Sacramento Kings arena funding plan to be released Sept. 8

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We don’t know the specifics of how the city of Sacramento plans to pay for the proposed $387 million Entertainment and Sports Complex (ESC), but we do know when they plan to announce those plans.

According to Ryan Lillis of the Sacramento Bee, a menu of funding options will be presented to the public on September 8, with a more detailed report being released on September 13 to both the public and City Council.

According to Lillis:

While precise details of the financing plan are still unknown, Chris Lehane, the chair of the task force, said in a new release this morning that it will include “contributions from both the public and private sectors, including the Kings ownership group, arena developers and operators.”

He also added:

It’s also expected that an arena operator – a company such as AEG – will be approached to help with the construction costs.

While the city of Sacramento’s efforts to keep the Kings have appeared at times to be as desperate as a 55-foot game-winner, the framework for the proposed funding options has been a relative constant, and has always been envisioned to be a mix of private and public funds.

Hotel and airport taxes have been discussed, but more recently the pencil has been sharpened to include user fees such as ticket surcharges and parking fees, in addition to the sale of city-owned properties, corporate sponsorships, and revenues originating from cell phone towers and electronic billboards placed on the ESC.

In short, every dollar will count as they tally up the funds, and the inclusion of a company like AEG to both fund the project and operate the arena sounds like a must at this point. That their name continues to come up in on-the-record and off-the-record discussion is a great sign for Kings fans.

And as we posted in June, the Maloofs liquidated most of their interest in the Palms to enhance their financial flexibility. While they could have done that simply to free up money for their continued involvement in the Palms, as George Maloof said was the case at the time, it stands to reason that being relieved on a $400 million note will help them be able to pitch in.

So where does the rubber meet the road here?

First, the Think Big Sacramento coalition, which includes 70-some odd politicians, businesses, community leaders, and the original grassroots leaders such as Carmichael Dave and Here We Stay — they will need to procure support within the Sacramento City Council, and then also have enough public support to marginalize attacks from any opposition groups. Attacks could come in the form of lawsuits seeking injunctive relief, most likely on the grounds that the use of public funds will require a public vote. The Kings arena effort would likely come up short if a vote is needed, so avoiding such a challenge will depend on the exact nature of the public funds being used and the appetite for opposition groups to go through a costly legal and political fight.

A lot of that appetite will be derived from what the folks in the Sacramento region actually think about this public subsidy. Losing the Kings will necessarily be a blow to the area, and most believe they will not be able to get an NBA team back should they lose this one. In the battle to attract businesses and the new-age worker that values a city’s identity, this could be a defining moment for the entire region.

And that is where the battle for public opinion is taking place. The Think Big Sacramento group is doing a commendable public relations job, with interactive campaigns targeting not just Kings fans, but folks that may be more inclined to see Disney on Ice than five shooting guards and one basketball. Between the town hall meetings, the dominant social media work they’re doing, and local events featuring non-basketball types such as world-renowned artist David Garibaldi (seriously, check out his work) – it’s safe to say that they’re not making the mistakes of the ill-fated arena tax campaign from 2006 that was easily rejected by the voters.

But as with anything else, you have to follow the money, as public funds come with questions about tax allocations, economics, and the like. Today, I spoke with leading sports economist Brad Humphreys (and expert witness in the Sonics vs. Seattle case no less), who has been outspoken about the problems with sports stadium subsidies (as are most of his colleagues), and the takeaway is that this isn’t just a Sacramento issue – it’s a United States issue.

Due to the artificial lack of supply (teams) in the major sports leagues, a De facto monopoly, teams have the leverage to demand public subsidies. If the city of Sacramento wants to belabor the point, the Kings will have a new address in Orange County – and that scenario has played itself out a number of times.

I’ll be scratching together another post about my conversation with this economist, which covered everything from sports subsidies to the Kings to the lockout. Interestingly, he said he wasn’t against the Kings’ arena subsidy, and in one (not yet peer-reviewed) white paper he wrote,

A new state of the art facility integrated in a comprehensive urban redevelopment program and located in the heart of a large city might be expected to generate increases in residential property values in the vicinity of hundreds of millions of dollars within a mile of the facility, if the location, planning, construction, and development are carried out carefully.

While most economists are mostly aligned in saying that no empirical evidence has been found to show that the presence of sports teams and so-called big sporting events (i.e. the Super Bowl) actually bring in additional tax revenue, let alone to cover the cost of the subsidy — it doesn’t mean that the proof doesn’t exist.

Sacramento County had a $40 million reduction in budgetary revenue this year due to the drop in property values in the area, which is money that they’re not getting back. That loss of revenue comes from the fact that people aren’t willing to pay as much to live in the Sacramento region.

