Newest articles on The Sacramento Press tagged as "chris lehane"

Think Big 100-day report: Immigrant investors and parking potential

2011-09-09T05:17:02Z

A federal funding program allowing foreign investors to provide low-interest loans in return for green cards was one potential arena funding source highlighted in the long-awaited Think Big Sacramento Committee report, which was revealed to the public at a Sacramento Press Club luncheon Thursday.

The program, while not a solution in its own right, could buy time, allowing publicly owned land to increase in value for sale at a higher rate, according to officials. Both of those options are parts of the “menu of options” the Think Big Sacramento group was tasked with providing earlier this year.

More than 120 business leaders, a few Kings fans and most of Sacramento’s media gathered for the presentation of the 50-page report detailing financing options to build an entertainment and sports complex in Sacramento’s railyards.

Sacramento Mayor Kevin Johnson and many of the 72 members of the region-wide committee known as Think Big Sacramento, including co-chairs state Senate Pro Tem Darrell Steinberg of Sacramento and State Senator Ted Gaines of Roseville, were present to speak and to hear from arena finance expert Dan Barrett about various ways to build an arena in a challenging economy.

And Barrett had to do that within strict parameters set by the mayor to acknowledge that the public is in no mood for new, broad taxes.

The Nexus Report – so-named because each financing method on the menu has a direct connection to the new complex – identifies three main revenue categories: private investment, public participation and user fees.

Included among the many options discussed in the report are the sale of city property, the introduction of ticket surcharges and public-private partnerships for lease-back payments and private investment money.

None of that is new, though – Think Big has put out one report after another over the past four months describing those aspects of the project.

What was new Thursday was a proposed funding mechanism called EB5 – a federal program that allows foreign investors to provide low-interest loans in return for green cards.

The EB5 program has been around for 20 years, and it has been a successful means of getting up-front investment capital for public projects.

According to the U.S. Department of Citizenship and Immigration Services, the EB5 program is a pathway for an immigrant investor to “gain lawful permanent residence for themselves and their immediate family.”

The program requires a minimum capital investment of $500,000 to $1 million, and the projects funded must “create or preserve 10 full-time jobs for qualifying U.S. workers” within two years.

“EB5 is a mechanism, not a source,” Jackson said. “Its a loan – the money has to be paid back, so it doesn’t really solve the problem.”

But it does buy time.

If the market isn’t quite right to sell public property, EB5 funding can bridge the gap until actual revenues start to flow from what is now being called the Entertainment and Sports Complex, or ESC for short, according to Chris Lehane, Think Big executive director.

“It allows us the flexibility to move forward with the project,” Lehane said.

EB5 funding works something like a “bridge loan” in residential financing: a short-term, low-interest loan that makes money immediately available for initial construction.

“It isn’t a silver bullet,” said Barrett, founder of Barrett Sports Group, a sports management consulting firm. “Multiple revenue streams are still going to be required to make (a new arena) a reality.”

One of those “multiple streams” discussed in Thursday’s report comes from the income potential of parking opportunities in the downtown area.

“The city has a few options (on parking),” Jackson said, “and depending on which way (City Council) decides to go, we could get a good amount of money from it.”

Parking options under consideration include selling the city parking inventory to a private party, or leasing the city’s parking assets to a third party and collecting lease payments.

“A public-private partnership with parking would give us money up front,” Jackson said, “and we could maintain control long-term. That puts less pressure on (the city) having to get bonds to help pay for the (sports) complex.”

Jackson said that, although the specifics of parking revenue options still need to be hammered out, “it does have a lot of potential to help solve funding issues.”

The Think Big Sacramento initiative was launched in June and includes a group of 72 business, community and public leaders from the Sacramento region.

The report released Thursday is the result of the committee researching financing options and gathering support for the project under a self-imposed deadline of 100 days.

Think Big Sacramento has until March to firm up a plan for a new arena or the Sacramento Kings will have another opportunity to file a request with the NBA to relocate the team.

Think Big Sacramento committee members will make a formal presentation to the City Council Sept. 13, setting the stage for the next step toward building a new entertainment sports complex in Sacramento.

“This is an innovative approach to financing a project like this,” said Jeremiah Jackson, Think Big Sacramento project manager.

“Other cities just pass a sales tax and pay for an arena,” Jackson said, “That’s simple, but it doesn’t have a direct connection to the facility.”

If the last attempt to get taxpayers to foot the bill is any indication, it’s not what the public wants, either: In 2006, a quarter-cent sales tax to help pay for an arena was overwhelmingly voted down by Sacramento county voters.

Still, public enthusiasm has remained solidly in favor of a new sports and entertainment complex in Sacramento.

“Five months ago, it was all but certain the Kings would be moving to Anaheim,” Johnson said. “But, the community stepped up and said, ‘We aren’t going to sit on our hands and do nothing.’ ”

Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.

Think BIG committee looks at revenue potential of public assets

2011-07-29T01:59:49Z

Think Big Sacramento committee members met at the West Sacramento City Hall Thursday to review a report identifying publicly owned assets that could potentially increase in value with the development of an entertainment/sports complex.

The “Public Synergies Report,” prepared by the Think Big executive committee, outlined four asset areas with potential for increased revenue: the use of existing parking structures, new billboards and digital signage near the facility, the sale or development of some publicly owned land and the placement of cellular phone towers near the facility.

“We are identifying revenue that would not otherwise exist if not for the development of this facility,” said Think Big Sacramento Executive Director Chris Lehane.

