SACRAMENTO, CA - The Sacramento City Council is poised to vote Tuesday night on whether to approve plans to build a new entertainment and sports complex (ESC) over the downtown railyards.
A year after the Kings almost moved to Anaheim, Sacramento's plan to help finance a new $400 million ESC is a vote away from approval Tuesday night.
Mayor Kevin Johnson and the Think Big committee worked with the NBA; the Maloofs, owners of the Kings; and AEG, an arena management company, to develop a plan to fund the construction of the entertainment and sports complex (ESC). They also decided how to spilt revenue taken from events held at the arena.
PHOTOS: People gather at city council for vote
Last Thursday, the city of Sacramento released the term sheet, outlining each party's financial obligation toward the venue's price tag.
|City of Sacramento via parking assets
|Kings Owners the Maloof Family
|Brick-by-Brick campaign via donations
The non-binding term sheet, signed off by the Kings and the NBA last week, would also keep the team in Sacramento for at least another 30 years.
READ MORE: 45-page Sacramento term sheet
David Taylor from the ICON-Taylor group agreed to build a parking garage near the complex after the Maloofs and AEG requested it.
PHOTOS: Sacramento arena drawings
The city of Sacramento plans on contributing $256 million to ESC construction costs by privatizing city parking assets.
The city would lease its parking assets to a private company for the next 50 years. In return, the company would pay the city, nearly or equal to, $256 million up front.
Sacramento then will turn around and put that money toward building the ESC.
If the city comes up short of the $256 million, it has little parcels of land ready to sell to make up the difference.
Sacramento County has agreed to share another $3 million from its parking revenue. On Monday night, the Rancho Cordova City Council authorized the city manager start discussions with Sacramento leaders on how Rancho Cordova can encourage the development of the ESC.
In mid-February, the Sacramento City Council voted to start requesting bids from interested private companies.
The hole in the city's budget that is usually filled by parking revenue will be filled by $9 million from the parking asset lease. Eventually, 5 percent ticket surcharges from the ESC will fill that gap.
The city will also re-issue new bonds to retire their old debt on the Power Balance Pavilion, which means they will re-do the loan they already have in order to have enough cash to make the new arena plan work.
Project cost over-run will be absorbed by Turner Construction, the company assumed to manage the project.
Turner has been working on the project for free thus far, so will have the right of first refusal once bidding begins. If another construction firm enters a lower bid, Turner will have the opportunity to match it.
The plan is for Sacramento to eventually earn money once the new arena is operational.
Once $10 million is earned in profits, Sacramento will get $1.5 million. The next $5 million will earn another $1.5 million for the city, and after that, 50 percent of all profits will go to the city.
Meantime, opponents of Sacramento using public resources to help pay its portion of a new venue are circulating a petition urging city leaders to not commit Sacramento to the high price tag when public safety and other services are being cut.
Councilwoman Sandy Sheedy, who has voted against the arena in actions up to now, sent a paper to other council members detailing how the economics of the venue may be too optimistic.
READ: Sheedy's Stop Think Reconsider argument
News10/KXTV and The Associated Press