Now that the disputed Sacramento Kings arena referendum petitions that were gathered by signature gatherers who were paid with money wannabe Seattle arena builder Chris Hansen are being submitted anyway, you might think that Sacramento is finally over this whole referendum-signature-controversy mess. But no, because apparently whoever is scripting this show has decided to throw in one more incomprehensible plot twist:
With support from nonunion contractors who have been locked out of the project, a new Sacramento citizens’ group was formed today to fight the proposed $258 million taxpayer subsidy for the new Kings arena downtown.
The new group, Voters for a Fair Arena Deal, will gather signatures for a ballot initiative launched months ago by another group opposed to the arena subsidy. But Voters for a Fair Arena Deal took pains to separate itself from the original effort and said it will “limit communications” between itself and the first group, Sacramento Taxpayers Opposed to Pork.
That’s right, the Kings arena has pulled off the rare feat of being opposed by a group of construction companies. But they’re construction companies that aren’t going to get a cut of the swag, so they’re all mad and stuff.
The new group was actually announced by Craig Powell, head of the watchdog group Eye on Sacramento, which you’ll recall from its excellent report on why the arena deal was a hot mess. Joining with a nonunion labor group seems a bit of a case of odd bedfellows — Powell said yesterday that “we are not opposed to a public subsidy for an arena, [but] what we are in favor of is an arena subsidy we can afford,” then declined to give specifics, other than that the group would push for eliminating the “project labor agreement” that gives preference to union contractors, because duh.
Meanwhile, Kings president Chris Granger announced that the proposed arena would have its seating capacity scaled down from a planned 18,500 to 17,500 or even less, possibly making it even smaller than the Kings’ current arena, which holds 17,317 and has been derided by the team as too small. But no worries, as according to the Sacramento Bee, the Kings have dispensed with the old notion that fans watching the game actually have to be at the game:
the $448 million Downtown Plaza facility may have far fewer seats than originally proposed, possibly fewer than at old Sleep Train Arena, but could pack more patrons in, nonetheless, by offering special standing-room-only ticket sections and a dramatic outdoor plaza seating area…
The Kings are talking about offering a number of standing-room-only tickets for fans to watch the game in open areas behind the arena’s lower seating bowl or on what officials say would be a dramatic “bridgeway” over one end of the arena, offering bar seating, couches, and a railing overlooking the event floor.
At one end of the arena, the Kings say they envision a glass wall that slides open onto a plaza at Sixth and K streets, making the arena an indoor-outdoor facility. Ticket buyers for some events, such as concerts, would be able to sit in the plaza with a view of the stage through the open glass wall, as well as via video screens in the plaza. The outdoor area could boost arena capacity by thousands for some events, Kings officials said.
Hey, here’s an idea: How about selling tickets to watch events on padded seats, in private suites among the company of your selected guests, via state-of-the-art high-definition video technology? We could call it tele-vision.
This fad of fewer traditional bowl seats with more standing areas & lounges is a bad idea.
One stroke of genius during the Camden Parks-led ballpark explosion was reducing seating capacity. It gave the ballpark better energy because if it feels like a full building then the fans and players up their game. If there are gigantic standing areas and lounges that are packed when the Lakers come to town but barren when the Cavs play, then the players and fans will notice. And since standing all game is uncomfortable, a large percentage of games will see those areas stay relatively empty, thus harming the building’s energy during games.
The real reason the arena will be smaller: They realized they weren’t going to build what they wanted for $448M or less.
They won’t hit the 2016 date, either. Three years from now, and they’re still in design, still trying to buy a key piece of property, and haven’t even given a thought to demolition yet? This is on a site in California, by the way. The EIR will come back in June of 2014, which will give them just around 2 years. I have my doubts.
I’m pretty royally pissed about this one.
On the labor deal, it turns out that around 15% of construction workers in this area are in a union. That’s why I think this new group has a lot of power; they represent a lot of workers who would be shut out of any work at the arena construction site.
Great time for the Bee to shut off its commenting system, eh?
Whatever “innovative” ideas come out of this process won’t hide the most significant likely outcome: Sacramento has too few corporations to buy expensive, club-style season tickets year in and year out, in good years and bad. Talk of people buying season tickets in a 2.5-4 hour drive radius is doubtful to appear.
This means that Sacramento, in addition to having fewer seats to sell, will likely have to either discount seats to sell more or satisfy itself with poor crowds in poor years. Comparing a Sacramento arena to the Brooklyn one on size reflects a complete misunderstanding of what drives team ticket revenues these days–and it isn’t a guy watching a game in a plaza due to “buzz.”
Maybe they can make it up at the Craft Beer Bar:
http://www.sacbee.com/2013/10/16/5827320/california-craft-beers-now-available.html
(I get 24 packs of Sierra Nevada from Costco for about the price of 3 bottles of the stuff in an arena. Like Neil said: “Tele-vision.”)
You know, though… If there are people out there who are that stupid, why would you NOT take advantage of them?
Another thought. The city will only own the building. The dirt underneath, sans gold nuggets extracted long ago, will be owned by the private developers. Sooo, once the building becomes obsolete (15-18 years?), guess what…the City still owes debt paymts some 15+ years out, and gets another wave of criticism from the NBA poobahs for having an inferior gym. Refinance and build another ‘state-of-the-art building? Can’t be done….too much existing debt…so off to Seattle go the Kings. But, deep down, pro basketball will become a yawner because the 10-ft basket is too low and all shots are now dunks, with shooting skills withered to insignificance. Some time in not distant future, the rim needs to be raised….11-ft anyone?