The committee has been exploring ways to fund the new complex using a variety of public and private options, public-private partnerships and the use of new development to leverage the ability to get construction bonds.

“There are 1,900 property assets that the city controls,” Lehane said. “We are specifically looking at 19 or 20 properties that have some real value.”

Lehane said that the properties being considered were selected because of their proximity to the proposed downtown complex site and because they have the greatest overall potential for value increase and creating consistent revenue.

Lehane said the committee is looking at assets that are owned by the city that will increase in value “because of the very fact that the arena will exist downtown.”

Lehane added that maximizing publicly-owned assets such as parking structures, billboards and new cell towers, would not increase costs to the public or have any impact on other funding because revenues would result from increased use – the more cars parking in available spaces, the more money that comes from parking fees paid.

Sen. Ted Gaines (R-Roseville) said that the real focus of discussion for the committee is exploring options without resorting to new taxes or tax increases for the public.

“We don’t want to burden taxpayers throughout the region,” Gaines said. “The question is how to find the sweet spot where (we are) generating enough revenue to justify the bonds to complete the construction.”

Gaines said there is “a lot of solid evidence” indicating that non-tax-related revenue options are possible, and the committee is making it a priority to find them.

Tom Friery, former Sacramento treasurer and head of the Think Big Sacramento finance committee, said the completed financing picture for a new entertainment/sports complex will not be “just one big pie,” but a variety of revenue streams put together to create a sustainable project.

“We’ve looked at eight different revenue sources so far,” Friery said, “and we’ve got seven weeks to go and 49 more (options) to look at. When we finish that, we’ll be focusing on which ones make the most sense.”

In June, the committee released a 37-page report on the expected impact to the region of a new entertainment/sports complex. According to that report, the new complex could draw 3.1 million visitors to the Sacramento area each year and bring the region more than $7 billion over 30 years.

The 72-member Think Big Sacramento committee is about halfway through a 100-day research timeline established in June, during which committee members hope to organize funding options and secure funding sources for the proposed entertainment/sports complex.

The committee is preparing for a March 2012 deadline when Sacramento Kings owners are expected to decide whether to relocate their organization.

Read the “Public Synergies” report here.
Read the previous “Economic Engines” report here.

Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.

Report: Arena could bring $7 billion

2011-07-01T00:43:32Z

A new downtown arena could draw 3.1 million visitors to the central city each year and bring the region more than $7 billion over 30 years, according to a report released Thursday by an arena campaign committee.

The 37-page report on an arena’s expected impact to the region was released to reporters at a press conference at the Sheraton Grand Sacramento Hotel.

"In downtown Sacramento, there's a considerable economic boost, just by the fact that there really isn't a facility like that," said Cathleen Dominico, author of "The Economic Engine Report: An Economic Analysis on the Regional Impact of an Entertainment and Sports Complex," during the press conference.

"If you can create a downtown core that is a destination, it boosts not only the downtown itself but trickles out to the outlying regions," she added.

Dominico, managing partner at Capitol Public Finance Group, was joined at the press conference by arena committee Chairman Chris Lehane, who also chaired the mayor's arena task force; committee members who included City Councilman Rob Fong, City Councilwoman Angelique Ashby, state assemblymen Roger Dickinson and Richard Pan, Downtown Sacramento Partnership Executive Director Michael Ault; and past DSP Chairman Kipp Blewett of Rubicon Partners.

The press conference was held after a report summary was first presented to members of Sacramento Mayor Kevin Johnson's arena campaign committee in a closed-door meeting at the hotel. The meeting was announced two weeks ago as one of seven public meetings set this summer for the committee.

The number of visitors was estimated with an average 17,300 people attending 45 Sacramento Kings events and an average 15,000 people at more than 155 other events annually.

Visitors would be expected to spend an average of $20 each, before and after events, on food, drinks, travel and other retail. About 10 percent of them could spend another $102 to stay overnight.

Total spending outside the sports facility, before and after games and other events, was estimated at $93.6 million annually, according to the economic impact report called for by Johnson.

However, after subtracting spending by existing residents and annual spending at the Kings' current arena, net annual spending in the six-county Sacramento region is expected to total only about $24.6 million, according to Dominico and the report.

The arena's operating costs would be covered by revenue generated inside the arena, according to the report, which did not look at arena revenue.

ICON Venue Group President Tim Romani and Sacramento developer David Taylor estimate an arena facility would cost $241 million, with a total project cost of $387 million.

The cost of arena construction will be financed by a combination of public and private investment, which is expected to include Sacramento Kings annual tenant fees.

The ICON-Taylor group is developing an arena financing plan with input from Johnson's 70-member regional arena campaign committe e. The group was introduced a month ago as the Here We Build coalition. The committee's name was changed this week to Think BIG Sacramento.

The ICON-Taylor group was given a late-May deadline to present an arena financing plan to the Sacramento City Council. But that didn’t happen after the Kings’ owners didn’t provide revenue information in time.

The arena campaign committee was then given until Sept. 8 to provide the council with a plan.

The Maloof family, which owns a majority share of the Kings, agreed on May 2 not to move the team if the region would undertake a serious effort to replace Power Balance Pavilion, which was constructed in outlying Natomas in 1988. The National Basketball Association and the Maloofs gave the region until March 1, 2012, to do so.

The drive to build a new arena also creates an opportunity to redevelop the existing arena, Ault said.

"We feel very strongly that this is not about a downtown versus Natomas issue," Ault said. "This is about an opportunity to activate and engage the central city. It's an opportunity to make sure that we're doing everything we can to develop something that is a replacement in Natomas that keeps them whole.

