Some said it would never happen. We have bobbed and weaved around building a new sports and entertainment complex for more than a decade.
But slowly, slowly, all parties — the city, the county, the Kings’ owners, the National Basketball Association, the project’s developers and proposed arena operator Anschutz Entertainment Group — nudged their way to an agreement to build an arena where we need it most, in the downtown railyards.
The result is a plan better than any that preceded. Development costs of $391 million would be split 65/35 between the city, which would own the complex, and the Kings and AEG. The city would fund most of its share with revenue from three downtown parking lots offered up by the county. The Kings would act as anchor tenant, taking on a 30-year lease, and AEG would run the facility, collect proceeds and share a portion of its profits with the city.
It is just a plan, however, and a complicated one at that. The nonbinding terms sheet approved by the city council last month is only the first step in a process that needs to move quickly if all parties are to meet the goal of opening the facility for the 2015-2016 NBA season.
The pressure to move quickly must be balanced with prudence. Should Sacramento lease its downtown garages to a private operator in return for upfront cash or create a financing authority to borrow against future parking revenues? What are the details of the next set of agreements between the Kings and AEG or AEG and the development team? And how will they affect the city? How can the entertainment complex be designed to enhance other elements of the railyard development?
These are all legitimate questions focused on legitimate concerns. Public officials need to monitor the process and be certain the city and its finances are protected and that the public benefits from the deal as much as its private partners do.
At the same time, we also need to recognize this as an immense opportunity, one that we simply cannot afford to squander as we struggle to emerge from a recession that continues to dog our region.
A new downtown entertainment complex is not a cure-all, but it can be one more factor in our effort to fashion a new regional economy able to compete nationally and even globally. A major entertainment complex within the railyard development — with its proposed shops, restaurants, homes and hotels — puts us in the ranks of cities like Indianapolis that have remade themselves into vibrant places where people want to live and where companies want to invest.
It would offer a venue to attract first-rate entertainers who avoid the aging Power Balance Pavillion, large convention groups who want amenities within walking distance, and athletic competitions that prefer newer, better-equipped facilities. New convention business alone is estimated to total at least $500 million over 30 years, according to the Sacramento Convention and Visitors Bureau.
Yes, our public officials need to act prudently to minimize risk. But, frankly, I believe far greater risk lies in inaction — the inaction that has for too many years left downtown Sacramento blighted by empty stores and an empty railyard.
The biggest question from me is simple: If we don’t invest in our own region, why should anyone else?
Please contact me with your questions or comments.
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