Kings tripling what they charge Sacramento State for graduation ceremonies, thanks to new arena

It’s Friday, so let’s celebrate the end of a long week with a sad tale of how not to write an arena lease, courtesy of the Sacramento Bee:

The Sacramento Kings more than tripled the amount they will charge Sacramento State for commencement at the new Golden 1 Center compared to their old home, according to a document obtained by The Sacramento Bee.

Last spring, the university paid $59,842 to hold seven spring graduation ceremonies at Sleep Train Arena.

Sacramento State’s new contract with the Kings Arena Limited Partnership asks the university to pay a base fee of $50,000 plus “additional charges” not listed in the contract to have graduation at Golden 1 Center. University officials estimate those charges, which include traffic management, camera operators, lighting and stagehands will add another $140,595 to the bill – for a total cost of $190,595.

This is sad and bad for the state university campus, which will now be out an additional $130,000 that it could have used for, you know, school stuff. But hey, vagaries of the market and all, so what you gonna do, right?

Except that Sacramento’s deal with the Kings was that the city could use the new arena for nine “civic events” per year — and the Sacramento State graduation, which was previously held at the Kings’ old arena, wasn’t included. (It’s expected that all nine this year will be high school graduations.) So instead, one side effect of giving the Kings $255 million in city subsidies for their new arena is that the local university has to pay more for their graduation costs, because the venue is shinier now. It’s the kind of thing that the city could easily have remedied by demanding that Sacramento State get access to the arena in exchange for throwing public money at it, but Kevin Johnson had other things on his mind at the time.

Of course, another side effect is that the city of Sacramento is now out $255 million. You can spend the next three days determining which is the insult, and which the injury — happy weekend!


31 comments on “Kings tripling what they charge Sacramento State for graduation ceremonies, thanks to new arena

  1. Well, ARCO/Sleep Train is still open and is still being used – albeit infrequently – and is presumably still available for CSUS to have its graduation ceremonies there, for the prior agreed-upon amount.

    These are the choices we make in life.

    • If the kings are still using Sleep Train, they are in violation of their agreement with the city. I have not seen any events advertised out there since December. Local media is reporting that the parking lot is overgrown: http://fox40.com/2017/03/13/sleep-train-arena-property-overgrown-with-weeds/

  2. Move graduation to the campus football stadium. If the stadium is good enough for Phil Collins it should be good enough for graduation. Plus college can keep any concessions sales, unless they signed those away.

  3. OF Course….Sac State is a STATE school…using State tax dollars….which means that over the next 10 years the State taxpayers….Lakers and Clippers fans in Southern California and Warriors fans in the Bay Area, assuming the same fleecing per annum, are essentially giving the Kings a $1,300,000 subsidy. Not much….but I’m sure anywhere else could use the money better.

    • It’s sort of open, I guess?

      http://www.songkick.com/venues/2055119-sleep-train-arena

      I wonder what it costs to turn the lights back on and put a fresh squirrel in the generator.

      • Songkick has it wrong. If you look at Dirty Heads website (http://www.dirtyheads.com/tour), it shows they are playing in Chula Vista at the Sleep Train Amphitheater on that date.

        Sleep Train Arena’s website (sleeptrainarena.com) automatically redirects to Golden 1 Center.

          • I live in Sacramento. As far as I know, the last event held there was in December – coincidentally the CSUS commencement. The last paid event was the Ringling Brothers Circus in September, 2016 (http://www.golden1center.com/events/detail/ringing-bros-and-barnum-bailey-presents-out-of-this-world).

            I would not be surprised if the kings slipped something in like an RV show or car show after it was supposed to be officially closed. They could probably argue they are using the parking lot, not the “arena” and therefore not violating anything. I don’t pay that close attention to such events.

          • I’m two states away from Cali but from what I’ve been able to dig up, Sleep Train Arena is still standing and able to be used, even if there are no events currently scheduled there. I don’t know what shape it’s in, but how much disrepair can a 17,000-seat arena fall into in less than a year?

            I’d tell the Kings what they can do with their taxpayer-funded new arena (anatomically impossible, but worth watching them try) and use the old arena instead. ARCO Arena 1 is out because it’s now an office building used by the State.

  4. It’s an enormously stupid thing to do, PR-wise. You’re running a $multi-million enterprise and decide it’s a good idea to trade all kinds of bad press for a few bucks? Brilliant!

    Also geniuses are the college and high school administrators who decided that outdoor graduation ceremonies aren’t a thing anymore.

    • I’ve been to several outdoor graduations–my own college one included–and can’t recall one that was truly pleasant. Blistering heat, rain forest-like humidity, high winds,windy, threat of rain–I’ve seen all these. In black graduation robes even a pleasant day can feel like you’re going to die. All that being said, I’d hold this one outside in an instant to save $190,000 and stick it to that horrible Kings management.

      • Mid June in the Central Valley of CA is super hot….my wife’s graduation from UC Davis was like 100 degrees – not pleasant. OF course, we did that on campus in a 1000 seat arena – not sure why Sac State needs such a huge arena…..

  5. As noted above, there must be other places CSUS can at least consider as an option to paying the sleaze bag Kings for using the arena the taxpayers built for them?

    As with many things in life, the best option is often to simply walk away from a vendor trying to cheat you. There are always options.

