Tag Cloud
Friday, February 10, 2012
Council unanimously agrees to begin arena talks with Kamilos
by Kathleen Haley, published on March 16, 2010 at 10:18 PM
Storyline: Arena / City / Kings
Loading images
In a win for Mayor Kevin Johnson and his arena task force, the City Council agreed to start talks with Sacramento developer Gerry Kamilos on a plan to build a new sports and entertainment center in the downtown railyards and develop two other sites.
The City Council’s approval to begin talks with the Kamilos Group was unanimous. While an agreement between the city and Kamilos was not completed Tuesday, the council moved closer to a decision to work with Kamilos.
In Kamilos’ multi-layered plan, the downtown railyards would be the location of a new sports and entertainment center. The plan also calls for the creation of a new state fairgrounds at Arco Arena and nearby property.
Kamilos’ team, which includes developer David Taylor, further plans to purchase the state-owned Cal Expo State Fairgrounds. The development team will would then build a mixed-use development at that location.
The NBA and the Maloofs family, which owns the Sacramento Kings, support Kamilos’ proposal.
Johnson said he would like to see the project to focus on environmentally sound elements so that it could be a “world-class showcase” for a green development.
Meanwhile, Councilwoman Sandy Sheedy said that consultants who work with the city on this project should be paid by the developers, not the city. The city needs to be “very, very careful” if it puts any public funds or public land toward the project, she said.
While Councilman Ray Tretheway voted in favor of starting work with Kamilos, he raised concerns about Natomas. He said he wanted to know how the arena’s move to downtown from Natomas would affect Natomas’ businesses.
The City Council tasked staffers with several assignments Tuesday night. Council members decided that city staffers should start working with the Kamilos group and create benchmarks for the negotiations. The City Council also asked staff to study the financial aspects of linking the Kamilos downtown arena project to a downtown intermodal center.
Council members agreed that Johnson could appoint members of a City Council ad hoc committee to work on the effort.
Staff was also asked to inform the council of progress on creating a six-month agreement with Kamilos, as well as the project’s scope, benchmarks and funding sources. The council asked for that information to be presented within 30 days.
Further, staffers will work on a plan to gain feedback from stakeholders and community groups, Johnson said.
The Kamilos plan will need state legislation to advance. Staff will work on that issue with the development team, the council’s ad hoc committee and additional involved parties, according to the council’s decision.
Kathleen Haley is a staff reporter for The Sacramento Press.
Conversation Express your views,
debate, and be heard with those in your area closest
to the issue.
Leave a Comment
More staff resources will have been wasted in pursuit of this 'thing' that will never be, rather than focusing on something more within the grasp of possibility -- such as creative re-use and renovation of ARCO, which certainly would have been cheaper than the $4 billion the Kamilos plan is now slated at -- and surely will cost more if it ever got off the ground...
The $1 billion NBA plan to build over CalExpo died for lack of interest and wherewithal. Just how is the far more expensive Kamilos three-card monty 'deal' supposed to gain traction???
Kamilos is banking on the acumen of two financial firms whose portfolios are chocked full of heavily leveraged commercial mortgages which will mature over the next two to three years -- and some of their projects will fail -- it's inevitable based on reporting from Deutche Bank and others who are predicting catastrophic declines in asset valuations and performance on debt over the period. Even if all the piece parts are in place (and it's doubtful they will be, especially given legislative action necessary to effect optimal outcomes suitable for this project), it is very well possible that the money to fund this behemoth won't be available come time to build...
All of this, PLUS the financial precariousness of the parties involved -- the Maloofs, leveraged to the hilt on assets that are plummeting in value, having to sell of assets at fire sale prices just to stay afloat; Thomas Enterprises, bankrupt on nearly all of their projects save the Railyards, which is being kept afloat by public funding currently, having laid off 700 of their 750 staff; Kamilos himself, no stranger to 'under water' projects (including his own home); and a host of others involved in this 'insanity', including a mayor who is profoundly unfit to occupy the office he holds, it's just too much for this city to undertake at this time....
We don't need an arena so much as we need to meet basic needs of our citizens, like food and shelter and sane leadership...
But *some* in office have thicker skulls than more rational evolved consideration...
Let's hope a more reasonable approach wins out in the end....
