Our friends James Ham and Rob McAllister of Cowbell Kingdom have a double dose of sourced entertainment and sports complex news. McAllister reported this week that the NBA is expected to bridge any feasible funding gap to get a plan for a new downtown facility approved; Ham reports that the city is looking for $80 million of that to come in the from of an up-front lease payment from the Kings and the NBA. The lease would be for 30 years, breaking it down to $2.67 million per year.
The other $50 million in private capital would come from AEG, the arena megalith that would operate the facility year-round. The city is hoping to receive City Council approval this month on a deal to lease the operation of downtown parking structures for $200 million in up-front payments -- the lease could be for 30-50 years. That leaves another $50 million. The hotel association has committed to some level of investment via a room fee, but not at that level, and not necessarily with advance capital.
1 recs | 112 comments
Just so I understand (because these financial things make my head spin)
The NBA fronts the $80 million and the Kings ownership pays 2.67 million per year over 30 years back to the NBA as tenants?
otis29 - February 8, 2012
That would be my understanding of it
kangsfan - February 8, 2012 via mobile
GIT ER DUN!!!
Robby1987 - February 8, 2012 via Android app
Is there someone who has followed this closer who can tell me how likely the NBA is do to this?
Is this good news? Bad news? A start to negotiations that end with a lower amount?
SPTSJUNKIE - February 8, 2012
They've been in contact throughout and I'm pretty sure this is why KJ is meeting
with Stern. Get him to sign the term sheet. I’m thinking it’s doable.
Kfan in Korea - February 8, 2012
Thank you.
SPTSJUNKIE - February 8, 2012
"Paging Mr. Wagon, paging Mr. Wallace Wagon"
otis29 - February 8, 2012
I'm reading fucker! :)
give me a few minutes
wallywagon11 - February 8, 2012
Quit wasting time on your fantasy basketball team, this is important!
otis29 - February 8, 2012
Lol
SPTSJUNKIE - February 8, 2012
Yeah!
(But only because his team is playing mine this week.)
TheJust - February 8, 2012
Yeah!
(Because I’m in 2nd place in the division he is in)
LightningStrike5 - February 8, 2012
(finally just realized how much fun it is to respond to stuff with Boogie pics)
wallywagon11 - February 8, 2012
ina_118 - February 8, 2012
wallywagon11 - February 8, 2012
I feel sorry for ASSN
He caught me in a week where my players all have had monster performances, Howard, Ellis, Parker, Harden, and Chandler have had just phenomenal games.
Aykis16 - February 8, 2012
did you see Lin tonight
holy crap
wallywagon11 - February 8, 2012
Palo Alto, born and raised
He might look good in purple one day.
RJinFairOaks - February 8, 2012
Also, you will note that he has gone 1-10 from three during this 3-game span
Which speaks to his ridiculous offensive efficiency inside the arc. He is shooting something close to 75% on 2 pointers.
RJinFairOaks - February 8, 2012
Because they're almost all layups or dunks.
Aykis16 - February 8, 2012
That could almost be taken as sarcasm, except that we are Kings fans.
RJinFairOaks - February 8, 2012
Lin is probably going to score 70 on us when we play the Knicks next week.
Aykis16 - February 8, 2012
As long as we hold the Knicks under 95, that's fine with me.
RJinFairOaks - February 8, 2012
Lin is probably going to score 70 on us when we play the Knicks next week.
just foul him hard till he stops driving. He can’t hit the outside shots
Skeptic con Urquell - February 8, 2012
and my week has gone south quick
Gallo first and now Lowry hurt
wallywagon11 - February 8, 2012
Am I nuts, or is thing all but done?
Everyone knows I run pessimistic, but is there an invisible sword of Damocles hanging out there where I can’t see it? I’m never one to count my chickens, and I don’t believe anything is done until it’s done, but is my read fairly close?
andy sims - February 8, 2012
We're getting there
Last night’s 5-4 split was a bit worrying.
BUT if the City does vote to lease parking and that goes through as planned, I think this is pretty much done one way or another. Same goes if they vote against leasing parking; That effectively kills the arena plan in its tracks, considering its the largest funding source and there’s no Plan B.
Aykis16 - February 8, 2012
Yep. Still too close for comfort
kangsfan - February 8, 2012 via mobile
There better not be a way to force a vote after this 5-4 vote by city council!
How likely is it that Sandy Sheedy and her cohorts will sue to overturn this 5-4 decision? Is that even possible? Please please please God say it isnt!
SacKing4Ever - February 8, 2012
It isn't
lietothegirls - February 9, 2012
It seems close
But I don’t think it can be considered a done deal until it is actually done. There is still plenty of opposition, and details yet to be finalized.
