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May 24, 2011

K.C. Star writer to Sacramento: Sprint Center cost nothing! Really!

On Sunday, the Sacramento Bee ran a front-page (of the E section, anyway, whichever one that was) opinion piece by Barbara Shelly, a columnist for its fellow McClatchy-owner paper the Kansas City Star, on what Sacramento's Kings arena push can learn from Kansas City's own arena battles. And Shelly's conclusions went a little something like this:

Since opening in 2007, the Sprint Center has shattered the expectations of even the most ardent believers. Pollstar magazine rated it the fifth-busiest arena in the nation and 12th-busiest in the world in its latest rankings. It turns a profit for its operators and the city, even though a pro sports franchise has not yet materialized.
In a coup that silenced all but the most hard core of the naysayers, Kansas City built a $276 million arena without raising taxes for residents or assuming any risk for operating losses. Its story involves a great deal of luck, but it could point to a way forward for Sacramento and other cities.

Only one problem with that description: It bears no resemblance to reality. As both I and my own corporate colleagues at The Pitch explained two years ago, the Sprint Center turns an operating profit for Kansas City — but that's only if you don't count the city's annual $13.8 million in construction bond payments. And that money is all coming from hotel and car-rental taxes — which only counts as "not raising taxes for residents" if you think that people only ever rent cars while on vacation. (And even if you do think that, there's still an opportunity cost to devoting car and hotel taxes to an arena: It means you can't raise them to pay for something else, meaning other taxes — the kind that are indisputably paid by residents — have to be higher than otherwise as a result.)

Even with my lowered expectations for standards of professional journalism since journalism effectively stopped being a viable profession, I find it pretty astounding that this stuff could end up in a major newspaper without anyone bothering to do a quick fact-check, or even a reality check. I was hoping that The Pitch might have caught wind of it and taken the Bee to task, but they're kind of busy right now with a wind of their own, so it's probably understandable that they haven't.


Also a problem: Pollstar rankings mean almost nothing. They rank concerts only. If you look at Pollstar's list, most of the so-called busiest arenas are actually just those without anchor sports tenants. Sporting events don't count in Pollstar's rankings.

Posted by Ben Miller on May 24, 2011 12:40 PM

The cost of the Sacramento arena has (ostensibly) been revealed: $370M.

I think this is truly horrible news, because there will be hidden costs, for sure. I'll be shocked if this doesn't include a land-swap for the current arena (even though Sacramento already owns Power Balance Pavilion) and forgiveness on the current bonds.

We're getting set up.

Not enough details yet, but you know they'll be leaked before the meeting on Thursday.

Posted by MikeM on May 24, 2011 04:51 PM

MikeM, thanks for the KCRA link.

The head of the local tourist office said that other funding sources need to be looked at. That means hotel and rental car taxes won't be enough. Does this mean sales taxes or they will use TIFs?

They maybe trying to hide the ball but it won't work. Sacramento is a government town with seasoned bureaucrats and politicos that will have no problem peeling this onion to see what's inside.

Posted by JJO916 on May 24, 2011 09:16 PM

The plan they have, costing $370M, is nuts. It is lower than expected, however, the plan does not include a parking structure. Why no parking structure? Because there are 8000 parking spaces within a half mile of the proposed complex. That logic, that the parking already exists, is foolish. If they build the arena, it needs to be built correctly.

Posted by Mark Wine on May 26, 2011 07:18 PM

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