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September 26, 2011
AEG sniffing around Sacramento Kings arena deal
Take this with a grain of salt, but: AEG, the entertainment giant that is trying to build an NFL stadium in downtown Los Angeles, is reportedly "interested" in being part of a Sacramento Kings arena project.
"We have made the mayor aware that ... any assistance he would like to ask us for, we would be interested," AEG spokesperson Michael Roth said on Friday. (Oddly, none of the news outlets reporting this indicate what Roth said in the ellipsis. I'm willing to make my own guess, though.)
This is likely just tire-kicking: "Sure, if you figure out a way to build an arena, we'd love to manage it. We still get to pay ourselves guaranteed profits before the city sees a dime for repaying its debt, right?" Still, the announcement provides a smidgen of momentum for the arena plans, which is a smidgen more than they had yesterday.
In related news, meanwhile, the Sacramento city council is set to vote tomorrow on a city plan to spend $555,000 to hire a consultant to analyze its arena proposals and negotiate with the Kings. That price tag is about par for the course, and isn't a terrible idea — as noted here previously, one reason cities often get stuck with terrible leases is because they don't have experts on their side — but it all depends on what they're buying. The biggest contract would go to Barrett Sports Group, which has a long record of working for both government and team clients, which is promising; their website also prominently features a quote from NFL commissioner Roger Goodell on their expertise in "finding solutions to the always-complex challenge of developing stadium facilities," which is less so, given that you want an arena evaluator to tell you whether to build a new building, not just how to do so.
Personally, after seeing the deal that AEG put together in Kansas City, I don't trust them as far as I can throw them. But that's just me, I guess.
I'm trying to see how they can do that, though. KC relied on tax hikes to cover construction bond debt service, and in Sac, they're trying to avoid raising taxes. It seems to me that the only way they can do that would be to claim other revenue streams for their own. Sort of like this...
Like you, I really don't mind them spending money to get arena consultants. It's just that if the 1/3-1/3-1/3 claims are correct, the City shouldn't be paying more than 1/3 of these costs, and $555,000 seems pretty high. But Dan Barrett has, for the most part, been on the level so far. When I watched the council meeting on TV, he really did seem pretty skeptical that putting together a deal to lease our parking operations can be done in under a year.
The ones I don't trust are KJ and Rob Fong. They've trusted every single figure Think Big has thrown out there, such as $7B and 4,100 jobs. They both need to work on their analytical skills.
The City of Sacramento has at least a $40M deficit and can't afford to spend $555,000 on arena consultants, and to do exactly what? I thought the Think Big committee was supposed to come up with the financing answers in conjunction with Dan Barrett, and look what we got, a big nothing burger that cost $110,000. Where's the beef? So, what are these new consultants going to come up with, Burkle again? He's not gonna save this debacle nor is anyone else. I think this is part of Team KJ's end game. Let's start spending some real money to give the impression we are making progress. Once we've done so then argue we must go forward, regardless of taxpayer impacts, because to do otherwise would be a waste of taxpayer money. This is one of the most shameful manipulation games I've ever seen. All smoke and mirrors with little financial substance.
If these funds are allocated to a plan that has no viable funding mechanism in place it will be time to recall all council members who voted for it.
I don't think Mayor KJ wants a consultant to tell him whether to build a building. He just wants to know how. As a former player, he doesn't want to be the Mayor that loses the Kings.
Council voted 7-2 to proceed exclusively with Taylor-ICON and to spend the $555,000 on consultants.