"This is something I think the region will look back on as we finally are having the right discussions and the right opportunity to really engage in a facility that's going to make a difference in this region," he said.

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Arena coalition studies financing options

2011-06-17T02:06:56Z

The Sacramento region will have to get creative to come up with a public-private financing plan that might work to build a new arena – possibly coming up with funding sources never tried in other cities before, a prominent sports financing expert said Thursday.

Sacramento will need a unique financing model, partly due to the community's "limitations" in size and past efforts to gain voter support for public arena funding, Barrett Sports Group owner Dan Barrett told a crowd gathered for a town hall meeting at the Central Library.

The media market is relatively small, which makes it less lucrative, and there aren't a lot of potential corporate sponsors here. Other challenges come from difficulties getting sports facilities built in California and the lack of more than one sports team tenant for the building, he added.

A regional Here We Build arena coalition has been given until Sept. 8 to come up with a funding plan that appeals to the public and the Maloofs, the Sacramento Kings’ majority owners. The coalition held its first public meeting Thursday.

City Councilman Steve Cohn, a member of the arena coalition, asked whether any successful financing models have been used to build new sports facilities since the recession began.

"There's no cookie-cutter model, unfortunately. You've got to be real creative, particularly in California," Barrett said.

Barrett did not share what new options are being considered. It's "too early in the process" to say what even some of those might be, he said.

The coalition will be working with sports facility gurus, city staff, Mayor Kevin Johnson's arena task force finance subcommittee, the ICON-Taylor Group, the Maloofs and others. At least 65 coalition members and others from the community turned out for the presentation.

Their work follows on the heels of the ICON-Taylor Group, which was given until late May to present financing options as part of a feasibility study. The group told the Sacramento City Council May 26 that it had not been able to include financing in the analysis after the Maloofs didn't turn over financial information soon enough.

Barrett and coalition chair Chris Lehane led a meeting on public-private partnerships to fund arena construction downtown. Barrett explored a range of options that have been used to build facilities in other cities.

Public funding options that have been used include sales tax, hotel tax, rental car tax, food and beverage tax, tax increment financing, land sales, and parking revenues and surcharges.

Private funding options have included equity and cash or facility-related revenue streams such as naming rights, club seats, advertising, sponsorships and corporate investment, he said.

The Maloofs announced earlier this week they have given up controlling interest in the Palms Casino Resort in Las Vegas to private investment firms, Texas-based TPG Capital and Leonard Green & Partners. The Maloofs agreed to turn a $400 million debt into equity by giving up a controlling share in the resort, according to various sources.

The Maloofs did not respond to requests for comment.

On the East Coast, some have used EB-5 money, which trades temporary visas for the financing of American ventures by foreign investors.

Barrett said they don't know if any of those options will be viable in this region.

Broad-based tax increases haven't been used in California. Public financing for sports facilities in this state tend to be targeted taxes, such as hotel or rental car taxes, he said.

The coalition is now trying to identify public funding options that wouldn't require a vote, said former city Treasurer Tom Friery, a member of the coalition's executive committee who helped lead the town hall presentation.

Arenas and stadiums in bigger markets – the Giants' AT&T Park in San Francisco and the Lakers' Staples Center in Los Angeles – have been paid for entirely by sports team owners. That hasn't worked for smaller markets, because the teams don't see as much revenue coming in from media deals and corporate supporters once the facilities are built, Barrett said.

"It's critical to structure a deal that makes sense financially for both parties," Barrett said. "Both parties need to come away with a deal that works."

The Here We Build Coalition and Mayor Kevin Johnson's office will hold public meetings roughly every two weeks throughout the summer. Most meetings will be held at the Central Library, 828 I St., probably at 11 a.m. But exact times and locations are still being determined, according to the arena coalition and the mayor's office.

Economic Impact on Downtown : Thursday, June 30, Time and Location TBD

Regional Impact Event : Thursday, July 14, Time and Location TBD

Leveraging Existing Assets To Create Jobs : Thursday, July 28, Time and Location TBD

Town Hall: The Future of Natomas : Thursday, Aug. 11, Time and Location TBD

Job Opportunities Directly Related to the Project : Thursday, Aug. 25, Time and Location TBD

Release 100 Day Report : Thursday, Sept. 8, Time and Location TBD

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

'Here We Build' arena campaign announced

2011-06-01T00:35:54Z

A regional campaign to finance a new arena officially launched Tuesday.

A coalition called "Here We Build" will work within a tight, 100-day deadline to evaluate what kind of financing mechanisms, fees or taxes might be used. While the list of 60 leaders is still being finalized this week, the coalition is expected to meet for the first time within about two weeks.

The group will be co-chaired by state Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, and State Sen. Ted Gaines, a Republican from Roseville. Steinberg called on the region to unite behind the campaign to boost jobs, economic development and pride in the greater Sacramento area.

"It's time for everyone to get on board," he said in a press conference Tuesday. "It's time after a decade of talk and of work to finally get this done for the future of our great region."

Steinberg, Sacramento Mayor Kevin Johnson and nearly 20 supporters – including Gaines and many others who will serve in the coalition – gathered at the California State Railroad Museum to make the announcement.

The event was held in a cavernous exhibit hall with huge locomotives serving as a backdrop to symbolize the same attitude that built the first transcontinental railroad with Sacramento as the western terminus, Johnson and other speakers said.