So assuming, annually, the county gets the 1% property tax revenue on a theoretical ‘hundreds of millions of dollars (of increased property value) within a mile of the facility,’ this unexplored area of sports economics could answer the question as to why cities continue to ignore economists’ clamoring. While people may spend their entertainment dollars elsewhere (the substitution effect) if the Kings are not in town, they won’t necessarily pay as much to live there. The intangible benefits of living by your favorite sports team or having the option to go to an A-list show – those benefits may be being capitalized in ways economists have yet to find (or in this case, may be on the precipice of finding).

Humphreys took great care to point out that the case of Sacramento is unique, and that cities with downtown revitalization projects have had both success and failure. But in the world of data that economists live by, one thing is clear – they’re simply not ready to buy the economic impact reports that teams are selling, but they’re also not ready to rule out that the sports subsidy could be a good thing.

After all, everybody is doing it.

Akron store already selling “Stay Home 23” shirts, hats as LeBron decision looms

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We’ve seen this movie before.

There is all sorts of buzz around the league that LeBron James has one foot out the door in Cleveland. While people around LeBron denied he the rumor he is “100 percent” leaving, good luck finding any league source who thinks he is staying put next summer. Nothing is set in stone, his options — including staying — remain open, but we’ve all been down this road before.

The hometown fans are going to do their part to urge LeBron to stay.

Fan sentiment has some pull with LeBron (he came back to win the city a title). However, what matters more is a sense of a plan to keep the Cavaliers as title contenders for the coming years — and that is more than just Dan Gilbert paying the tax. The Cavs did nothing this summer that got them closer to beating Golden State, and while they swung for the fences with Paul George, what they really needed was wing defenders and athletes, and they didn’t get those either. Luc Mbah a Moute signed a one-year deal for the minimum somewhere else. Instead, Cleveland overpaid Kyle Korver.

Despite all that, the Cavs remain the team to beat in the East. If Cleveland gets to the Finals — LeBron’s eighth in a row — and they win or make it close, he may see staying as his best option. A season can be a lifetime in the NBA in terms of shifting attitudes. Still, I wouldn’t bet the rent on it.

Marshall Plumlee gets camp invite, partially guaranteed contract from Clippers

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The Los Angeles Clippers have 14 fully guaranteed contracts on their roster, plus a partial guarantee for DeAndre Liggins (who likely is on the roster opening day). They also are pretty much set at center with DeAndre Jordan and Willie Reed (plus when they go small they can play Blake Griffin there, something I wish they’d do a little more).

That said, Doc Rivers — just a coach now — needs bodies for camp, so in comes former Duke star and Knick Marshall Plumlee, reports Adrian Wojnarowski of ESPN.

Plumlee played in 21 games for the Knicks last season, logging a total of 190 minutes. He bounced between New York and the D-League Westchester Knicks, when down he averaged 12.3 points and 9.8 rebounds a game.

He’s not making the Clippers’ squad (barring injury), but he could show well and get noticed by other teams. Over the course of a season, there will be a need for bigs as guys go down injured, Plumlee is getting a chance to show how his game has developed. And he makes some money in the process.

Kawhi Leonard is smiling, and that confuses Manu Ginobili (PHOTO)

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Much like Kevin Durant, it appears that Kawhi Leonard is having a great summer.

In fact, this appears to be the Summer of Kawhi Smiling. Which, according to one of his longtime teammates, is a bit confusing.

When the Spurs posted a photo of Leonard with a big old grin on his face to their Twitter feed recently, San Antonio legend Manu Ginobili responded asking the team whether something was up.

Specifically, Ginobili said that he had seen more photos of Leonard smiling in the past two days then he had in six seasons as a teammate.

Via Twitter:

You can leave an anonymous tip about why Kawhi Leonard is smiling so much by contacting the produce manager at your local H-E-B.

Kobe is the Lakers’ all-time leader in steals (and other trivia rookies don’t know)

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“He played 20 years … I mean, yeah I guess.”

That’s what Los Angeles Lakers rookie Lonzo Ball had to say in this video after learning that Kobe Bryant was the all-time leader in steals for his franchise. You have to hand it to him, it is a little surprising. Even more surprising is that Bryant has 220 more than Magic Johnson at No. 2.

In a video posted to YouTube by Complex on Saturday, rookies tried to answer questions similar to the one Ball pondered over, like what team drafted their head coach, who the NBA all-time leading scorer is, and what day the first game of the season starts on.

A lot of the responses were pretty funny, including the guys getting wrong what year Adam Silver became NBA commissioner. Poor David Stern has already been forgotten about!

Meanwhile, Ball looked the sharpest. He’s going to come in handy when the Lakers play pub trivia.