    • Your last line is so true but crazily when it comes to public entities that frequently get lost. Inertia is almost impossible to overcome. I wouldn’t be surprised to see them hold graduation there at these crazy rates for a couple more years before finally deciding they can’t shuffle funds to make it work any longer. That or they’ll get the Kings to knock $20K off the total and they’ll call that a win.

  6. Not only is Sleep Train completely closed, the city, in its infinite wisdom is going to retire the debt still owed on that property by the kings by selling more bonds and giving the proceeds to the kings.

    Unbelievable! The city residents were promised that the debt would be paid in full by the kings. Now, there is and additional $45 million being given to them.

    http://fox40.com/2017/03/20/natomas-doing-ok-without-sleep-train-arena/

    http://sacramento.granicus.com/MetaViewer.php?view_id=21&event_id=2969&meta_id=493263

    • Worth reading if only for this gem about how they’re turning away people who want to redevelop the property:

      “She told the audience that there have been several offers to move into the site but were turned down because they did not fit the high-tech, innovation center goal for the arena property.”

      Now, maybe they know exactly the sort of “innovation center” they want and know one is coming along any day now to pay them top dollar. But I’ve seen many cases where properties were left to decay because nobody who would actually take the property and clean things up/tear it down was considered good enough by the powers that be.

    • Thanks for this. I didn’t see this before my post below.

      This is outrageous. Do you see what they’re using as collateral? Pieces of property we donated to them in 2014. So we gave them property they now acknowledge was worth $45M — and now that’s the security. In actual fact, they don’t care if they don’t repay the loan. “See? The City got its collateral!”. Sure, because you convinced us the property had no value to us; did it have no value to us then? Guess not.

      The Bee isn’t covering this at all. Can’t find a word of it. They want this to happen very quietly.

  7. The thing that frustrates me most here is that SBH was required to repay the 1997 loan before they could occupy the new arena. This is in the Council resolution; I can take you right to the wording if you want.

    They still have not done this. So really, they still owe us $255M + $70M — $325M.

    By the way, there have been multiple news reports of how successful the NCAA weekend was. I’m sure it did fine. But how is the area around the old arena doing? Is there zero substitution effect in Sacramento? Are we immune to the laws of economics here? Plus, instead of “Wow, this pizza parlor was busy!”, I want to see some actual numbers. The estimates were for 10,000 out-of-town visitors, with $5M in spending. I find those numbers plausible; they might even be low. I’ll assume they’re about right; that would be about $400,000 to City coffers. If they managed that every single weekend, this deal would be a huge win for the City.

    But we still won’t bring in cruise ships so we can have the NBA All Star Game. Physically impossible; our inland ship canal cannot support large cruise ships (we do get small ones).

    • Actually, that $5 million was a regional estimate. People were staying in hotels in West Sacramento (Yolo County), Roseville (Placer County), and other places outside the Sacramento City limits. One estimate I saw was less than one-third of the attendees were staying in the city (sorry can’t find the source). With a 12% hotel tax and 1% share of the sales tax, I doubt the city gained anywhere near $400,000. Most of the income from those taxes is earmarked for specific services (road maintenance, Convention Center, etc.) so very little would flow to the General Fund.

  8. I did not notice the difference in assessed value until MikeM mentioned them. The following is the list of addresses that match with the May, 2014, assessment followed by the 2017 one:

    Natomas Land: $14,815,000 vs. $26,335,000
    Lot X: $13,400,000 vs. $14,920,000
    Lot Y: $370,000 vs. $560,000
    4th and J: $1,640,000 vs. $1,970,000
    1401 H St: $700,000 vs. $900,000
    312-14 K Street (Navin’s Parcel) $830,000 vs. $1,280,000

    The city gave the kings additional property in the original agreement that is not included on this list.

    • Also notice that the old Power Balance Pavilion building is listed as one of the collateral properties.

      Re-reading this, though, from the documents — and correct me if I’m wrong here — SBH will make the payments on this new loan. For another 30 years. When the existing loan has only 10 years left on it.

      But the key here is that I think SBH will make these payments, not the City. That helps a little.

      It’s just that we donated land to SBH as part of the deal, and now this land is being used as collateral for an additional $45M loan. Call me an idiot if you want, but this sure seems like a $300M loan to me.

    • It doesn’t matter. According to the agreement, Sleep Train cannot be used for any sporting, entertainment, or community event that could be held in the new arena.

      • Correct me if I’m wrong but I believe the new arena was built without the capability to produce ice and was designed as a basketball/concert arena.

        • It does have the ability to produce ice and they have had a Disney ice skating show in the new arena. The flaw in the design is that the floor of the arena, after the chairs that can be removed from the lower area are removed, is shorter than the length of a profession hockey rink.

          I don’t know if it was planned that way so that an NHL team could not be considered or if it was a mistake.

      • The Las Vegas Knights are looking at the Chicago Wolves of the AHL as their top farm team,Currently the St Louis Blues are partnered with Chicago but that agreement ends after this year.Whether the AHL creates a 31st franchise or the Blues spread out their players over various teams remains to be seen.You could also have an AHL team move to Northern California if their was support for it.San Jose has an AHL team and the team in San Diego has done very well attendance wise.

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