Sacramento clerk rejects Kings arena petitions, everybody warms up their lawyers

Turns out that getting people to sign multiple different versions of a petition is a problem after all: Sacramento city clerk Shirley Concolino ruled on Friday that she was rejecting the petitions to put a vote on the Kings arena plan on the June ballot, because of the multiple-versions thing, and the failure-to-include-required-legal-language-saying-this-will-be-enacted-into-law-if-approved thing, and the statements-ending-in-incomplete-sentences thing. “I’ve never seen a petition with as many flaws as this one,” Concolino said.

Of course, Concolino’s boss is Sacramento Mayor Kevin Johnson, something that ballot measure advocates noted in protesting her ruling. Sacramento Taxpayers Opposed to Pork and Voters for a Fair Arena Deal will almost certainly now challenge the petition rejection in court; the Sacramento Bee cites some legal experts as saying judges tend to interpret petition rules strictly, others that they’ll let things slide if they’re not major, so it’s anyone’s guess how things proceed from here. Except that unless things are resolved soon, there’s an excellent chance that Sacramento will be able to sell arena bonds before anyone can vote on anything, which could make the whole issue moot.

Meanwhile, the Bee this weekend ran another story about that economic impact report Kings arena boosters issued last month, this time burying the bit about how more than 90% of the impact would just be cannibalized from spending elsewhere in the city way down in the 22nd paragraph. Actual additional economic activity: $25 million a year, according to the report. Even that’s questionable (Stanford economist Roger Noll says it’s more likely $10-15 million a year), but if we take the report at its word, this means that the city of Sacramento would be better off taking its arena money in suitcases of twenties and handing them out on the streets of the city. (Especially when you consider that Sacramento residents are more likely to spend money locally than Kings players or owners, making for a higher multiplier.)

It’s the kind of thing you’d expect to see in a headline — “Even Kings supporters don’t see much new economic impact” — but instead we get
“City says Sacramento arena would be economic powerhouse; subsidy critics disagree.” Because far be it from journalists to actually try to say whose math is correct.

Sacramentans could vote on Kings arena funding measure in June, unless they don’t

Aw, man, did I forget to tell you guys that the Sacramento arena ballot petitions got certified? Well, they did, last week, and now there will be a vote on whether financing of any pro sports facility should require a public vote, which would take place on June 3. (The vote on whether to vote would take place on June 3, that is. The actual vote on the Kings arena in particular would take place in November.)

Except that the county registrar still needs to rule, possibly as early as today, on whether those multiple versions of the petition mean some should be tossed, and regardless of what she says, there will be a lawsuit over this whole thing anyway. So we probably won’t know for a while yet whether there will be a vote. Hey, here’s an idea: Why don’t we have people vote on whether to vote on whether to vote? I’ll get a petition going…

 

Warriors owner admits new SF arena isn’t happening for 2017

Remember last summer, when the San Francisco Chronicle said there was no way a Golden State Warriors arena in San Francisco would be approved in time to open in 2017, and the Warriors owners said “will too!”? Guess who was right?

Warriors owner Joe Lacob finally admitted during a KNBR interview Thursday that plans to play games at a proposed San Francisco waterfront arena starting in 2017 might not be completely realistic.

“If everything worked perfectly, our goal was to be in for 2017-18,” Lacob said in an in-studio interview with Gary Radnich and Larry Krueger. “I think that is going to be a challenge. We’re trying. We’re going to keep trying, but we need to do it right. It’s not just about getting it done. It’s about getting it done right. If it takes a year a longer, it takes a year longer. I’m not going to be concerned with that.”

The way things are going, this could be either the usual bumps in the road that end up delaying projects a year or two, or a sign that Lacob is desperately trying to keep momentum going for a project that is facing a public vote in a city that hates development so much that it’s willing to pay exorbitant rents as a result. Your guess is as good as mine, seriously.

New arena has Nets’ value soaring, Nets’ profits in the toilet

The new Forbes NBA franchise value figures are out, and the Brooklyn Nets jumped almost 50% in value for the second straight year, thanks to their new arena in the borough of artisanal mayonnaise. Which must mean they’re making money hand over fist, right?

The Nets are on track to lose at least $50 million this season even with an extended playoff run, thanks to a $101 million payroll and luxury tax bill of at least $80 million.

Um, okay, then. There are three possible takeaways from this. One, which is Atlantic Yards Report’s view, is that it doesn’t matter how much money you lose on a pro sports team, since you’ll make it up when it’s time to sell. Two would be that Forbes’ team valuation figures are on crack. (It’s worth noting that the magazine’s annual profit and loss figures have been pretty much on target when compared to data later publicly released, but their team valuations haven’t matched up that well with sale prices.) Or three, people who buy sports teams will pay crazy money to sit in the owner’s box, even if it’s to own a team that has no hope of ever turning a profit. I wouldn’t have picked owner stupidity at one time, but recent evidence has me less certain.

