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Thursday, May 17, 2012
Department: March 2007
Queue and R
Matt Mahood on David Stern, Arco, and suitors lining up on the Kings’ doorstep
Story by Rich Ehisen
Sacramento Metropolitan Chamber of Commerce CEO Matt Mahood has long been one of the region’s most vocal and visible supporters of building a new sports and entertainment facility in the now-abandoned Union Pacific railyard on the city’s northern edge near Old Sacramento.
But voters soundly rejected last fall’s proposal to hike the county’s sales tax in order to pay for that complex, leaving many people to wonder what happens next. We sat down recently with Mahood to talk about the ongoing efforts to build a new arena and redevelop the downtown railyard.
Comstock’s: Sacramento clearly loves the Kings and wants them to stay, but voters last November made it clear they do not want to foot the bill for a new stadium. So where do we go from here?
Mahood: What was evident is that voters were not willing to support any type of sales tax increase that wasn’t clearly defined and articulated in regard to how much, when, where and why. The Maloofs only complicated matters. That said, I don’t think anybody now is in a rush to take another run at a tax increase to fund new sports entertainment facilities. So where do we go from here?
First, you have to remember that we had over 1,000 supporters for Measures Q and R, and that we raised over a half a million dollars within the general business community without even having a deal on the table. Imagine how much money we could have raised if we had had a deal and if people felt like they really wanted to support Q and R.
I also think we have come forward to a point where now people think Arco does need to be replaced. Along the way I think we’ve articulated to people that the best location for a new arena is the downtown railyards. So our objective now is to keep that idea alive and to do outreach to the people who supported Q and R and engage them on our quest and try to shape the debate, if you will, along those lines.
Comstock’s: San Francisco’s AT&T Park was built with private money, and at least two more privately funded stadiums are in the works for the A’s and the 49ers in Fremont and Santa Clara. If Fremont can do it, why not go that route here?
Mahood: I’m sure you could come up with a model that would potentially work. But in reality, if these facilities made a lot of money, people would be building them all over the place. In truth, it may just be that the NBA and major-league franchises have been living off the back of the public for years by subsidizing their own operations with publicly financed facilities, and now we may be moving off that model.
You’re right — AT&T Park was unique in that the naming rights and a lot of the concessions and advertising are being used to pay off the debt of the facility. That is typically revenue the team gets to subsidize players’ salaries, so to some degree it hurts the Giants’ competitiveness when they’re out in the market trying to shop for players. That model may be feasible [in Sacramento], but I don’t know if it’s feasible with this ownership group.
Comstock’s: What happens if the Kings do eventually leave? Should the city make an all-out effort to get another professional sports franchise?
Mahood: After the failure of Q and R, I would imagine the Maloofs have received several very sweet offers from other cities. But I have also heard from the NBA that the league wants to be in Sacramento because this is essentially a one-horse town with one professional sport franchise, and they’d have a monopoly on the market, if you will.
If the Maloofs are given the ability to move the franchise, and I don’t think they will be given that permission until David Stern exhausts all of his resources and time in trying to solve the new sports entertainment facility, I do think we would ultimately be able to pull together a local ownership group.
But the challenge will still be that you can’t locate a new sports team here until you build a new sports entertainment facility. So not only will you have the problem of attracting a team, you will still have the problem of where they are going to play.
Comstock’s: What happens to the rail-yard if a new arena does not go in there?
Mahood: The railyard is going to be developed whether there’s a sports entertainment facility there or not. The city is still talking about a performing arts theater — maybe a movie theater or an amphitheater — as well as around 2 million square feet of new office space, another 2 million feet of new retail, and then ultimately maybe a new hotel and up to 10,000 new housing units.
The City Council is taking action right now to purchase the intermodal facility, the train station and the nine acres around it so they can potentially move the railroad tracks, get the freight trains running straight through, and move the station over enough to allow [railyard owner] Thomas Enterprises to build a walkway for Fifth Street, all of which will happen incrementally and in phases.
I think initially you’ll see the development of the intermodal probably at the same time you’ll see the state start rehabilitating the area. Assuming they can purchase the land or the old buildings from Thomas, they’ll start with the railroad museum, which really becomes the center of the railyard development.
Comstock’s: People in this area have noted for years that Sacramento lags in attracting a major corporate entity to put down roots here. Is Sacramento getting close to where something like that could become a reality?
Mahood: I would say our ability to do something like that has diminished. As we’ve matured as a region and our home prices have come up and there’s been more strain on our workforce, our ability to attract major employers to the Sacramento region has been complicated.
Trying to attract a major employer from out of the state into California to create a headquarters is very difficult because California is not the most business-friendly state. Most companies don’t want to locate in California unless they are forced to in order to gain access to the market.
Where I do think we have a competitive advantage is potentially in our connections with UC Davis as it relates to the research and technology that they may be spinning off. We also may have a competitive advantage as it relates to green energy or clean energy.
But where our best hope lies, quite honestly, in creating that headquartered company is really by growing our own and keeping it here in Sacramento. That is a five-, 10-, 15-, 20-year process, but that is truly where most economic development efforts are going now. Grow your own economy; don’t try to beg, borrow and steal somebody else’s jobs and put them in your community.