Participants will be recruited from throughout the six-county region and represent a range of political, government and business interests on what Steinberg described as a nonpartisan issue.

"This is an issue that brings Democrats and Republicans together. That connects organized labor and business. That brings together the city of Sacramento and the six-county region – because it means something to all of us: Jobs, civic needs and sports, which brings us all together," Steinberg said.

San Francisco political strategist Chris Lehane, who co-chaired a mayoral arena task force, will serve as the entity's executive director. He'll oversee public outreach and organize community forums on the issue.

Regional supporters first gathered on the issue in April during Sacramento's effort to keep the Kings from moving to Anaheim. Those at Tuesday's press conference included Sacramento County Supervisor Phil Serna, Yolo County Supervisor Jimmie Yee, West Sacramento Mayor Christopher Cabaldon, Downtown Sacramento Partnership Executive Director Michael Ault, Pat Fong Kushida from the Sacramento Asian Chamber of Commerce, Willie Pelote of AFSCME International, arena task force co-chair Lina Fat, Sacramento City Councilman Steve Cohn and Sacramento City Councilwoman Angelique Ashby.

On May 2, the Kings' co-owners, the Maloofs, announced they would give Sacramento until next March to make real headway on an effort to build a new arena.

The coalition's task will be to determine within about three months how to fund a new arena in order to keep construction on track for a 2015 completion date presented to the City Council last week.

The coalition will need to identify revenue streams and how much of a public contribution would need to be made, while staying away from any type of general tax increase, Steinberg added later.

Its members will work with an arena development team headed by ICON Venue Group and David Taylor, the National Basketball Association and the Maloofs, Johnson said.

"The clock is ticking," he said. "We know there is a deadline looming of March 1, 2012."

Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

ICON-Taylor team favored to build arena

2011-01-22T01:52:52Z

Sacramento developer David Taylor and a prominent Colorado sports facility developer have been pegged as the top contenders in an effort to build the city a new downtown arena.

Mayor Kevin Johnson's arena task force is recommending city officials work with Taylor and ICON Venue Group to determine if building a sports and entertainment center is feasible now and if they're the right team for the project.

In an analysis released Friday, the task force encouraged the city to give the ICON-Taylor team 90 days to study the viability of such a project and to develop a proposal and financing plan. The team was handpicked by Johnson after another team, which then included Taylor, failed to produce a viable project on schedule last year.

Without a detailed proposal for the task force to consider, the ICON-Taylor team's first-place ranking to build an arena in the downtown railyards was based on its experience and credibility. The team's partnership with the historic railyards' new owner, Inland American Real Estate Trust, was also a factor in the selection, according to the analysis.

"While the lack of a development plan could be considered non-responsive in some circumstances, the (ICON-Taylor) team warrants unique consideration owing to its extensive experience and track record, locally, nationally and globally, in the development of major projects, including events centers, under challenging circumstances," the task force said in its analysis.

Task force co-chair Chris Lehane is scheduled to present the analysis to the Sacramento City Council at its Tuesday night meeting.

The task force is recommending the city manager's office take up to 120 days to determine if the team's proposal demonstrates "a real promise of feasibility" and if the Sacramento Kings owners, the Maloofs, or the NBA will commit to stay in Sacramento and work on an acceptable development agreement.

The task force also recommends the City Council consider entering an exclusive negotiating period with the developers to hammer out a final agreement on the project.

Four teams met the task force's Dec. 30 deadline to submit proposals or indicate interest in developing an arena to replace the Kings' current home, Arco Arena, in Natomas.

Detailed proposals were submitted by the Convergence Team, led by Sacramento developer Gerry Kamilos, and Natomas Entertainment Sports Center Partners, led by Mike Corrick of Nacht & Lewis Architects and Rick Millitello, general manager and executive vice president of Skanska USA Building Inc. of Oakland.

Providing proposals with detailed funding plans seemed to work against them, as the task force used those details to rank the teams lower in the analysis.

Natomas ESC Partners, which was ranked fourth, expressed a concern about how a federal moratorium on development in Natomas might affect their proposal during the task force's fact-finding meetings with development teams last week.

The task force said the proposal doesn’t seem to be in the city’s or region’s best interest economically, when compared to building an arena integrated with downtown's future regional transit center. Also, redevelopment of the Arco Arena site should work without a new arena, the task force said.

The Convergence Team, which won the first shot at developing an arena last year, has simplified its proposal, yet its plan remains the most complex.

A California Exposition and State Fair manager told task force members that Cal Expo officials are reluctant to consider even a scaled-down plan to privately develop part of the existing state fair site to help fund a downtown arena.

"The project’s inherent complications likely render it feasible in theory only," the task force said in its analysis.

The CORE team was ranked second by the task force. The team – led by former arena task force member and president of McClellan Park, Larry Kelley, and entrepreneur Ali Mackani – has made a determination of project viability its priority, like the ICON-Taylor team.

The team includes experienced local players such as Kelley, a notable developer, and real estate attorney Mike Kvarme, another former task force member. But the team is lacking a sports facility developer with ICON's expertise, according to the analysis.

The task force recommends the City Council be asked in 90 to 120 days – late April or late May – whether to enter an exclusive negotiating period with the developers.

On Tuesday, the City Council could make a decision to proceed with one or more of the development teams. Because the team's proposals varied so much in terms of detail, city staff members have outlined a set of submission requirements they'd like the team or teams to turn into the city within 90 days. A preliminary financial plan and a signed concurrence agreement with the Kings are among the requirements.