Cleveland residents could vote in May on $160m in new tax subsidies to Indians, Cavs, Browns

One of the drawbacks of the Googlocene is that everything hangs on keywords; and so, because it didn’t come up in my various searches on “stadium” and “arena,” I completely missed Tuesday’s raucous Cuyahoga County council hearing about putting a measure on the May ballot to extend alcohol and cigarette taxes for 20 years and give the proceeds to local sports teams.

As a refresher: Back in the 1990s, Cuyahoga County built a passel of sports venues for the Browns, Indians, and Cavaliers, funding them primarily with tax surcharges on cigarettes, beer, and wine. (Upside: Drinkers and smokers don’t have organized lobbying groups. Downside: “Sin taxes” hit the poor far harder than the rich, who can only drink so many snifters of cognac.) Those taxes are set to expire next year, and the local sports teams see this as a great opportunity to get even more public money for upgrades to their facilities — everything from new water heaters to “replace obsolete scoreboard system,” which I guess fails to meet modern standards of humongosity — without “raising taxes,” since extending taxes that were set to expire doesn’t get counted as raising taxes for some reason.

Under the new plan, the sin tax would be extended for 20 years, raising about $13 million a year that would be directed to the teams. The Cavs and Indians are looking to go roughly 50-50 with that money, though the Browns are expected to demand something as well, albeit a lesser amount given that the Browns are already getting $2 million a year in added city subsidies for their own stadium renovations. The total present value would be about $160 million if the sin tax keeps bringing in the same revenue as it does at present, possibly more like $200 million if inflation causes it to rise.

The original leases on the three venues require the county-owned Gateway Corp. to pay for maintenance on the buildings, and Gateway officials insist that if the sin tax extension isn’t passed, the county would need to either raise the funds some other way, or risk having the teams break their leases and potentiall move elsewhere. That seems a pretty minor risk — there aren’t any open baseball or basketball markets close to Cleveland’s size (#18 in the Nielsen rankings), and while NFL teams don’t care as much about media markets, the Browns just got their own boodle to keep them happy — but it’s apparently the main justification for throwing a couple hundred million dollars in new money at Cleveland’s sports team owners.

The council is set to vote on holding a public ballot measure by the first week in February; if it’s approved as expected, then we should have quite the fun next three months talking about all the economic and ethical ramifications of this. Or just about the power of yes.

Miami county commission to mayor: Give Heat some money, already

The Miami Heat play in a publicly subsidized arena that opened in 1999, and have a 30-year lease that doesn’t expire until 2029. They’re asking for about $66 million in future subsidies to fund renovations they want to do to their arena; Mayor Carlos Gimenez has been negotiating with the team, which like most negotiations involves a lot of staring each other down across a table.

So, naturally, the Miami-Dade County Commission has voted unanimously to undercut their guy by telling him to hurry up and make a deal:

On Wednesday, the commission voted unanimously to direct Mayor Carlos Gimenez to sit down with the Heat, whose executives are seeking a 10-year extension of the deal that lets the team play at the arena and receive about $6.5 million a year in hotel taxes to subsidize operations.

The agreement doesn’t expire until 2029, but the Heat has been trying to capitalize on its back-to-back championships to extend the terms until 2039 in exchange for a significant upgrade to the 14-year-old arena.

“They’ve gone back and forth, but things have not finalized,” said Commissioner Bruno Barreiro, who sponsored the measure “to bring an ending to this.”

If there’s an upside, it’s that at least Barreiro backed away from his initial resolution to declare that Gimenez should “finalize” negotiations by February 22, which would really be the county holding a gun to its own head. Plus, the commission authorized spending up to $50,000 to hire a consultant to advise the county on its lease extension talks, which is something more cities should do to avoid terrible leases. Hopefully the first thing the consultant will advise is “Don’t set deadlines for yourself, especially when LeBron James may leave after this year and reduce the Heat’s leverage, what are you, stupid?”

Heat offering to stay put 10 more years in exchange for $66m worth of arena renovation subsidies

The Miami Heat’s arena deal is one of the weirdest in pro sports, thanks to a last-second switcheroo that the team pulled in order to win a public vote back in 1996. With time running down and the vote looking close, the Heat owners decided to scrap their original plan in which the city would pay for a large chunk of the arena costs, and instead pay for the entire construction cost themselves — but in exchange for $6.5 million a year in “operating subsidies” from the county. It came to the exact same thing in terms of who was paying for what, but it sounded better to voters, and the arena measure passed.