Exhibit G - February 8, 2012
ummmm
what the hell does this mean? Me no do well with numberz.
Dub_TC - February 8, 2012
It means the NBA is going to play a big part in the funding
Aykis16 - February 8, 2012
That's only
13,333 $6,000 burgers. No problem, right? RIGHT?
Carl - February 8, 2012
Is that Barry Lamar on the right??
otis29 - February 8, 2012
He though it was a flaxseed burger.
Carl - February 8, 2012
Looks like he got caught with dope.
bignerd - February 8, 2012
Several dopes, actually.
andy sims - February 8, 2012
Rec'd for being totally dope.
kinglet - February 8, 2012
That 50 million gap must be accounted for somewhere
Or I’d guess KJ would’ve requested 130 million from the league
kangsfan - February 8, 2012 via mobile
BURKLE!
otis29 - February 8, 2012
Yes please
Could the city get some money from the sale of the land underneath ARCO? Obviously it wouldn’t be up front, but if the Maloofs sold that land or forfeited it in the deal, the city should get back their 70 million.
kangsfan - February 8, 2012
Looks to me right now we got around a $76 million gap as of right now.
Just for arguement sake I am assuming we get $200 million for the parking and don’t have to worry about the bonds or anything like that. Just $200 million straight up for the arena. And then assuming $50 million from AEG.
406 – 200 – 50 = $156 million left
I know that Rob McAllister talks about the hotels giving $30 million at best but he adds that up like it’s $30 million of the $406 million to build the arena and that is horribly incorrect unless he is saying the hotels plan on giving $30 million now which there has been no indication that’s what is happening in the slightest.
Now we have this nugget
$156 – 80 = $76 million
wallywagon11 - February 8, 2012
Yeah, hard to fathom the local hotels fronting those dollars
otis29 - February 8, 2012
And the NBA doesn't historically usually do this kind of thing
wallywagon11 - February 8, 2012
right now
right now
now right?
wallywagon11 - February 8, 2012
isn't the value of the land in the rail yard site part of the cost of the Arena
Whatever that was estimated to cost (would look it up if I was on my computer) I assume you can subtract that because the city would pitch it in.
dampania - February 8, 2012 via iPhone app
I agree
and the intermodal $ for infrastructure
ElRonToro - February 8, 2012
I don't remember if that was built in as part of the estimate on the arena presentation from Taylor ICON
But I’m pretty sure the land value was.
dampania - February 8, 2012 via iPhone app
Tried looking for it but no longer at Thingbig
either way though likely doesn’t matter because they would likely be required to rebate Measure A anyway
wallywagon11 - February 8, 2012
Thinkbig
sorry
wallywagon11 - February 8, 2012
I still have the PDF - found it
Here was the estimated budget, before they added the extra $20 million preferred parking structure:
Now I’m not sure if that land acquisition/site development item is actually the price of the land or not. I do see in the PDF that the site analysis/onsite infrastructure looks to be part of the construction costs.
dampania - February 8, 2012
Here we go, from the city's technical review
wallywagon11 - February 8, 2012
Link(toward the end)
wallywagon11 - February 8, 2012
Ahhh, thanks for finding this
dampania - February 8, 2012
So for old folks
you just said 18.1 million of the 386 could come from intermodal measure A $, right?
ElRonToro - February 8, 2012
I know cost went up from $386
but do you think the parking winner would be required to build and pay for the additional parking that made the cost rise?
ElRonToro - February 8, 2012
nope, highly doubt it
in fact would think the parking winner doesn’t win that lot and it’s a revenue stream for the arena operator
wallywagon11 - February 8, 2012
ah! that would make sense
ElRonToro - February 8, 2012
I believe the cost is aroun $406 million now
but yeah between $15 and $20 million will have to go to reimbursing the purchase of the land which was done with Measure A money
wallywagon11 - February 8, 2012
What?? Up to $406 mil? Pretty soon it's gonna cost over a $1 Billion
Wait, sorry….thought this was the SacBee thread for a sec :P
Wonderchild - February 8, 2012
ug, that's not necessarily true actually
unfortunately don’t have the answer but good point
wallywagon11 - February 8, 2012
Don't take my word for it
but I believe the land sales are still on the table ad should account for an extra 20-30 million. Still a gap there, but getting closer
edm7 - February 8, 2012
Magic Johnson said he'd chip in?
Scott Section 213 - February 8, 2012
Whatever happened to CWebb and the investors that he was trying to work with?
