Category Archives: Sacramento Kings

David Stern, who made sure Kings extorted Sacramento for cash instead of Anaheim or Seattle, has died

Posted on by

Former NBA commissioner David Stern died yesterday at age 77, three weeks after suffering a brain hemorrhage, and much of the coverage was along the lines of this:

Stern, wrote NBC Sports BayArea’s James Ham, rejected attempts by the Maloof family to move the team to either Anaheim or Seattle and “forced [them] to acquiesce and chose to re-enter negotiations with Sacramento on a potential new arena.” Ham quoted a Stern statement from 2016 that he’d told skeptics in the NBA office, “You know, guys, I used to do this when you were kicking the slats out of your crib. We’re going to keep this team in Sacramento. Between the mayor and the new owners, we’re getting that arena built. And stop, because now you’re pissing me off.”

That isn’t quite how it went down, though, or at least not the whole story. In the case of the Anaheim relocation in 2011, Stern gave the Maloofs plenty of rope to propose a relocation, but the owners got cold feet after they didn’t like the lease and TV rights deals being proposed. The Maloofs then proposed a new arena deal in Sacramento, which failed in a public vote after the owners themselves switched to opposing it. In 2013, attention switched to Chris Hansen’s bid to buy the team and move it to Seattle, but Stern carefully tempered his comments, noting that the NBA constitution requires taking into consideration “support for the team in the prior city” and any possible arena upgrades there before approving a move; the commissioner also repeatedly urged Sacramento buyers to up their bids for the team, and Sacramento city officials to guarantee public subsidies for a new arena, under pain of a potential move. Yes, eventually the NBA owners voted down the Seattle move, reportedly after Stern advocated for the team staying in Sacramento — but Stern was advocating for the team to stay after using the move threat to extract a higher purchase price and more arena subsidies, which is a different thing altogether. And even after the Kings’ future was supposedly secured in Sacramento, Stern wasn’t above rattling sabers about the team moving to Seattle after all if an arena wasn’t built posthaste.

And too, let’s not forget that Stern was in part behind Seattle losing its NBA team a few years earlier, blaming local officials over and over again for not “supporting” the Supersonics by building them a new arena, and threatening that “if the team moves, there’s not going to be another team there, not in any conceivable future plan that I could envision, and that would be too bad.” (Which could be another reason Stern was opposed to letting the Kings move there: It would have made it look like he wasn’t serious about his threats.)

The point here isn’t to badmouth Stern after his passing — after all, his job was to be NBA commissioner, and trying to leverage both new owners and cities for the most cash possible is exactly what the NBA owners were paying him to do. And he certainly seemed to have a more coherent strategy for it than some other sports leagues I could name. But it’s important not to let rose-colored mythologizing get in the way of actual history: David Stern was a guy who, faced with a bunch of owners looking for a quick cash grab from a move, replied, Calm down and let’s see if we can keep the team in town and get the money and also keep another potential expansion target in reserve, because that’s how you make the real money. Now stop, because you’re pissing me off. R.I.P.

Friday roundup: Leaky fountains, cheap stadium beer, and the magic of computers

Posted on by

The world may be on vacation this week, but the stadium news decidedly is not:

Friday roundup: Bucks say arena can fight racism, Rays in line for federal tax breaks, Falcons to get glowing bridge

Posted on by

Slow news week thanks to the holiday, but there were still a few items of note:

  • Milwaukee Bucks president Peter Feigin thinks his new publicly funded arena will help fight segregation because it’ll have a public plaza. The Chicago Tribune notes that the Bucks owners once released a strongly worded statement of support for one of their players after he was tased by Milwaukee police, so … nope, I don’t get the connection either, unless this reporter was assigned to cover Feigin and couldn’t find much else to say about his bizarro statement, so just googled “Milwaukee and race and basketball” and dumped the results into a Word file.
  • The Sacramento Kings owners are going to use computers at their arena to mine cryptocurrency for charity, which mostly serves as an excuse for the team to issue a press release mentioning themselves in the same sentence as blockchain, because we know that’s a thing. Too bad the earth is going to burn as a result, but everything’s a tradeoff, right?
  • Ybor City, where the Tampa Bay Rays want to build their new stadium (price and funding still TBD), has been tabbed as a federal “economic opportunity zone,” meaning developers can use it as a short-term tax shelter for profits that are reinvested into the area. The program is way too complicated for me to calculate at the moment just how much U.S. taxpayers would end up paying toward a Rays stadium, but suffice to say it’s one more piece of the funding puzzle that team owner Stuart Sternberg doesn’t have to worry about himself.
  • Speaking of the Rays, they’ve announced they’ll release new renderings of their stadium plans next Tuesday, which I guess makes this announcement itself vaporvaportecture?
  • The Atlanta Falcons pedestrian bridge that will now cost Atlanta residents $23 million is going to glow! And who can put a price on that, really?
  • Since it was a slow stadium news week, here’s a bonus article on how Nevada giving $1.4 billion to Tesla to open a battery factory there is looking to be a disaster, with the state ending up losing its entire budget surplus while new workers attracted to the area have driven up rents and increased local government’s police, fire, and schools costs, leaving residents with a higher cost of living and fewer services. One unemployed local who was forced to move into a motel room listed for the Guardian things she now considered unaffordable luxuries: “Ice cream. Bacon. A movie ticket.” It’s a fun weekend beach read!