Now, with the operating subsidy deal set to expire in 2029 (only 15 years away!), the Heat are looking to do some renovations to AmericanAirlines Arena, and want to get the public to help pay for them the same way they did the original construction:

The current deal expires in 2029, and the Heat said it wants to work out an extension through 2039 now in order to invest in more upgrades at the county-owned arena. A county commissioner is pushing the mayor to get the deal done by March…

In November, team lobbyist Jorge Luis Lopez said a new deal may require as much as $17 million a year in public subsidies to produce the kind of renovations that will keep the arena competitive. Marquez declined to say what the Heat was asking for, or whether the team wants to increase the current $6.5 million subsidy as part of a new deal.

“There have been numbers thrown around,’’ Marquez said.

Those are some numbers, all right, so let’s crunch ‘em. If the Heat are really looking for $17 million a year over ten years, starting in 2029, then in current value, assuming a 5% annual discount rate, that would be … I get $66 million. Which is less than the county kicked in the first time, but then it was getting a promise by the team to stay put for 30 years, whereas here it would only be extending the Heat’s lease by 10 years. That seems like a good candidate for a dictionary illustration to me, but let’s wait and see where the numbers land after they’re done being thrown around.

Sacramento officials must testify on alleged hidden land subsidies

A Sacramento judge has ordered that city councilmember Kevin McCarty can be subpoenaed to testify in a lawsuit charging that — you know what, I have to go on the radio on half an hour, let’s let the Sacramento Bee explain:

In a statement filed in court, attorney Patrick Soluri said McCarty told him the city gave the Kings a secret subsidy intended to reimburse the Kings investors for the fact that they were “overpaying” for the franchise. The new owners bought the team in a deal valued at an NBA-record $535 million.

Also, Soluri said McCarty told him [city economic development director Jim] Rinehart felt the city had seriously undervalued city land that is being given to the Kings as part of the deal. Soluri’s clients, a group of citizens fighting the deal, believe the true value of the subsidy is well above $258 million.

McCarty, who opposes the subsidy, said Tuesday by email, “I certainly have no problem answering tough questions during these legal proceedings.”

I’m not sure what makes this part of the Kings deal any more “secret” than the rest of it, given that what’s been announced already doesn’t really add up, but if the city allegedly knew it was cooking the books but didn’t say so, I guess that’s news. McCarty and Rinehart now both have 20 days to be deposed in the case; if nothing else, it should provide some entertainment right about the time that Cemeterygate starts to die down.

Sacramento pro-arena group holds press conference in cemetery, because that’s where dead people live

As several readers have now pointed out, when I wrote on Friday that the Sacramento Kings arena vote squabble couldn’t get any more ridiculous, I apparently spoke too soon:

A group supporting the construction of a Sacramento Kings arena is in hot water from both sides of the debate after holding a press conference in a cemetery on Friday.

I’m sorry, in a what?

The group clarified on Twitter that the location of the conference was meant to highlight signatures of dead people found on petitions submitted by Sacramento Taxpayers Opposed to Pork.

If you want video, you can find it here. At this rate, I think maybe Sacramento should give up on this whole basketball thing and just construct a building where people can buy tickets to watch STOP and The4000 face off for the next 30 years.

Sacramento arena petition battle getting ridiculous in too many ways to fit in a headline

There were a bunch of developments in the Sacramento Kings arena saga this week, and fortunately Sactown Royalty has summarized most of them for us. But I’m still going to summarize them even more, because that’s how the Internet rolls:

  • The counting of petitions to put the arena deal up for a public vote in June, already complicated by such matters as the mayor’s pro-arena group trying to demand that the petitioners pay to have the petitions counted, got even more complicated with the report (also from the same pro-arena group, the crazily named The4000) that the petitions were issued in five (or maybe eight) slightly different versions. This is either a major crisis that will require going back to the beginning and doing a recount, or a minor issue that in past petition cases hasn’t caused any problems at all, depending on who you ask. Or, more likely, grounds for a lawsuit.
  • If you’re wondering how the petition validating is going otherwise, Mrs. Lincoln, of the first 8,518 signatures to be checked, 67.7% were deemed valid, somewhat ahead of the 62% validity rate needed for the ballot measure to go through.
  • There could be an initial ruling soon in a lawsuit claiming that the city illegally offered under-the-table inducements to the new owners of the Kings to help get them to buy the team, with the plaintiffs currently trying to depose city councilmember Kevin McCarty on the subject. Which seems like a reach, but we’re talking about a battle here that’s currently turning on petition typos, so really, anything is fair game.
  • Meanwhile, Craig Powell of Eye on Sacramento writes that the city is trying yet another tack to get around a possible June vote, by pushing up the sale of arena bonds to 14 days before voters would go to the polls. That could be difficult — as the Sacramento Bee has previously noted, petitioners could always go to court to try to delay the bond sale until after the vote, and “it’s also difficult to imagine that the bond could get through the legal and underwriting process with a ballot measure pending” — but we’ve certainly seen these sorts of shenanigans before.

In sum, then, the arena battle is still a great big steaming mess, and everyone could save a lot of time and legal fees by choosing a simpler method of resolving it. Like, say, arm wrestling.