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.

Pacers coach Nate McMillan slips and falls while arguing call (video)

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Nate McMillan slipped up in his handling of Victor Oladipo‘s early fouls during the Pacers’ Game 2 loss to the Cavaliers last night.

Then, the Indiana coach literally slipped while arguing that LeBron James should have been called for offensively fouling Lance Stephenson.

LeBron James: Reporter warned me about question on Gregg Popovich’s wife before live TV interview

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In her on-court interview with LeBron James following the Cavaliers’ Game 2 win over the Pacers last night, TNT sideline reporter Allie LaForce asked him about the death of Gregg Popovich’s wife.

LeBron appeared emotional as he gathered his thoughts.

That prompted some to criticize LaForce for ambushing LeBron on a sensitive subject on live TV. But that’s not what happened.

Uninterrupted:

LeBron:

I’m not on social media right now, but I was made aware through some friends through texts that a question was asked to me postgame, and a lot of people feel I was blindsided. That is absolutely false. Allie LaForce told me that she was going to ask the question and if it was OK.

And once I started talking about it, once we were on air, actually my emotions kind of took over. And that was just my emotions coming straight from my heart about the late Erin Popovich.

It’s unfortunate. It’s a tragic loss. My thoughts, my prayers, once again goes out to the Popovich family, to Gregg, to the Spurs family, to the whole Spurs fan base.

And also guys, please get off Allie LaForce’ back, because she followed the proper protocol and she warned me. So, get off her back, man. She’s very professional, and she does a great job at her work.

Like I said, thoughts and prayers to the heavens above. We all know the man above never makes mistakes, even when we question it. But it’s a sad, tragic time right now for the NBA family, and we’re all praying and hoping for the best.

It would have been surprising if LaForce hadn’t done that. Somewhere between nearly nobody and absolutely nobody in her position is trying to embarrass players.

PBT Extra: If Portland is going to turn series around it starts with Damian Lillard

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This was the year the Trail Blazers were going to break through. They were defending better as a team. There was some depth on offense. And Damian Lillard was playing at a level that will get him on many voters’ MVP ballots.

Instead, they are down 0-2 to Anthony Davis and New Orleans, having dropped both games at home to open the series. Portland is on the verge of being bounced in the first round for the third time in four years.

If Portland is going to turn this series around, it starts with Lillard, something I discuss in this latest PBT Extra. C.J. McCollum needs to get more buckets, Jusuf Nurkic needs to contribute more on both ends, but for Portland it all begins and ends with Lillard and it’s on him to start the turnaround.

Rockets easily overcome James Harden’s horrid shooting night, win Game 2 over Timberwolves

AP Photo/Eric Christian Smith
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James Harden shot 2-for-18 – the worst field-goal percentage (11%) on so many attempts in a playoff game in nearly a decade and the worst ever in a first-round game.

The Rockets still won by 20 because of their stout defense, a strong supporting star in Chris Paul and Harden’s foul-drawing ability.

Houston’s took a 2-0 series lead with a 102-82 win over the Timberwolves on Wednesday. Game 3 will be Saturday in Minnesota, but the top-seeded Rockets have seized firm control.

Every No. 1, No. 2 and No. 3 seed to take a 2-0 lead in a best-of-seven first-round series have won it. There’s little reason to believe Houston will become the exception.

The Rockets are no longer as reliant on Harden, the likely MVP who seemed to wear down last postseason.

They buckled down defensively before letting up in a fourth quarter that was entirely garbage time. Houston forced more turnovers (16) than allowed assists (15) and contested shot after shot.

It’s becoming increasingly clear the Timberwolves have no quick solution to the Karl-Anthony Towns problem, and it’s not simply a matter of deciding to feed him more. Yes, he can get favorable post matchups against the Rockets’ switching scheme. But Minnesota lacks quality entry passers. The Timberwolves are also short on shooters and need him to spread the floor – even if that skill is less-helpful after a switch. Towns scored just five points in 24 minutes tonight.

His teammates were barely, if at all, better. The focus has turned to Towns, but this was a far-wider letdown.

On the other hand, Paul (27 points and eight assists) led Houston’s offense. Gerald Green (21 points and 12 rebounds) got hot. Even Harden (7-of-8 on free throws) chipped in thanks to his elite foul-drawing ability.

The Rockets aren’t always the most enjoyable team to watch, and that was the case tonight. Mostly, because they put this game out of reach long before it actually ended.