of the misunderestimate speech.)

    (I find it incredible that Chrome didn’t just catch “misunderestimate” when I typed it. Oy vey.)

  8. The last estimate of the present value of the future rent payments was $150m, so … yeah, we probably need a new overall estimate with the latest figures. I’ll try to work on it at some point.

  9. At any rate, the term sheets said this arena would be 18,500+ seats, and all the arena proponents said that was great.

    Now that we’re finding out it’ll gain around 200 seats, with a loss of lower-cost seats and a very large increase in more expensive seats, arena proponents are saying that’s excellent as well.

    I think we should have spent $325 and built an outhouse, just so we could hear them tell us how great that is.

    By the way, it’s not really true that seats in the lower section will be more expensive. It won’t take them long to figure out that if they don’t add a lower price tier in, say, the last 8-10 rows of that lower bowl, their dreams of 200 sold-out events will be dashed. They’ll probably cost more for the first 2 years, then reality will finally settle in. “Gee, the fans aren’t digging paying twice as much and still getting a 28 win team.”

  10. MikeM, don’t forget that Sacramentans are like everyone else in that they will embrace this new novelty for a while. Then it will get old and too expensive to attend events. The Kings will continue to suck and people will stop going.Kind of like the current downtown plaza. Twenty years ago it was the place to be and soon it will just be a distant memory.

  11. MCG, they call that the “new arena attendance bump.”

    Yes, it will happen here. It just won’t be as large as ThinkBig claimed, and in the first years, it’ll already be losing money.

    In about year 4, we’ll get a better idea of how things will go for the final 33 years of the deal. My prediction: $10M/year in losses.

  12. Modern politicians are doing great things with toroidal rhetoric too!

    I just hope ownership got everything it wanted from the public because if it didn’t, I have to wonder where our beautiful plutocrat’s paradise is headed.

  13. MikeM – Regarding building an outhouse: Don’t forget this is Sacramento. These same people approved spending $220,000 to replace a one urinal/one toilet restroom in McKinley Park.

  14. Today’s editorial in the Bee (http://www.sacbee.com/2014/07/10/6545217/editorial-dont-price-out-fans.html) is begging the kings to keep prices reasonable because “It’s all taxpayers footing more than half the bill for the $477 million arena, not just well-heeled ones.”

    Wait, I thought that the Bee reported that all of the money to repay the debt was coming from parking revenue. The “well-heeled” taxpayers will not contribute a dime toward that revenue stream. They are the ones who have a parking space as part of their contract so they don’t have to shell out money to park if they work downtown. They are the ones who will be given free parking in the VIP lot controlled by the kings. (Even if they do have to pay to park there, the revenue would go to the kings, not the city.)

    Maybe the Bee is finally admitting that taxes will be funding the arena – not parking. Even then, it is likely that a good portion of the “well-heeled” taxpayers do not live within the city limits. They likely live in Elk Grove, Fair Oaks, Folsom, El Dorado Hills, and other well-to-do suburbs and won’t be contributing tax revenue either.

  15. Neil, Are you computing the interest (presently 6.7%) in the total cost of the bonds? Because they used lease revenue bonds rather than general obligation bonds (which require a vote), we’re paying junk bond interest rates.

  16. If you click through, you will find:

    “The city will issue $298.4 million in 36-year bonds, at an estimated 6.7% interest, for an annual bond payment of $21.9 million.”

  17. The kings are now demanding that those who filed the lawsuit post a $100 million bond to cover their losses if construction is delayed. The city is also asking for a $5.7 million bond to cover its expenses.

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