Does anyone know if they’re still involved?
ina_118 - February 8, 2012
shit forgot
if the loan to the Maloofs is something they require to be dealt with here that would jump it to around a $143 million gap
So basically between $76 million and $143 million without taking into account selling property. The green cards were only talked about as a type of bridge loan (okay absolutely not a bridge loan in the technical sense but I mean to just cover building the sucker while we try to get the property city sold).
wallywagon11 - February 8, 2012
and I seem to recall they were looking at taking the money from the Convention Center as well
but forgot how much. 50 million?
wallywagon11 - February 8, 2012
Not only did KJ tell the NBA that the Kings can't leave.
But he is also telling them to give him $80 mil so they can stay.
Like a Boss!
The Guy on the Couch - February 8, 2012
I really hope this arena gets built.
It would be a major let down if we let this slip through our fingers.
Reke_Havoc13 - February 8, 2012
And the Malindas STILL owe Sacramento 70 million, right?
folsomfella - February 8, 2012
pretty sure it's around $67 million now but it's owed really to Goldman Sachs
could be wrong though. I had it on my computer and had to delete it but you can find the documents on the city’s website showing how much in principal they have to pay each year on their loan.
We also know that they had previously maxed out their line of credit with the league when it was set at $75 million and it is rumored they possible maxed out the league’s new line of credit of $125 million (it’s rumored that most of the 19 teams that have used their credit have maxed it out).
wallywagon11 - February 8, 2012
Question for someone who really knows their stuff:
Given that the Jibboom Junkyard was a Superfund site directly adjacent to the railyards, and even though since cleanup was completed, it has since been deleted from the National Priorities List by the EPA, couldn’t there be some federal redevelopment grants available for reclaiming a former toxic moonscape?
From the EPA study I looked at, it seems like given that the old junkyard extended slightly east of where I-5 would eventually be (as seen from a 1957 aerial shot)…
The initial Five Year Review was done in 2007, so it would figure that another should be due by the end of the year, and possibly sooner.
I just don’t know a hell of a lot about procedure, and I’d figure someone would have looked into it, but I don’t recall ever reading about it. You’d think between EPA, HUD, and ARRA, there’s got to be some infill development cash, particularly where infrastructure investment is concerned.
andy sims - February 8, 2012
I think it would be kind of difficult to get any more federal funds for the arena project other than what they already got for the intermodel train facility
wallywagon11 - February 8, 2012
Not really sure where to post this
Wally, thanks for being informed about all the ESC stuff- I can’t make heads or tails of it and really lean on you and a few others to explain it. Props!
lead_pipe - February 8, 2012
$10 million from the Brick by Brick campaign could be added to the total...
SacKingAaron - February 8, 2012
Instead of the brick idea...
They could just ask for donations of say $20 minimum. Then when the new ESC is built, just put in a huge plaque with everyone’s name on it that donated right inside the main entrance and call it a “Fan Wall”
Or you could have people buy a small space on this “Fan Wall” and let the fans design whatever they want to put in their square. The more you donate, the bigger the square you get.
Wonderchild - February 8, 2012
They should do as the SF Giants did.
Outside AT&T, they had bricks put into the cement AND you got a replica for display at your home. I think that’s what I saw at one game there last season. They were pushing hard to sell them, kept a limit as far as how many.
Scott Section 213 - February 8, 2012
If people haven't been already, Peaches is having a pretty good show talking about the arena right now.
From what I’ve heard from listeners they’re all pro so far. I think the haters are afraid to call
ina_118 - February 8, 2012
wait, the local sports guy who has been the TV guy for the Kings has a lot of pro Kings fans call his show?
Who knew!
wallywagon11 - February 8, 2012
haha I see what did there. But there's usually ALWAYS the idiots that call talking about "no money blah blah blah"
ina_118 - February 8, 2012
Also, not a Kings issue, but a Sac issue, right?
ina_118 - February 8, 2012
Yes...and...no.
It is an issue for Sacramento Kings fans. :)
Scott Section 213 - February 8, 2012
It definitely is!
But I do think that it’s very important to try and reach those that aren’t Kings fans to get on board, because if people continually see it as a Kings issue, it’ll be harder to get the support needed.
Grant is talking like it’s a done deal though, which I don’t appreciate. Not over yet Grant!
ina_118 - February 8, 2012
Im crossing my fingers from Hungary guys
Bought a Lottery ticket this week, if i win it, im gonna spend at least half of it for the arena. :)
Yeah i know. Lottery and the Kings in the same sentence. Its not gonna happen.
Tonyiommi - February 8, 2012
So if you do win, we should be able to write you in for $500?
HeuristicLineup - February 8, 2012
Testing, testing
Whew!
I read the new Timeout thread and couldn’t post a comment!
I thought I had become the first casualty, which would have been quite the accomplishment considering I haven’t been on in a few days!