BurkettN: The arena term sheet prohibits the Kings from moving for 35 years, so I’m not all that worried about your scenario.
The language in question: “The Kings shall not relocate from the City, shall not apply to the NBA to transfer to another location outside of the City, shall not enter into or participate in any negotiations or discussions with, or apply for, or seek approval from, third parties with respect to any agreement, legislation, or financing that contemplates or would be reasonably likely to result in, any breach of the non-relocation agreement, and shall have no right to terminate the non- relocation agreement during the term of the lease agreement, in each case except as provided in the definitive non-relocation agreement.”
Assuming the actual lease reflects that, it’s a pretty solid non-relocation clause.
I thought the whole point of standing areas was to make people tired and uncomfortable so they go back and sit in the lounges drinking even more overpriced beers and watching on tv… hopefully without ever realizing they could have stood up, sat down, drank beer and eaten at home for way, way less money.
A smaller arena could actually work for a second tier market like Sacramento (sorry Sacto residents, but it is the truth). Fewer club seats to sell, a relatively low number of high end corporate suites along with more loges and “game day rentable” suites for mere mortals… and if we weren’t talking about pro sports, we’d mention the mortgage on the building that the team must pay… but that’s just crazy talk…
The Kings wouldn’t be the first franchise to discover that they can sell easier (and perhaps make more money) with a 14,000 seat arena (for example) than they could with 18-20k.
Great job quoting the terms sheets, Neil.
Now, look on page 18 of the terms sheets:
http://sacramento.granicus.com/MetaViewer.php?view_id=22&clip_id=3233&meta_id=396799
“Basketball Capacity (Minimum)18,500”
I think the City needs to stand up for themselves on this one. I really do. They’re getting set up for a call for a new arena about 12 years after this one opens. “This one is just too small!”
MikeM, the title (on physical page 35 of that document) say EXHIBIT 2 PRELIMINARY PROGRAM DESCRIPTION and doesn’t have outdoor seating as a listed item. I guess it’s still considered an “in flux” part of the terms sheet.
In the era of “small is the new big” when it comes to arenas, the response will be “so just how many seats more than the Barclay’s Center in Brooklyn do you think we need”?
Neil, in your response to BurkettN, you mention the 35 year lease… And I hope you were being sarcastic. Every lease has out-clauses; I wouldn’t sign one that doesn’t.
Just ask Indianapolis about this one.
In this particular deal in Sacramento, remember that the NBA included a clause that would allow a sale to other parties if the arena doesn’t open by 2017. This is yet another foolish clause the City accepted, and you can kind of see how this adds up: We’ll eventually have a choice of either 18,500 seats (specified in the term sheets) OR $447M (also specified in the term sheets). We can’t have both of these AND meet the 2017 deadline specified by the NBA. The City is giving up its leverage.
If the lease looks like the term sheet, the non-relocation clause is going to be a million times stronger than anything Indianapolis ever had. That’s a decent-sized “if,” though.
It is a descent-sized “if”, because they’ve already given up on the 18,500 seats minimum capacity. What else are they going to give away?
“…the City still owes debt paymts some 15+ years out, and gets another wave of criticism from the NBA poobahs for having an inferior gym. Refinance and build another ‘state-of-the-art building? Can’t be done….too much existing debt…so off to Seattle go the Kings.”
Sounds right, except make that the Mumbai Kings.
@John Bladen
I agree with getting rid of the standing room only area. It’s a waste of space and the lack of revenue created just hurts Vivek’s wallet. When that happens, the product on the floor suffers because he’s going to be looking to save money by not paying players.
This arena needs to be done with the bells and whistles that it’s seeking. If the open area outside the arena is going to shrink the capacity on the arena then get rid of the open area. LA and OKC do just fine with spectators watching the outdoor screen from “star plaza” in LA and “thunder alley” in OKC. Stick with the 18,500 and eliminate unnecessary glass openings, wasted space and techie stuff.
OTOH, A well run Kings organization can get 18,500 a night. I don’t see how they could make more money on a 14,000 seat arena. Besides, the league would never allow it. Even if they did, whatever Vivek saves by building a smaller arena would wound up being lost by the 2,000 to 4,500 tickets a night that he would be losing.
If they want an “intimate” feel to the arena then they need to keep it to just one tier of luxury suites. That’s the real benefit of a small market like Sacramento. You can still keep the fans relatively close to the action as opposed to what you have in big market LA where the fans are on top of 3 tiers of suites.
@Burkett
I wouldn’t worry about the building becoming obsolete. Other NBA arenas have been around for over 20 years and still have 20-30 years if not more left in them. The problem with the current building is that it lacks the basics. Eliminate the bells and whistles and stick with what’s needed for the 35 years plus long term. That would mean..
-Larger loading docks for the many other events that come to the building.
-Better sound system.
-Stronger roof.
-Double the luxury suites but still in one tier.
-Elevators and escalators.
-Club seating.
-Matrix board capability. This is huge when you consider the many ways that someone like Vivek can tap into extra revenue.
-Permanent ice floor that can convert from ice to basketball in 4 hours or less as opposed to the 2 days that is currently needed.
Concentrate on the above, keep it at 18,500 and do away with the bells and whistles and you can fit it within the budget.