Field of Schemes
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August 03, 2006

Kings arena vote(s) set

After a day-long closed-door hearing to finalize details of the "term sheet," the Sacramento County Board of Supervisors last night approved sending a 0.25% sales-tax hike and $470 million (or so) Kings arena to voters in November. (It will be two separate votes to evade the law requiring a two-thirds majority vote on project-specific sales-tax hikes.)

If approved, the deal would be among the most lucrative subsidy packages in the NBA: As noted here previously, the Kings would put up the equivalent of about $61 million of the arena costs, while reaping 100% of naming rights fees, proceeds from both basketball and non-basketball events, parking, and concessions. I've also heard second-hand reports that the Kings would have a say in what kinds of businesses located nearby the arena - if any readers can confirm or deny this, please let me know.

LATE NOTE: A reader confirmed it. The relevant clause in the agreement: "City of Sacramento and MSE will work in tandem to arrive at a mutually acceptable list of non-compatible or competitive uses within close proximity to the sports and entertainment facility." (Full set of arena documents downloadable here.

COMMENTS

Dan Weintraub has another excellent article today in which he compares Sacramento's deal with San Antonio's, Indiana's and Utah's. He concludes that Sacramento's deal is pretty much the sweetest deal any owner in a comparable city has ever had.

I reluctantly understand that to attract businesses to cities that you sometimes have to give tax breaks, and so forth, but there's really no need to give away the store, as Sacramento proposes to do here. And even at that, the party that "owns" the lion's share of the events at the arena should pay the lion's share of the rent, too.

Sacramento's deal proposes that, in effect, we build an arena and then pay the main tennant. When you add up everything, this is a gift all the way.

Weintraub's article today is very, very good. Take a look at sacbee's website.

Posted by MikeM on August 8, 2006 01:50 PM

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