Friday roundup: Beckham stadium opposition, Arizona bill to block “disparaging” team names, and oh, so many soccer stadiums

Posted on by

So. Much. News:

  • F.C. Cincinnati CEO Jeff Berding says the team still hasn’t decided among stadium sites in the Oakley and West End neighborhoods and one in Newport, Kentucky, while it awaits traffic studies and whatnot, though the team owners did purchase an option to buy land in the West End to build housing for some reason? Still nobody’s talking about the $25 million funding gap that Berding insists the public will have to fill, but I’m sure they’ll get back to that as soon as they decide which neighborhood hates the idea of being their new home the least.
  • Here’s really sped-up footage of the final beam being put in place for D.C. United‘s new stadium.
  • Indy Eleven is officially moving this season from Carroll Stadium to the Colts‘ NFL stadium, but hasn’t figured out yet whether or how to lay down grass over the artificial turf. Might want to get on that, guys.
  • San Diego is looking at doing a massive redevelopment of the land around its arena, and as part of this isn’t extending AEG’s lease on running the place beyond 2020. This is either the first step toward a reasonable assessment of whether the city could be getting more value (both monetary and in terms of use) for a large plot of city-owned land, or the first step toward building a new arena in some boondoggle that would enable a developer to reap the profits from public subsidies — Voice of San Diego doesn’t speculate, and neither will I.
  • Some Overtown residents are still really, really, really unhappy with David Beckham’s Miami MLS stadium plans for their neighborhood, and have been getting in the papers letting that be known.
  • “Can stadiums save downtowns—and be good deals for cities?” asks Curbed, the official media site of tearing things down and building other things to turn a profit. You can guess what I say, but you’ll have to wade through a whole lot of self-congratulation and correlation-as-causation from the people who built the Sacramento Kings arena to get there.
  • Tampa Bay Rays owner Stu Sternberg is still seeking as much as $650 million in stadium subsidies, with local elected officials holding secret meetings with lobbyists to make a project happen. WTSP’s Noah Pransky reports that “commissioners told 10Investigates there remains little appetite to make up the nine-figure funding gap the Rays have suggested may be needed to get a stadium built,” though, so we’ll see where all this ends up.
  • Arizona state rep Eric Descheenie, who is Navajo, has introduced a bill that would prohibit publicly funded stadiums in the state from displaying any team names or logos that local Native American tribes consider “disparaging,” which could make it interesting when the Cleveland Indians, Chicago Black Hawks, or Washington RedHawks come to town.
  • The U.S. Justice Department is investigating possible racketeering and other charges around bidding on major sports events, including American consulting firms that may have helped Russia get the Sochi Olympics and this year’s soccer World Cup. If they can’t find enough evidence to prosecute, they’re not watching enough TV.
  • I didn’t even know there was a surviving Negro League baseball stadium in Hamtramck, Michigan, let alone that there was a cricket pitch on it. Who’s up for a road trip?
  • The town of Madison — no, not the one you’re thinking of, the one in Alabama — is looking to build a $46 million baseball stadium with public money because “economic development.” They’re hoping to get the Mobile BayBears to move there, at which point the Huntsville region will undoubtedly become the same kind of global economic engine that is now Mobile.
  • An East Bay developer wants land in Concord (way across the other side of the Oakland Hills, though developing like crazy because everything is in the Bay Area right now) that’s owned by the BART transit system, and says they’ll build a USL soccer stadium if they can get it. Have you noticed that like half of these items are about soccer these days? Of course, half of all sports teams in the U.S. will be pro soccer teams soon the way league expansion is going, so that’s about right.
  • Here’s a map of failed New York City Olympic projects and how they helped Mayor Michael Bloomberg ruin neighborhoods. Sorry, did I say “ruin”? I meant “improve,” of course. This is from Curbed, after all.

