If you thought nothing could match the craziness of this spring’s Sacramento Kings saga … well, you’d be right, but the craziness of the current battle over putting a referendum on the ballot over the Kings arena plan is certainly doing its best. Drama! Intrigue! Allegations of fabricated quotes!
- The arena supporters group Downtownarena.org (backed by Kings fans, construction unions, and developers) has released video of a petition signature gatherer mistakenly saying that the arena plan would raise taxes. (Which it wouldn’t directly, though obviously nobody knows what will happen if Sacramento ends up with a shortfall of revenues.) They charge that this is fraud, though it’s only “intentional” false statements that are against California law, which is going to be tough to prove.
- An unsigned flyer posted around Sacramento warns that if you sign the petition, “You will never know how many people have access to your signature and your home address.” Which is true, but only insofar as for any petition you sign, or really any piece of paper where you put down your signature and home address. (And at least in California, unlike other states, petitions aren’t public records.)
- DowntownArena.org paid to have 56,000 robocalls made Sunday night (hear one here!) accusing “out of town special interests” of lying to voters and claiming an arena would create 4,000 jobs and $100 million in new revenue.
- A political consultant for the pro-referendum group uncovered a draft press release by the pro-arena side that cited a quote by “CITIZEN TO BE NAMED,” which he asserted shows the quote was made up and then later assigned to an actual person.
All this, and the referendum wouldn’t even go on the ballot until next June. Ten months of fun still to be had!
We haven’t seen the financing plan yet, but the term sheet envisions capitalizing parking revenues. Under the city charter, parking charges are defined as fees dedicated to parking maintenance, collection, enforcement, and traffic circulation. Under statewide initiatives pushed through by the defenders of California’s famous Prop 13, increasing city fees in excess of the cost of providing the service is defined as a tax increase, which requires voter approval. To the extent that getting sufficient funds out of the parking capitalization requires raising parking fees, you can be sure that Prop 13’s defenders will take notice. The Howard Jarvis Taxpayers Association, which got voters to pass those statewide measures on fees, has aggressively and usually successfully attacked fee increases that are disguised taxes, as the Sacramento arena parking deal looks to be. And it’s not likely this will escape HJTA’s notice. Its headquarters are in downtown Sacramento and its employees park in city-owned parking.
I really think Sacramento’s term sheets have huge issues that will make them very difficult to turn into an enforceable contract. One of those that isn’t mentioned much is this: The Kings are under no obligation to pay off the current bonds if the City builds a competing facility within City limits. And yet, they still think they can write legal language that forces the Kings to re-collateralize that loan AFTER the new arena gets built.
It strikes me this would require a contract written in 1997 to be revised, and I have no idea how you do that. In a nutshell, that debt absolutely must be re-collateralized before the first wrecking ball swings. If it isn’t, I think City taxpayers will be on the hook for those payments, because the City will have lost all leverage.
The challenge is putting all this into the new contract, and once the new building is up, I don’t see a way to do it.
The other issue too is, of course, parking. State law prohibits meter revenues from going towards anything but parking and traffic expenses. I don’t think they can use those funds to repay bonds that were sold to fund arena construction.
That takes parking meters off the table; that means they won’t be able to sell $212M in bonds at a reasonable interest rate.
Turner Construction has been selected as the builder, by the way.
I think KJ is aware of all these problems, and is willing to risk it. He knows there’s rough sailing; he just wants this to get to the point of no-return, so even opponents look at the sunk costs and concede there’s no other path than forward.
https://twitter.com/Ryan_Lillis/statuses/360127288861396992
If the Howard Jarvis Taxpayers Association or anyone else would like to join our campaign for a vote on the arena, like us on Facebook at https://www.facebook.com/ArenaVOTE
“Citizen to be named” was a crazy idea to build suspense for when the citizen was revealed. Kind of like The Decision, here we stay redux.
The Sacramento franchise is the greatest in all of sports. I’m always right and you are wrong, I told you so.
Grunt Napear