City staff would then take 60 days to review the proposal or proposals, prepare a staff report and return to the council, possibly in July, for consideration of an exclusive negotiating period, said Assistant City Manager John Dangberg.

Task force weighs four arena teams

2011-01-07T02:45:51Z

An arena task force will use flexibility to analyze a second round of project proposals because there is such a wide range of plans now before them, a task force co-chair said Thursday.

Co-chair Chris Lehane called the proposals to build Sacramento a new sports and entertainment facility "apples and oranges.” Each plan from the four teams has different levels of detail and preparation, ranging from three weeks to more than a year, he said after a public hearing at historic City Hall.

Lehane and member Matt Kelly, executive secretary of the Sacramento-Sierra’s Building & Construction Trades Council, said they appreciated the work Sacramento developer Gerry Kamilos and the Convergence Team put into their proposal last year. Their team was given the first shot at the project, and their effort helped move forward a process that can take years, Lehane said.

But task force member Mark Harris, an infrastructure finance expert, berated Kamilos and the team for asking for more time after failing to make enough progress on their proposed three-way land swap during the exclusive negotiating period they had with the city until late October.

Last year, Harris had called the land-swap proposal a "three-card monte." On Thursday, he sarcastically apologized to "the hustlers and scam artists throughout the world" for having compared them to the development team.

"I'm not only disappointed, but I'm offended that we've wasted so much time with the Convergence group," Harris said, raising his voice.

Standing alone before the task force, Kamilos asked for four more months to work out agreements with Cal Expo, the NBA and the Sacramento Kings owners, the Maloofs, in order to build a $500 million – $550 million project at the downtown railyards. His team was the first to get the NBA and the Maloofs to put a financial agreement to build a new arena on the table in 10 years, Kamilos said.

"I take offense to the fact that you choose not to recognize all these elements that have been accomplished in the last year and that have never been made in this city before," he said.

The Convergence presentation and a question-and-answer session with task force members dominated nearly half of a hearing that ran more than two hours.

Kamilos is no longer partnering with another Sacramento developer, David Taylor, who was a member of the Convergence Team until they didn't produce a viable proposal on deadline. Taylor said he joined ICON Venue Group and other members of a team hand-picked by the mayor three weeks ago because he felt they needed to simplify the project and bring in expertise he hadn't seen yet.

Taylor gave a presentation with Tim Romani, president and chief executive officer of Colorado-based ICON.

ICON has managed more arena and stadium development projects worldwide than any other firm. Romani counseled the task force against continuing with the competition Johnson established by putting out a public call for proposals, first in late 2009 and again in late 2010, and appointing the task force. He said leaders should be collaborating to build an arena.

"I don't believe a competing process is going to get you where you need to go," he said. "The collaborative process of all the business leaders, along with the city and the team, is what it's going to take to make this happen."

Presentations were also given by the CORE team, led by entrepreneur Ali Mackani and McClellan Park President Larry Kelley, and by Natomas Entertainment Sports Center Partners, led by Mike Corrick of Nacht & Lewis Architects and Rick Millitello, general manager and executive vice president of Skanska USA Building Inc. of Oakland. Natomas ESC Partners is the only team proposing a plan for the existing Arco Arena site.

The teams focused on the need to determine funding plans, their individual expertise and how soon they could present development and funding plans to the city. All four recognized the need for a public-private partnership on funding, which they said could take several forms except for any type of tax increase.

“There’s no way in hell that this project is going to get done without public help,” Taylor told the task force.

The CORE team and the ICON-Taylor team have no financing plans yet. The Convergence Team and Natomas ESC Partners have detailed finance plans, but questions remain for both.

Romani said the ICON-Taylor team could tell the city whether they can take on the project and how they'd develop and finance it within three months. The CORE team asked for six months to work with city on a financing plan.

The task force will release an analysis of the concepts Jan. 21. The four proposals may be ranked in order of preference, but that's still being determined, Lehane said.

Over the next two weeks, subgroups of the task force will meet with each of the four teams at least once but possibly several times to get more specifics about the teams' expertise and plans.

Task force members advised Natomas ESC Partners to create a more individualized funding plan with several financial models to offer the Maloofs more flexibility, and to flesh out their argument that keeping the arena in Natomas fits with the city's 2030 General Plan and plans for economic growth and increasing jobs.

The task force will present a report on the proposals to the City Council Jan. 25.

Johnson didn't attend the hearing, but he issued a statement later.

"The competition is great for the city, because it gives us more options and ensures we move forward from a position of strength," he said in a prepared statement sent by e-mail. "The public hearing is a great step forward, but we all know these types of deals are not easy – even in the best of times. I look forward to reading their upcoming analysis along with my council colleagues at the end of the month."

Photo 1 of arena task force member Mark Harris and Photo 2 of developer Gerry Kamilos by Brandon Darnell. Photo 3 of Convergence Team lead counsel Chuck Trainor speaking and Don Johnson of Kamilos Co., seated, by Suzanne Hurt, a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt.

Task force spots flaws in arena proposals

2010-02-19T06:21:22Z

Mayor Kevin Johnson’s volunteer task force on Thursday continued its second session of challenging proposals presented by prospective developers of a new arena in Sacramento.

The 12-member task force heard presentations from Thomas Enterprises, the Kamilos Group, Natomas ESC Partners and Tripp Development. The prospective developers explained their financing plans, among other issues.

Task force member Mike Kvarme asked how much of Thomas Enterprises’ project financing would rely on obtaining federal funding.

“It’s a large part of it,” said Suheil Totah, vice president of Thomas Enterprises.