NY Times business section cheers urban stadium trend, doesn’t seem to know why

Posted on by

The New York Times has a weird affinity for big sweeping articles about the stadium industry that don’t quite justify their declarative headlines, and the latest one ran in Friday’s business section under the headline “Welcome to the Neighborhood: America’s Sports Stadiums Are Moving Downtown“:

Across the country, in more than a dozen cities, downtowns are being remade as developers abandon the suburbs to combine new sports arenas with mixed-used residential, retail and office space back in the city. The new projects are altering the financial formula for building stadiums and arenas by surrounding them not with mostly idle parking lots in suburban expanses, but with revenue-producing stores, offices and residences capable of servicing the public debt used to help build these venues.

There is a germ of truth in this: Yes, more stadiums and arenas are being built near city downtowns instead of out in the suburbs, the Atlanta Braves‘ new ballpark notwithstanding. That’s true of everything, though, not just sports — we’re in the middle of what’s been dubbed the Great Inversion, a decades-long process where people are increasing moving back to cities instead of out of them. (For “people,” here, read “people with money and options” — plenty of people continued to live in and especially immigrate to big cities even in the 1960s and ’70s.) So yes, there are lots of mixed-use urban developments being built around sports venues, but there are plenty built even with no stadium, or even when a stadium was planned and not built. “America’s Sports Stadium Builders Jumping on Urban Land Rush Bandwagon” might have been a fairer headline.

On top of that, the Times article tries to counterpose the traditional business model where “owners threatened to move their teams if governments did not build them new stadiums along with the roads and public utilities needed to operate them” against the new downtown development trend. But plenty of urban ballpark districts have gotten public funding after team owners threatened to move — hell, the Sacramento Kings arena that is the article’s centerpiece is getting $226 million in public subsidies that were approved only after the team owners threatened to move the team to Seattle.

There are plenty of good things about building sports venues near urban centers: They’re easier to get to by public transit, they support more economic development in cities (such that they support much of any at all), and in general they promote the idea that cities are good places to live and work and go see high-priced entertainment. They also take up valuable land that could better be used on buildings that aren’t dark a couple hundred days a year, displace residents and businesses, and by promoting the idea that cities are good places to live and work and go see high-priced entertainment, spark gentrification and force out the city residents who are supposed to benefit from all this alleged economic development in the first place. The urban-stadiums trend is not a simple good, in other words — and it certainly has nothing to do with any shift away from public stadium subsidies, even if some urban stadium developers are using ancillary land grabs to help pay for their construction costs.

If you want one paragraph that neatly sums up the Times’s perspective, this quote from Kansas City city manager Troy Schulte on that city’s publicly funded downtown Sprint Center should do the trick:

M. Schulte acknowledges that although tax revenue from the district is steadily increasing, it is not clear that enough will be generated to cover the debt service. “But from the perspective of economic development and economic resurgence,” he said, “it’s the best $300 million we’ve ever spent.”

Urban sports venues: They don’t pay off for cities, but they’re still great! Your paper of record, people.

Friday roundup: Atlanta Falcons’ non-retracting retractable roof now can’t even keep rain out

Posted on by

Crazed billionaires are shutting down our nation’s news media when employees try to assert their rights, so let’s enjoy journalism while we still have it with another week in news briefs:

  • The Saskatchewan Roughriders‘ old stadium got blowed up real good.
  • The developers who want to build a $15 million modular stadium for the NASL team San Diego 1904 F.C. haven’t actually filed a development plan yet with the city of Oceanside.
  • The Atlanta Falcons‘ non-retracting retractable roof has already sprung a leak.
  • Asked by the New York Post about the New York Islanders‘ bid to build a new arena on state land near Belmont Park, team owner Jonathan Ledecky replied, ““I think we’re circling the airport, just waiting to be given a landing clue,” which doesn’t actually mean anything at all that I can tell, but it sure is an evocative image. Then he pointed to the team’s new $7 million practice facility on Long Island, with a “world-class chef” for players, as “emblematic of what we can do if we were granted the right [to build] at Belmont.”
  • Sacramento city officials want to use the Kings‘ old arena, now vacant after Sacramento built the team a new arena, as a temporary convention center while the city conducts a $125 million renovation of its regular convention center. The arena is an arena, not a convention center, and it’s still owned by the Kings owners, not the city, and I’m sure this is all going to go just swimmingly, no need to be concerned at all.

Sacramento Kings arena to offer “rich door” for nearby condo owners

Posted on by

Sports venues with separate entrances for luxury-seat holders are old news by now, but sports venues with separate entrances for condo owners across the street from the building, like the Sacramento Kings are about to have — that’s a new wrinkle:

“I don’t want to sound snobby—you could go and stand outside, but why would you when you have the opportunity to go through a VIP tunnel?” asked Christopher Miller, vice president of The Agency Development Group, the broker handling sales for the building. “You’re not going to wait in line, you’re going to walk right in. It’s a level of exclusivity that you and your family are going to enjoy.”

