Sacramento — Kings and Serfs
The City of Sacramento, CA, is trying, for some reason, to finance a new arena for its NBA Basketball Team, the Kings. The deal is that the city would build the arena and then lease it back to the Kings. They want to pay for the deal by doing a PPP on their parking and pick up $200 million to fund the effort.
The former city treasurer, in this article attempts to make a case for the deal by comparing it to Indianapolis. I’m not sure its the same. Indy cut a long term payout receiving money continuously over the term of the deal and then earmarking the money, I think, for upcoming infrastructure projects in the city. That to me is a lot different than getting a chunk a change up front and seeing your asset make money for someone else for the next 50 years.
First of all — why is a public agency funding a private company? The Kings are a privately owned entity, the owners are going to make millions going forward. If this is a good deal, let them got to a bank, or venture capitalist, or developer, put together funding and build their own arena. Why should the city be involved? If the money isn’t there going forward, its not a good deal for the city and simply a boost for a private enterprise. (I need a new office building — So I should be able to go to the city and have them build one for me and then I will move in and pay them rent? I can’t see that happening. This is no different.) And don’t give me all that about thousands of jobs and all the spin offs. If the owners want the Kings to play in Sacramento ( and they probably have to for a while, the NBA will see to that) then let them build a new stadium themselves. NYC supported the Yankees building a new stadium and they ended up taking it in the shorts, for hundreds of millions. And the Kings aren’t the Yankees.
Second — By my very rough numbers, Sacramento will leave about $700 or more million on the table. Wouldn’t they be better off hiring a professional to run their parking operation? Pay enough to get someone who knows what they are doing. Invest a bit in new parking equipment, and then bring the prices up to market levels, collect all the money, and live in fat city.
But then, what do I know — politicians want it all now — probably to pay off debts that they incurred in the past. Sigh