Dirkula - February 8, 2012
Comments were closed on the Timeout thread.
Aykis16 - February 8, 2012
I'd never seen that before so I was worried! lol!
All I was gonna say, was that I was excited to see our new Small Forward, because if its nearly half as good as that take, then we will be looking at an All Star Hall of Famer!
Dirkula - February 8, 2012
Our first test on the new Small Forward did well in terms of skill.
Unfortunately the computer took the word “Small” too literally, and he came out only a foot tall.
Aykis16 - February 8, 2012
No worries, he will probably perform better than the current model.
Slam_Dunk - February 8, 2012
Exhibit G - February 8, 2012
This is kind of disturbing
Rec worthy, none the less
kangsfan - February 8, 2012
"He's about the size of a Grecian Urn."
“What’s a Grecian Urn?”
“Oh, about $8 an hour.”
section214 - February 8, 2012
Wingspan isn't great
But at least he’s handsome.
Aykis16 - February 9, 2012
Flagged
Exhibit G - February 9, 2012
If he carried a hammer around with him,
he could still be an ankle breaker.
elfboy_ - February 8, 2012
How much capital is actually needed up front to get this started?
Obviously I don’t know much about how public works projects are structured time and money wise, and I’m well aware that they’re not going to just start a project and hope there’s money later to fill in the rest, but we shouldn’t need all of the $406 million up front, right?
Also I imagine naming rights would be a good source of whatever gap money we need to fill, but I don’t know if those are yearly payments or up front. I know the Power Balance sponsorship was cheap, because of the short term nature of the deal, but a longer deal from a more reputable sponsor should probably net us more than we were getting before. And that’s city money this time, and not Maloof money.
jveezy - February 8, 2012
We'd need the $406 million up front
don’t know about naming rights because that requires participation with AEG and the Maloofs because they want their split too. Plus, it’s an annual payment not up front (I guess the first year can go to it though).
I have no idea how they usually split up the air rights on these things or if it is even done with most other arenas but would have to think that would have to be figured out too with AEG and the NBA and basically the same.
Either way though, the amount PowerBalance doesn’t mean shit here. They were paying for naming rights of an arena that had the same name for over 20 years (how many people are really going to call it something else after that point) and they knew the Maloofs were in a precarious spot. Nobody was going to pay for those naming rights. Granted it is completely up in the air how much they’ll make on a new arena but the whole PowerBalance thing should in no way be an indicator on it.
wallywagon11 - February 8, 2012
*amount PB paid doesn't mean shit here
wallywagon11 - February 8, 2012
Right. I brought them up as a means to say that's probably the bare minimum we'll get from it.
jveezy - February 8, 2012
there's been a huge change in corporate America about how they decide to do sponsorship deals so it is a bit up in the air
but even the minimum should really be much more money than the PowerBalance one
wallywagon11 - February 8, 2012
Is this worded right?
I know the Hotel Occupency Tax money was likely pouring into this but this statements reads like $30 some odd million from the hotel association. It’s coming from a room fee?
wallywagon11 - February 8, 2012
They are voluntarily putting a surcharge on themselves to provide funding to the ESC, because the know with events that come into this area, they are going to making some decent profits..
Widowwolf - February 9, 2012
that's what I thought
but when I read “room fee” it sounded like it was passed on to the customer. That would surprise me a little if that were the case.
wallywagon11 - February 9, 2012
I always thought a "fee" was self-assessed and an increase on the tax was directly paid by the consumer
But let’s be real – the fee would most likely be paid by the consumer as well.
otis29 - February 9, 2012
yeah when I see "room fee" I start wondering "Wait is that the hotels in the area chip in by # of rooms" or "Wait is that an itemized part of the bill for people staying overnight."
would think it would be a little more tricky if it was the second one
wallywagon11 - February 9, 2012
Sorry for the unclear wording
Trying to simplify the language from “transient occupancy tax”, which makes eyes glaze over.
Tom Ziller - February 9, 2012
sorry for bugging you again
but did you mean to basically write “The hotel assocation has committed to some level of investment via a hotel occupancy tax.” Because pretty sure the whole room occupancy tax thing is very much a separate funding mechanism than what the hotel association is talking about doing.
wallywagon11 - February 9, 2012
(as a sidenote)
I fee like we need a damn flowchart
wallywagon11 - February 9, 2012
I got your
Flow Chart right here
Widowwolf - February 9, 2012
Great but we have to clear this parking hurdle first
deadenddude - February 9, 2012
This is true,
but getting these reports out that most (if not all) of the money needed for this ESC is going to be accounted for before the city council votes on the parking lease project may make it easier for the council members to approve it.
Well, theoretically at least.
Wonderchild - February 9, 2012
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