The tunnel, which runs from the residents’ parking garage to the stadium’s VIP lounge, will be accessible to all residents and their guests. Ownership of any condominium at The Residences at The Sawyer, Miller said, comes with access to the VIP lounges and seating for Kings home games. (Concerts, which are generally run by a promoter that rents the arena, are a different story.)

(Nice touch, developer guy, for prefacing your pitch to give condo buyers a special tunnel to go to sporting events without having to rub elbows with the masses with “I don’t want to sound snobby.”)

The Bloomberg article on this is awfully vague, so it’s not clear whether condo owners are actually getting free admission to Kings games, or just the ability to buy tickets for Kings games and go there through your own private passageway. (If the former, presumably the developer is paying the Kings for the tickets.) Either way, this doesn’t seem like the best sales pitch, honestly — how many people are really going to pay enough extra for this to make it worth more than you’d get from just selling those tickets to the general public — but hey, knock yourselves out, developers. Unless any city of Sacramento money went to provide this tunnel access, in which case, ew.

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

Posted on by

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!

Sacramento paper says Kings arena won’t cost much in taxes, ignores tens of millions in taxes

Posted on by

Want to read a long, involved article about sports arena finance that tries to clarify things but is only likely to make readers much, much more confused? Dale Kasler and Tony Bizjak of the Sacramento Bee have you covered:

Welcome to Golden 1 Center. That’ll be $18.3 million, please.

That’s how much the city of Sacramento will pay each year to help fund the Kings’ new $556 million downtown arena, set to open Oct. 4.

So far, so good. The original projection was $21.9 million a year, but the city got a 5.67% interest rate instead of an even more extortionate 6.7%, so phew.

The Kings will pay an estimated two-thirds of the debt service through lease payments and property taxes generated by the new arena.

Errrr? The Kings’ lease payments start at $6.5 million a year, and do eventually escalate to $16.7 million by by the end of the lease. but while that may average almost two-thirds of the costs (57%, according to the Bee), it’s heavily skewed toward the distant future, and as anyone who’s taken out a loan (or, you know, handled money) should know, cash flow is way more valuable now than it is 30 years from now. (If you disagree, please lend me $10,000, and I will repay 100% of your costs with a $10,000 check in the year 2046.) So in present value terms, which is how one should be calculating this, it’s a whole lot less than two-thirds.

As for “property taxes” paying for the bonds, I have no idea where that’s coming from. Here’s the actual bond payment schedule, from the city council’s official plan:

screen-shot-2016-09-19-at-7-30-51-am

I guess if you count the increased property taxes coming from the arena as a team “contribution,” then maybe that offsets some more of this. (The Bee counts them at $25 million, but doesn’t indicate if that’s present value or what.) But getting to use your property tax money to fund your construction costs is a rather special subsidy not available to normal humans, so shouldn’t be counted as something that is somehow reimbursing taxpayers for their costs.

Increased parking revenue only has to support about 10 percent of the debt, according to the city’s latest cash flow projections. About twice as much money will come from dollars that will get freed up when existing debt on city parking garages comes off the books several years from now.

What? Taking parking-garage debt payment money that otherwise would have returned to the general fund when the garages were paid off and instead funneling it to pay for the arena isn’t free money — it’s, well, money that otherwise would have been returned to the general fund. It’s good that it won’t have to come from parking meter fees, sure, but it’s still the public paying for it.

What this all adds up to is less “this won’t cost the public much” and more “don’t worry, the amount of public money we projected to pay off the arena will be enough to cover the bills.” Which, to be fair, is what Kasler and Bizjak say in the article, if you read carefully enough. (“City officials say Sacramento can handle the debt with room to spare, and without dipping into its general fund.”) Unfortunately, whoever wrote the Bee’s headline did not read carefully enough, and came up with this:

New Sacramento arena relies on city parking fees – plus lots of cash from Kings

And that, kiddies, is how journalism becomes spin.

Sacramento prepares to pay for new Kings arena with deluge of downtown parking fees

Posted on by

The new Sacramento Kings arena is set to open next month, at a cost of $556.6 million, $255 million of which will come from city coffers. And that also means the extension of parking-meter hours on downtown streets from 6 pm to 10 pm to raise money to pay for the public’s share. The Sacramento Bee has a good long article on how everyone is preparing for this (confusion, mostly), but I’d like to call out just one sentence of it:

Restaurant workers who now park on the street likely will have to adapt.

There are other considerations here for possible negative fallout — like, will some people start steering clear of downtown restaurants once they realize they have to pay for parking — and the city is offering discounted parking in downtown garages for some workers. Still, if you want one epitaph for the publicly funded sports venue era, you could do worse than “workers will have to adapt.”