Totah also commented on the site’s location at the railyards in Downtown. Thomas Enterprises is developing the railyards.

“I think the NBA sees this as the right location in order to maximize funding for the actual team itself,” Totah said.

After the presentation from Thomas Enterprises, the Kamilos Group made its pitch to the task force. Gerry Kamilos’ proposal has the backing of the NBA, the Maloofs and developer David Taylor.

In Kamilos’ plan, the Downtown railyards will be the site of a 19,000-seat sports and entertainment arena. In a second part of the plan, a new fairgrounds would be built at Arco Arena and on nearby land.

John Moag, a consultant for the NBA working with Kamilos, last month explained a third part of the proposal. For that part, Kamilos' development team intends to purchase the California Exposition & State Fair from the state. A mixed-use residential development would be built at the Cal Expo site. Funds from the new development would help finance the arena Kamilos plans to build at the railyards Downtown, Moag said.

Taylor said he felt that the commitment from the NBA and the Maloof family was “huge.” The Maloofs own the Sacramento Kings.

But task force member Ron Tom said that many Natomas residents have told him they don’t want a new fairgrounds to be built in their neighborhood.

“Our team is very experienced with sitting and listening,” Kamilos said.

One piece of the project’s financing would come from people who own property at the Cal Expo property, Kamilos said. He explained that property owners at that location would pay an annual assessment.

The mechanism to assess the property owners at the Cal Expo property would require approval by the state Legislature.

Kamilos said there is a possibility that the legislation could go into a “spot bill,” which is a way to move legislation into an existing bill.

The Natomas ESC Partners followed Kamilos’ presentation with a pitch to create an arena next to the current Arco Arena site in Natomas.

Rick Millitello, an executive vice president for Skanska Builders, indicated that Magic Johnson’s company may work with Natomas ESC Partners on the project.

Skansa has been in a relationship with Magic Johnson Enterprises for more than two years, Millitello said. “Specifically, Magic helps bring us a more robust, diversity involvement into the projects that really helps our diversity program.”

On a separate note, Larry Kelley, a task force member and former owner of the Sacramento Kings, told ESC Partners that their financing plan involves millions of dollars in costs to the Maloofs that are not affordable. "I can just tell you, as a previous owner of the Kings, they're broke," Kelley said.

Tripp Development made the final presentation Thursday. Rick Tripp proposed to build a new complex Downtown that would be paid by funds from real estate agents and brokers. The real estate agents would dedicate their commissions to financing the complex, he said.

The agents would then be investors in the arena, Tripp said.

Task force member Chris Lehane complimented Tripp on thinking “out-of-the-box.”

Staff Reporter Suzanne Hurt contributed to this story. Kathleen Haley is a staff reporter for The Sacramento Press.

Task force questions prospective arena developers

2010-02-18T06:59:14Z

Prospective developers for a new sports and entertainment complex were questioned by Mayor Kevin Johnson’s volunteer task force Wednesday night.

The 12-member task force, which includes real estate, finance and communications executives, asked numerous follow-up questions after listening to presentations by Matt Haines, Doug Tatara and Ali Mackani.

Haines, who owns Bistro 33 in Midtown, told the task force about his proposal to build the complex in downtown’s Docks Area. “This would be a direct front-door” to Old Sacramento, he said.

Old Sacramento is north of the proposed area.

Task force project coordinator Matt Massari wrote earlier that Haines’ Docks Area project would be “adjacent to the central business district defined on the north by Capitol Mall, on the east by the I-5 freeway, on the south by Broadway and on the west by the Sacramento River.”

Haines proposed to finance the project by selling seats at the complex.

Task force member Mark Harris called Haines’ ideas "great," but said Haines had not figured out every detail on how to finance his proposed project.

Tatara took the floor after Haines. He pitched a project that would include an arena, theme park and monorail at Cal Expo.

He suggested that the theme park would finance the project. “This visitor-generation goal is important for the purpose of attracting corporate equity marketing sponsors who will finance the project.”

Task force member Tom Friery asked Tatara if he had discussed his proposal with the state, which owns Cal Expo.

“I have not,” Tatara said. “Again, you have to understand that I’ve been working behind the scenes on this for 18 months because Cal Expo wouldn’t talk to me.”

Mackani made the final presentation. He proposed building the entertainment and sports center in the Westfield Downtown Plaza. “We have a line item in our budget -- to buy Westfield,” Mackani said.

He said the project's budget would be $500 million: debt financing would be $200 million; equity partners would provide $100 million; private placement would be $100 million; and the city would invest $100 million.

Friery noted that the task force was told not to consider city funding. But task force co-chairman Chris Lehane indicated that Mackani’s idea for city funding might not violate the panel's principles because it was not related to a “broad-based tax.”

The task force is researching seven private-sector proposals and two other plans: remodeling Arco Arena and building an arena at Cal Expo.

Task force members will meet again Thursday to hear from the remaining prospective developers. The public meeting will be held from 10 a.m. to noon at the Natomas Holiday Inn on Advantage Way.

The panel's recommendations will be delivered to the City Council.

Kathleen Haley is a staff reporter for The Sacramento Press.

Arena task force begins reviewing proposals

2010-02-05T06:21:55Z

Sacramento Mayor Kevin Johnson's arena task force will focus on giving all proposals a fair hearing over the next four weeks, an arena team leader said Thursday.