Without question, you criticize the most out of anyone on this site but provide the least amount of viable solutions. Other than..."do nothing." I believe that most people do want the arena downtown and want the Kings to stay. The Kings will be long gone before ANYONE can come up with enough private funds to build an arena. I'm sure San Jose would love to have the Kings, and contribute money to bring them to town.
You also attack people personally.."(including his own home)" Why don't you tell us all about your personal finances?
I'd be willing to bet you have not tried a single private venture in your life. You are way too negative and don't appear to have any regional foresight. I'm not saying this deal is a winner, but an arena downtown is.
Internet article comment bloggers have way too much time on their hands and would not say 10 percent of the things they type in public. Make your VOICE heard, not your keyboard. It's a lot more challenging. HOW DO YOU HAVE TIME TO COMMENT ON EVERY SINGLE ARTICLE ON SACRAMENTO PRESS AND THE SAC BEE????? Amazing.
'Most people'??? I doubt you know 'most people' or even a 'few people' who both want the Kings to stay and/or inhabit a downtown arena that isn't solvent.
Further, I attack no one 'personally' -- Kamilos is a public figure, legally, now that he's stepped out of the shadows to reveal his three-card monty 'deal' for all to see. As such, he is subject to public scrutiny, including mine. That you don't like what I have to say is of no consequence, and your pettiness will not stop exposure of the house of cards upon which this arena 'deal' rests.
By attacking me in your shrill and ill-informed manner, you merely expose your ignorance, especially in boostering this unwarranted taking of public lands to suit private interests via leveraging an overwhelming bet on future value and flawed planning.
Btw, I've been employed by and an equity partner of private interests ALL MY LIFE -- this IS my metier (look it up, bub)...
Obviously you project your own personality when you suppose that internet bloggers have too much time on their hands to express opinions about such matters... And I'm speculating that expository English is not your calling....
Why don't you come up with a better plan or run for office if you are so passionate? Then you'd really have a voice.
And I assume face-to-face charm is not your calling....
Hopefully, the Legislature is.
What happens to the old CC&R that the State signed with the Swanston family that this land remain a park, or revert back to the Swanstons?
Kamilos says this is a $4B project, and will create 4,000 construction jobs. That's $1M/job. Eek. Who thinks that's a good idea?
Anyway, I think this deal is destined to fail, largely because I don't think the State will be interested. The State Fair is already too crowded, and moving to a smaller and hotter location located in a flood plain won't help that. Plus, there won't be enough money raised from the sale of the existing site to build the type of State Fair facility the State will surely envision.
My biggest objection, though, is the TIF, and no matter how you slice it, this is a tax hike put in place to benefit developers ONLY. It puts the general-fund at risk.
Has anyone else read about Cincinnati?
http://www.nytimes.com/2009/12/25/sports/25stadium.html?_r=1
http://www.kingsfans.com/forums/showthread.php?t=34766
http://www.ft.com/cms/s/2/d84a0ba0-2184-11df-830e-00144feab49a,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html
They paint of a picture of a family that might already have negative net worth. For example, the Charlotte Bobcats were recently sold to Michael Jordan for significantly less than the $305M Forbes magazine recently gave the Kings. The balance sheet in that article doesn't show their debts. Remember, MSE borrowed to buy the Kings and still has a $69M loan with the City.
It looks like that loan may be on the verge of being folded into this new project, by the way. If that happens, the $69M would be paid off by "The Convergence" -- in other words, the TIF at Cal Expo. In other words, the original $83.7M loan would be converted into a gift.
Last, the Maloofs claim they'd be paying market prices to lease the new arena. I disagree. Market prices would cover the entire costs of the arena, plus interest, over the life of the loan. If they intend to pay $300M ($10M/year for 30 years) to pay for their share, where does the rest of the money come from? I don't think the bank will be willing to lose $300M+ so they can get their feet wet in North America -- that's the kind of decision that gets executives fired. So where do you think the money comes from?
The TIF, that's where. Taxpayers.
http://www.nytimes.com/2010/03/17/sports/17teams.html
So, we propose to spend $4B to keep a franchise that might be worth $275M? Isn't that like spending $200,000 for a car repair on a car you know is worth $10,000?
And just because we don't like to see public funds wasted on this NEEDLESS project, doesn't make us 'downers' -- it makes you ... to put it politely.... NAIVE...
