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January 03, 2011
Sacramento developers throw more Kings arena plans at the wall
Four of the developers whose Sacramento Kings arena plans were rejected in the last set of talks are back for another round, submitting arena plans by last Thursday's deadline. Though in some cases, "plans" might be pushing it:
- Gerry Kamilos, whose three-way land swap plan was rejected by Cal Expo in September, is back with a new iteration of the same plan: This time, Cal Expo would stay put, but hand over 125 acres of its land to Kamilos for redevelopment, in exchange for getting help rebuilding on a smaller site. Kamilos would then package the profits from that land, plus development on the current Arco Arena site, to come up with $350 million to build a Kings arena on downtown railyard land.
- A team led by ICON and developer David Taylor team would "focus on identifying strategies to finance an integrated arena and regional transit center in the railyards" and present a "conceptual approach" by April, according to the Sacramento Press. In other words, they don't really have a plan, but they'll be writing more in a week or two.
- The "CORE" team is now considering either the Westfield Downtown Plaza or the railyards as sites, but according to developer Ali Mackani (in the Press' words), "more information must still be gathered to create a workable financing plan under a public/private partnership."
- Natomas ESC Partners has probably the most worked-out plan, which should be no surprise, since it just resubmitted its same proposal that was rejected last time around. This would build an arena on city-owned land just north of Arco Arena, with construction costs coming from $10 million in annual rent from the Kings, a share of game-day ticket revenues, naming rights, parking fees, and other money that the Kings owners are presumably counting on themselves as the whole reason they want a new arena.
Sacramento Mayor Kevin Johnson summed up the proposals: "At the end of the day, to develop a project of this nature in these difficult economic times is a challenging endeavor, but the teams who have submitted bids certainly reflect a seriousness of purpose." In other words, A for effort. But still no one has found a solution to the problem of how to generate money out of thin air.
It just seems to me that the City won't go with Plan 1, because the last time they tried a land-swap, that went badly; moreover, they won't go with plans 2 and 3, because the funding sources are very nebulous, at best. That leaves plan 4, which the Maloofs will reject.
Honestly, I think we're down to zero plans. The City will almost certainly lean towards plan 2 or 3, but that won't work because of the nebulous nature of the financing. Plan 4 would be cheapest, but the Maloofs are 100% certain to reject it.
This is just looking bad now. Or good, depending on your POV.
Meanwhile, the Nevada legislature seems just about certain to build a new arena in Vegas.
I'm not saying this is connected. I'm just implying that it is.
Posted by MikeM on January 3, 2011 04:03 PM
Oof. The City had a public hearing yesterday to review the 4 plans, and it dissolved into a public argument. In short, none of the 4 plans look good.
That's the first bad news.
www.sacbee.com/2011/01/07/3306088/sacramento-arena-task-force-meeting.html
The second: The Maloofs are losing control of the Palms.
www.bloomberg.com/news/2011-01-06/leonard-green-tpg-said-in-talks-to-take-controlling-stake-in-palms-casino.html
I just have to think, "Oh. So this is what the end-game looks like." It's never like what you'd imagine it would be.
Posted by MikeM on January 7, 2011 01:11 PM
The interesting thing is what happens if Sacto decides to build at the Natomas site. As Mike said, the Maloofs want a downtown arena, so they'll be displeased. The question is whether the NBA would approve a move if a new Natomas arena was locked in. I'm sure that the NBA wants a downtown arena, too, but it'd look bad to have a new arena go up and then still let the team leave.
Posted by Ben Miller on May 25, 2011 06:45 PM