Four task force subcommittees on finance, transportation, site evaluation, and business and community impact will collect more detailed information from the development teams that have pitched seven arena options. The subcommittees will also consider renovating Arco Arena, the current home of the Kings, and a previous proposal to build at Cal Expo, said Chris Lehane, co-chair of the Sacramento First Task Force.

Subcommittee work will not be public. The information gathered will be used to create a scoring matrix to weigh the proposals, and the scoring matrix will be released to the public, he said.

"We're going to be kicking the tires pretty hard on this," he said at a press conference Thursday at the Citizen Hotel.

Lehane unveiled eight priorities created during the task force's first phase that will be used during the evaluation process:

• No Direct Taxes: Other potential revenue sources, including tax increment financing and fees on "tourists," will be considered;
• Economic Impact: Speedy creation of work for local construction companies and construction jobs and long-term economic benefits;
• Full Loan Repayment: Maloofs must address their outstanding $68.5 million city loan by paying it back in a lump sum or payments, through equity in a new facility or in another way;
• Regional Contribution: Financial contribution to construction costs, possibly through event ticket fees but not likely to come from surrounding towns or the county;
• Community Benefits: Could include a labor agreement, affordable housing, environmentally sensitive construction, cultural contributions and more;
• Minimize Environmental Impacts, partly with a focus on public transit;
• Fair Share for Use of City Land: "Given that the NBA and/or the Kings will likely seek a controlling interest in the facility, any facility developed as a true public-private partnership ... must ensure that the team/league pays its fair share," determined by the level of public support, according to a document Lehane provided outlining the priorities. The amount the public is compensated must be adjusted for inflation, Lehane said.
• No funding from the city's general fund.

Lehane would not respond to reports that the National Basketball Association is upset about comments he made on the task force blog Tuesday. He called the NBA's previous attempts to get an arena built here "two air balls" and made other comments in a post asserting that the NBA's support for one arena proposal doesn't guarantee that plan will be adopted by the task force or the city.

Several Sacramento City Council members were also upset about the comments and felt he was speaking on behalf of the city.

"Maybe I should have said 'two fumbles.' Maybe I should have said 'two strikes.' But I said 'airballs,' " he said Thursday.

Lehane also said he recognizes the task force is a group of "citizens" attempting to represent the public in an effort to get an arena built as quickly as possible.

"We're not the City Council," he said.

While Lehane lives in San Francisco and another task force member lives in Los Angeles, nine others live in Sacramento and the other member lives in Stockton, he said.

Lehane said he was recruited to the task force because he has no pre-existing relationships in Sacramento or any vested interest in a particular outcome.

"That allows me to ask the tough questions," he said.

Councilmembers, NBA upset over arena task force comments

2010-02-04T05:53:04Z

Sacramento City Council members and the National Basketball Association are angry or unhappy with comments made Tuesday by the mayor's arena team leader.

Several council members are upset after Sacramento First Task Force co-chair Chris Lehane seemed to be speaking on behalf of the city when he called the NBA's previous attempts to get an arena built here "air balls" and made other comments on the organization's website blog Tuesday morning.

Council members Ray Tretheway and Rob Fong responded to Lehane's comments at the end of Tuesday night's City Council meeting.

"I was terribly embarrassed by the disrespectful message that publicly humiliated the commissioner of basketball that came out of Sacramento First," said Tretheway, whose district includes Downtown, proposed as one potential location for a new arena. "The NBA officially has been a great partner with the city — a longtime partner."

At least two other council members privately said they were upset over the comments, he added Wednesday.

NBA Commissioner David Stern and consultant John Moag, who owns the sports investment banking firm Moag & Co., spent two years working on a plan to build the new arena at Cal Expo. Three weeks ago, Moag and Stern, together with the Maloofs and local developers, pitched a new plan to build the arena in the Downtown railyards.

Mayor Kevin Johnson, once an NBA star, formed the volunteer task force three months ago to expedite development of a new arena to spur the city's economic growth — which he has identified as top priorities. Johnson has said he'd like the arena built Downtown and that the railyards would be one possible site. While playing for the Phoenix Suns, he saw Phoenix get revitalized after he helped bring an arena to that city's downtown.

Johnson recruited task force co-chair Lehane, a San Francisco political and public relations strategist who was dubbed one of the "masters of disaster" for his work controlling damage during President Bill Clinton's administration. Lehane is volunteering on the task force, as are 11 others, who work in business, finance, politics, development and labor.

Tuesday night, Fong said the task force's efforts should not be disregarded. However, he, Tretheway and other council members don't like the way Lehane's comments seemed to be representing the official city position.

“I do think lines get crossed when they pretend to speak for the city of Sacramento because it is a volunteer effort," Fong said. “If at some point, if the city of Sacramento is to be the lead agency, so to speak, on arena efforts, then it really should be the city of Sacramento that’s speaking on its own behalf.”

Lehane is expected to discuss the start of the task force's four-week proposal-review process at a press conference at 11 a.m. Thursday at the Citizen Hotel, 926 J St.

His comments that upset council members were made Tuesday in a blog post, where he explained the NBA's support for one of seven Sacramento arena proposals doesn't guarantee that plan will be adopted by the task force or the city.

The NBA and other development teams have been "lobbying public officials" and "putting out their spin." But the sports and entertainment center task force is just starting to evaluate the proposals and doesn't want to "give the public the bum's rush," Lehane blogged.

“Since 2006, the NBA has ‘endorsed’ two other proposals that never came to fruition. Just because a deal may sound like a lay-up to the NBA doesn't mean it is a finger roll for Sacramento," he wrote. “Despite well-meaning work over the years, the NBA has shot two air balls in its past efforts — the city needs to make sure that this process results in a slam dunk for the public.”