Local governments get roped into them by fast-talkers, and then you end up just like Cincinnati, when you're forced to cut essential government functions because the developers set up their TIFs so they get paid first.
We have a $100M deficit in Sacramento. We're laying off employees, closing schools, and cutting other areas. So you want to increase our obligations right now?
That's not whining; that's telling the truth. It's not my problem if you can't tell the difference.
Absolutely this city needs 'hope' -- it can come in the form of NEEDED assets, such as sheltering the homeless, or feeding the hungry, or using the infrastructure we already have, rather than wasting $4billions on the ephemeral desires of sportos and other numbskulls who seek a behemoth symbol that causes catastrophic economic failure -- and this arena plan has just enough questionability to do just that...
When it came time to build Raley Field, why didn't they just decide to build out the stadium out in Natomas? It would've been cheaper, & they could've used the existing infrastructure.
I'm assumming they decided not to because the location sucked, compared to the spot on the river in the soon to be developed Bridge District. Now look at Raley Field... It's epic! By far the best attraction for sports fans in the Sacramento Area, with shuttles and 100s of people who walk/ride bikes across the bridge from downtown to the stadium.
Granted, the costs associated with the Arena are way greater, but so are the profits. Seems like a very similar arguement with this arena, only Sacramento has 10X more red tape and 10X more naysayers than West Sacramento.
I guess what I wanted to say is that the model that the City & Kamilos are attempting has worked, & the people of Sacramento love it...
These 'big dig' arena projects don't do anyone any good but team owners and corporate interests that back them. They harbor severe planning and infrastructural issues, but more importantly, their economics simply don't pencil out. And now, with the precarioiusness of the parties involved AND the financial markets upon which this 'deal' is constructed, not to mention the inequitable trades of publicly owned properties at the benefit of private development interests, to reiterate from Dan Walters of the Bee, "this deal is insanity!"....
It is laughable how vacuous the boosters of this 'deal' are and how little they pay attention to the details of this 'deal's' construction... I'm betting many of them are 'under water' as well...
http://www.fieldofschemes.com/news/archives/2010/03/4070_prospective_coy.html
That's a $6-$11M drain on Glendale's general-fund. Remember, that deal started out with the best of intentions; that all the increased sales tax revenues generated by this wonderful new development would more than pay back the City's investment. That's the way all these start out. They started out this way in Indianapolis, Cincinnati, Houston, Oakland... They all started out that way.
Sound familiar?
These deals fail far more frequently than they succeed. I'd feel a lot better about these deals if the boosters were honest. Just come out and tell us, "Look, this is going to cost $10M/year, AND our quality of lives will be enhanced. We don't think $10M spread out over 400,000 people is that bad, but that's the deal. Support us with that much, we stay; don't support us, odds are that we'll leave."
Instead of this FOUR BILLION DOLLAR shell game they insist involves no new taxes (but the documents prove otherwise).
Honesty. What a concept.
1) If you go to the Sacbee site, Click" our region " Scroll down to right below the community box where it says Ongoing Coverage- Arena Issue- Click on it...There's Breton's & Voisin's OP ED pieces displayed as relevant to the discussion...Where's Walter"s article?? Where's O'Connell or Foon Rhee's?...aren't they op ed pieces just like Breton and Voisins's? Somebody doesn't like the message? I wonder what Ms Sills has to say.
2)Failed auction by the state of the Orange County Fair Grounds-56 mill was the highest bidder- 100 to 400% less than the state was hoping for
"March 18, 2010|By Tony Barboza
The state has rejected all seven bids for the Orange County Fairgrounds in its first attempt to sell off state property and landmarks to help reduce California's budget shortfall.
Bids for the 150-acre Costa Mesa site came in far below expectations.
The state auctioned off the property in January but the winning bid, $56.5 million from Newport Beach-based outlet mall developer Craig Realty and partner Dwight Manley, a former sports agent, came in far short of the $96-million to $180-million price range officials had expected."
http://articles.latimes.com/2010/mar/18/local/la-me-oc-fairgrounds18-2010mar18
Add that to the arbitration hearing on that 55 mil city portion of the rail yard.
Otherwise, spend some money that will help the Kings and Sacramento area residents. It costs about $22 million per mile to run light rail track. So the airport line, via the kings stadium, would cost about $300 million with a couple stations.