Posted by: Kingsguru21 | January 24, 2012

Does selling parking spaces justify a new arena?

Read the title, and, I can already see the thought going through your mind with “uh oh” to which I can reply,” Hakuna Matuta brotha!” (Or sista. But I’m not sure there were sista’s in Lion King…. At any rate…) The question about the parking in Sacramento is: How valuable is the parking now, how valuable is the parking likely to be in the future as the current setup (without an arena), and how valuable would those parking spaces be if a new arena was placed using different funding mechanisms?

Let’s deal with the 3rd part first. On January 21st, Evan Weiner of wrote a pretty predictable piece that pretty much sums up the anti-arena sentiment to a tee.

The real question: Is how much money over the 50 year period (or whatever time frame Sacramento would be leasing these parking spots for) would the city of Sacramento be giving up by taking an up front payment instead of waiting out the long term and collecting these payments for themselves.

Here’s the best question that a lot of anti-arena people haven’t considered: How does payment of the debt on those parking spaces/garages cut into the annual profit of these parking spaces? If it does cut into the revenue, how many services would this diminish because the debt first and foremost would have to be serviced? Additionally, because this is how debt works, how much interest would you accrue doing it this way?

In otherwords, does the long term debt and interest pay off the real difference in having these parking spaces 50 years? What if the revenue (Weiner says it’s 24 million annually) diminishes over time due to decreasing population 1), due to lack of employment because most private employers find Sacramento an uninviting business environment full of bedroom community ninny’s 2), or simply due to nature of the beast3)?

Those are the 2 important questions that anti-arena people simply cannot answer because it leads them down the uncertain path of “Why are you against a new arena in the 1st place?”

Well, that brings me to the 2nd part part of this equation.

There is alot of sentiment against selling parking because, rightfully so, the anticipation that parking will become more valuable with a new arena bothers a lot of people. You can’t have it both ways, but, as per usual, most expect you can have it coming and going. Guess what? You can’t. To get something you have to give up something. Resources at the City of Sacramento’s disposal are not abundant, the ability to replace an arena at the Railyards is not exactly teeming with numerous amounts of real possibilities that will generate the type of numbers needed to justify an expensive project that those railyards will be no matter who benefits.

Do you really care if some asshole billionaire gets rich as opposed to another asshole billionaire? Because that’s what we were are talking about here. The little guy isn’t getting ahead no matter what is proposed. Yet, if you listen to anti-arena proponents, that’s what we were are talking about “supposedly”.

Most vocal opponents of the arena are A) community activists who are concerned (understood) B) people who want to use the Railyards for the won’t cost you as much as that ghastly arena did. (This is always horseshit: It’s code for,”We won’t ask you for money unless it’s on the back end and our business is in ‘peril’.”)

Last but not least, there is always the tried and true favorite of anti-arena’ists by mentioning how other metropolises got screwed. Here’s a reality: What Chicago did was stupid. Sacramento is not in Chicago’s position so how exactly is the situation in Sacramento a carbon copy of what happened in the Windy City? (Answer: It’s not.)

How does building a facility in Chester PA (near Philly) and Harrison NJ (near New York City) compare to a city that is the largest in the region? Or, more accurately, how does it compare to said city chafing that it’s seen as the centerpiece when a heavy number of the older residents wish to bury their head in the sand and flip the bird to everyone who wants to see an actual modernish cityish type of environment in Sacramento?

Here’s a reality check anti-arena folks: Build a project in those railyards because it is one of the largest urban in-fill and replace the higher possibility (not a guarantee–but what is?) of significantly larger crowds for Kings games AND events.

Here’s the other truth that a lot of people have conveniently ignored: The Maloofs have repeatedly said recently they don’t wish to operate an arena.

Back to Weiner and the damning part of all this:

What Sacramento officials are trying to do is satisfy the Maloofs and NBA Commissioner David Stern’s demands which are give us an arena where we get the federal limit of 92 percent of every dollar generated within the building, how you pay off the arena is your problem not ours. The 92 percent is not limited to 41 regular season games annually, along with a couple of pre-season games and the possibility of up to 16 playoff games or maybe 60 dates. The Maloofs would get a substantial percentage of the revenue generated by every other event in the building including concerts, ice shows, minor league hockey and the circus.

There is a lot wrong here. There is no way the city of Sacramento will 92% of the building first off. Second, the Maloofs have said quite a bit recently they are NO LONGER interested in being an operate of an arena. (Probably because they can’t afford it.) Which means who can? AEG, who if part of the financing mechanism, will pay part of the up front construction cost in return for the right to operate and profit wildly off a new arena. (Kind of a pay to play scheme yes?) Third, the percentage the Maloofs get as part of a new arena is not based on what has happened in the past. I can guarantee that the Maloofs will almost certainly get signage rights (which is how they would pay their portion of a new arena) and little else 100% from a new arena.

In otherwords, if you put the cart before the horse, you get articles what Evan Weiner just wrote. It’s too bad too: If you like rhetoric this is the piece for you. If you live in reality land where complicated things are complicated, where progress is not as simple as selling/not selling parking spaces or building arena’s, then perhaps it’s not the time for silly rhetoric.

This is a decision about what kind of place Sacramento wants to be. An arena, which is mostly about land value (tha’ts important yes?), is only a small part of that in actuality. Given the lack of valuable land around Sacramento, that means vultures who are waiting for the right time to sell off property when land becomes valuable. (It may be a matter of time, but is it?) Which is probably where much of the vocal opposition is actually coming from. (These vultures stand to lose quite a bit if land around them is forced to sell at less than what a developed right now property costs.)

This entire argument is about which group profits. It’s not about whether Sacramento profits. Personally, I’d like Sacramento to get the profit end of the deal AND keep something that does engender some amount of civic pride. I don’t think it’s reasonable to tear down community theatres (even though I have no interest in them) or not pay for those types of art because they cost money. I think investing in your community includes an investment in arts, an investment in civic pride, an investment in land, an investment in the future, and an investment in pride that says this is about us. These things cost money, but do they truly become a heavy cost compared to the benefit? (This is a rhetorical question: Every person will answer that differently.)

No matter what any anti-arena opponent says, this is a complicated decision. Anti-arena’ists would do themselves, and those of us who do support a new arena, a lot of good by simply acknowledging that the Maloofs, and the NBA, are really at best supplementary parts to this discussion. But, that cuts out the angry rhetoric so what good is that?

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