Lehane's comments were later released to reporters. On Tuesday, Tretheway and Fong spoke to NBA representatives, including someone working for Moag. Those representatives "confirmed how upset the NBA was," Tretheway said.

The NBA and Moag did not wish to respond publicly to Lehane's comments.

"We're not going to comment," said Karen Skelton of the Boston-based public relations firm Dewey Square Group, which represents Moag and the NBA.

Johnson didn't respond to Tretheway's and Fong's concerns at the council meeting. Earlier that day, neither he nor his staff would discuss Lehane's comments or any lobbying that has been going on.

But Jeremiah Jackson, a task force project coordinator, said lobbying on behalf of certain proposals won't change the arena team's mission as the task force begins weighing all the proposals.

"We know the NBA will support a deal that works for them," he said. "But we want to make sure Sacramento gets behind a deal that works for us."

The NBA is a partner in a plan spearheaded by developer Gerry Kamilos. The NBA and Moag are negotiating on behalf of the Maloofs, who own the Sacramento Kings franchise and its current home, Arco Arena.

The plan proposes building a 19,000-seat sports and entertainment arena at the Downtown railyards on land donated by the city. That project would be financed in part by the group's ability to buy Cal Expo and developing a mixed-use, master-planned neighborhood there, Moag said. The group also proposes the city and the Maloofs turn Arco Arena and the adjacent land over to the state for the new fairgrounds, and that the city forgive a $68.5 million loan to the Maloofs.

Tuesday night, council members directed the city manager's office to draft a letter for the council "to reaffirm how much we value the partnership and long-time support of the NBA to have an NBA team in Sacramento," Tretheway said Wednesday.

Development teams will make half-hour presentations to the task force in two weeks. The task force is expected to make recommendations to the mayor on March 11.

Vote for your preferred location for a sports and entertainment arena at sacramentofirst.org.

Suzanne Hurt is a staff reporter for the Sacramento Press. Sacramento Press reporter Kathleen Haley contributed to this report.

Town Hall on arena ideas draws 80 people

2009-12-04T05:58:21Z

About 80 people turned out for a town hall meeting Thursday night to weigh in on plans for a new entertainment and sports complex. Business leaders and residents presented their ideas to Mayor Kevin Johnson’s "Sacramento First" arena task force at the Sacramento Public Library downtown.

The task force is assigned to analyze developers’ ideas for the complex. The 12-member group includes real estate, finance and communications executives. Task force members are not paid.

Johnson told the audience a new complex needs to generate jobs. “We’ve got to create jobs; we’ve got a down economy,” he said.

Chris Lehane, the task force’s co-chairman, echoed that point. “This is about economic development for the city of Sacramento,” he said. “This is about jobs.”

Michael Ault, executive director of the Downtown Sacramento Partnership, pushed for downtown as the site of an entertainment and sports center. A downtown location could encourage people to walk to the arena, he said, which would take people out of their cars.

“We do believe that now is the time and downtown is the location,” Ault said.

Steve Hammond, chief executive of the Sacramento Convention & Visitors Bureau, also urged the task force to consider putting the center downtown. That would help the bureau attract about 17,000 conventioneers, he said. Right now, It's difficult now for the bureau to bring in those large conventions because the arena is far from hotels, Ault said.

Meanwhile, Noel Martin, the president of the Natomas Chamber of Commerce, asked the task force to select Natomas for the center. He said many Natomas businesses support the idea of a new arena at the ARCO Arena site. “When it comes to location, we feel the Natomas area is superior to all other sites,” he said. The land is available at that site for redevelopment, he added.

Ed Wiggins, a Sacramento small business owner, said he favored putting a new entertainment and sports center on K Street. “The K Street corridor from the mall to the Convention Center is really important,” he said.

Lehane said recently that the task force expects to make its recommendations to the City Council in mid-March.

Kathleen Haley is a staff reporter for The Sacramento Press.

Public can address mayor's task force on arena

2009-11-20T05:47:44Z

Citizens will get to present their views about a proposal for a new arena and entertainment center to Mayor Kevin Johnson’s task force, the mayor said. His remarks came at a news conference Johnson held Thursday in Old Sacramento to introduce the panel’s members.

Community feedback will be part of the review process before the task force makes its recommendations to the City Council, he said.

The 12-member task force is tentatively planning to hold public meetings on the first and third Thursdays of each month, said Chris Lehane, task force co-chairman and partner in Fabiani & Lehane, a public relations firm. The task force includes real estate, finance, and communications executives. Public meetings may begin in December, he said, adding, “We’re really looking for feedback and information from the community.”

Lehane said the task force expects to make its recommendations to the City Council in mid-March. 

Johnson has tied building an arena and entertainment complex to making Sacramento a “world-class city.”

The task force will analyze developers' ideas for the complex. Members, who come from a wide range of professions, are not paid.

Co-chair Chris Lehane was the Special Assistant Counsel to President Bill Clinton from 1995 to 1997. Restaurateur Lina Fat is the other co-chair.

Other members include land development executive Dea Spanos Berberian; former city treasurer Tom Friery, infrastructure finance executive Mark Harris; local union leader Matt Kelly, sports facility designer Dan Meis, former aide to Gov. Schwarzenegger Adam Mendelsohn and lobbyist Ron Tom.

Photo by Anthony Bento.

Kathleen Haley is a staff reporter for The Sacramento Press.