Sacramento Kings arena funding plan to be released Sept. 8

Leave a comment

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.

Stan Van Gundy backs off feud with ESPN ahead of televised Pistons game

Rob Carr/Getty Images
Leave a comment

Pistons president/coach Stan Van Gundy said he wouldn’t give ESPN its usual access – a private pre-game meeting and an in-game interview – in the aftermath of ESPN publishing LaVar Ball’s negative comments about Lakers coach Luke Walton.

The first test of Van Gundy’s new policy comes with today’s Pistons-Wizards game on ESPN… and Van Gundy is mostly backing down.

Van Gundy, via Rod Beard of The Detroit News:

“I got an email from Rick Carlisle of the coaches association and they want me to cooperate, so my whole idea was to boycott the thing in support of coaches,” Van Gundy said. “If the coaches don’t want that, then it would be a selfish thing, sort of a grandstanding thing.”

“I’m certainly not looking to do extra stuff with ESPN.com when those guys call and want to do things,” Van Gundy said. “They want to put themselves out there as a journalistic enterprise — they’re clearly not. They don’t have any journalistic standards. I have no obligation to do anything extra.”

Many media members have quoted Ball on a variety of issues. Coaches threw a fit over this one because they’re sensitive to coaches being criticized. It wasn’t about journalistic ethics or the source. Van Gundy and other coaches simply didn’t like Ball’s conclusion.

I’m so glad Van Gundy is no longer grandstanding. [extreme sarcasm]

He’s not obligated to speak with ESPN reporters, but when Van Gundy rails on journalistic standards as cover for disagreeing with the opinion a journalist published, he sounds a lot like the guy he loves to criticize.

Pistons’ Jon Leuer to undergo season-ending surgery

Gregory Shamus/Getty Images
Leave a comment

Jon Leuer‘s ankles survived this.

But apparently they’re not invincible.

Rod Beard of The Detroit News:

After suffering a sprained ankle on Oct. 31, the symptoms worsened, as an exam revealed bone fragments and other issues. Leuer has missed the last 35 games and has decided to have season-ending ankle surgery, he told The Detroit News on Friday.

Leuer, 28, has scheduled the procedure to remove bone fragments for next Friday and will have a four-month rehabilitation process.

The Pistons have applied to the NBA for a disabled-player exception

The Pistons have been without Leuer for a while, and they’ve done fine without him. Anthony Tolliver is a capable backup stretch four, and Henry Ellenson adds even more insurance there. Detroit misses Leuer as a stretch center, providing a different style behind Andre Drummond, but Eric Moreland and Boban Marjanovic have at least decently handled those reserve minutes.

The bigger issue: The Pistons are paying Leuer $10,497,319 this season and owe him $19,510,724 over the next two years and don’t miss him that much. He’s a luxury they don’t need and maybe can’t afford.

Perhaps, they’ll deal him before the trade deadline, as they look to upgrade the roster for a playoff run. Detroit could send Leuer and a draft pick or young player (Stanley Johnson) for a better player on a more favorable contract. How about Leuer and a first-round pick to the Bulls for Nikola Mirotic?

A disabled-player exception (DPE) would be worth $5,248,660, half Leuer’s salary. It could be used to sign a free agent for the rest of the season or trade for a player in the final year of his contract.

But the NBA grants a DPE only if a league-appointed physician rules the player is “substantially more likely than not” to be unable to play through June 15. The reported timeline would have Leuer back in May.

Still, the league tends to be lax with giving out DPEs. Detroit has a chance to get one.

The Pistons are just $2,745,417 below the luxury-tax line. So, they’re unlikely to use a full Leuer DPE to acquire another player (and would still need to clear a roster spot). But it could be helpful in facilitating a bigger trade.

PBT Podcast: All-Star starters mock draft, picking reserves

Getty images
Leave a comment

The votes are in, and LeBron James and Stephen Curry are your All-Star captains.

For the first time in NBA All-Star history, that means they are picking their own teams, playground style, first from the pool of starters, then the pool of reserves. Kurt Helin and Dan Feldman of NBC Sports take on the roles of LeBron and Curry and pick their All-Star starters, from James Harden through Kyrie Irving.

Then the pair gets into who should be the All-Star Game reserves — and choosing among the Western Conference guards is brutal. Do they leave out Damian Lillard? Lou Williams? Klay Thompson? And that’s not even getting into Paul George being a bubble All-Star in a deep West.

Kurt and Dan break it all down, plus talk some Kemba Walker trade scenarios.

As always, you can check out the podcast below, listen and subscribe via iTunes at ApplePodcasts.com/PBTonNBC, subscribe via the fantastic Stitcher app, check us out on Google play, or check out the NBC Sports Podcast homepage and archive at Art19.

Aaron Gordon forgoes desperation attempt to win, sinks halfcourt shot instead (video)

Leave a comment

The Magic were in dire straights near the end of their game against the Cavaliers last night. Orlando trailed 104-103 with 0.2 seconds and a jump ball to be tossed at center court. By rule, the Magic didn’t have time to catch-and-shoot, let alone recover the jump ball then shoot. Aaron Gordon had to tip the jump ball through the hoop from halfcourt – nearly impossible, but technically possible.

Instead, Gordon grabbed the jump ball – a violation – then sank a halfcourt shot. What an ironic end.

Cleveland then harmlessly inbounded the ball to seal the win.