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Four teams vie for arena project

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A team handpicked by Mayor Kevin Johnson and led by Sacramento developer David Taylor and national sports facility builders has emerged as one of the frontrunners to develop a new arena.

Taylor quietly ended his partnership with developer Gerry Kamilos after their first proposal, a complicated land swap, didn't produce a viable proposal by its October deadline. Taylor is now partnering with the historic railyards' new owner, Inland Real Estate Group of Companies, and others. On Thursday, his group submitted a letter of interest to Johnson's arena task force briefly outlining a proposed process for developing a sports and entertainment center.

Another three teams submitted new or modified arena proposals by a noon deadline Thursday. This time, none of the teams have the backing of the National Basketball Association or the Maloof family, which owns the Sacramento Kings.

The other candidates were among the seven original teams that submitted arena proposals last year. They include the Sacramento Convergence team led by Kamilos; the CORE team led by entrepreneur Ali Mackani and two former arena task force members, real estate attorney Mike Kvarme and developer Larry Kelley, president of McClellan Park; and Natomas Entertainment Sports Center Partners, the only team proposing a plan for the existing Arco Arena site.

The NBA has also ended its partnership with the Convergence team after endorsing that plan in January 2010 during a bold press conference across from City Hall.

"The NBA is not backing any one of the arena initiatives, and we will have no further comment at this time," NBA spokesman Mike Bass said in an e-mail to The Sacramento Press Thursday.

The Maloofs have been trying to get an arena built to replace Arco for 11 years. But the family isn't joining any teams in the current effort to get a new arena built. Johnson, a former NBA player, is leading the effort and will brief the Maloofs on the second round of ideas once he gets the proposals, Kings spokesman Mitch Germann said.

"The Maloofs aren't tied to any of the groups that are giving presentations," Germann said. "They're excited to see the proposals that come as a result of this."

Johnson put out a call for proposals late last year, then put together a task force to analyze the proposals. The mayor reconvened the task force in November and put out a call for a second round of new or updated proposals.

The players left in the game are teaming up with national firms that have substantial experience developing, designing and building stadiums and arenas for professional football, baseball and basketball teams.

Taylor has joined a team put together by the mayor that includes Inland, which owns the land adjacent to city property where some teams have proposed a new arena be built; Populous, a global sports architecture firm based in Kansas City, Mo.; New York-based Turner Construction; former arena task force member Dan Meis, who designed the Staples Center in Los Angeles; and ICON Venue, an owner's representative company whose website says it specializes in delivering home venues for pro sports teams. ICON’s projects have included Denver's Pepsi Center and the Chicago White Sox's new Comiskey Park, named US Cellular Field.

Taylor said Johnson contacted him about joining a new team after he left the Sacramento Convergence team.

"I felt the prior effort was not going to have the legs I would have liked it to have," Taylor said. "After being asked to look at this other team and talking to them at length, I was convinced it made sense to give it another try."

The ICON-Taylor team would focus on identifying strategies to finance an integrated arena and regional transit center in the railyards. The team offered to refine designs, present cost and revenue information and develop a conceptual approach for the project by April.

Sacramento Convergence Team
In a letter submitted to the task force Thursday, Kamilos and his team have altered their original proposal, but key elements remain. The team still proposes to build the arena on city railyards land and the Maloofs would operate the facility under a 30-year lease. The plan would still require state legislation to move forward.

But the team's proposed real estate deal has been simplified somewhat, and the price tag for the "Downtown Events Center" has been cut from $400 million to $350 million. Developers also propose buying an adjacent two to six acres from Inland to accommodate parking and a hotel, retail and dining adjacent to the arena and the future regional transit center, Kamilos said.

However, the team now proposes working with the California Exposition and State Fair board to build new fairgrounds at the existing state fair site and to privately develop 125 acres for destination retail, dining and entertainment and other mixed use, including residential and possibly office. State fair operations would remain with the Cal Expo board, but other events at the site would be run privately by VisionMaker Worldwide, a member of the Convergence Team.

The plan would also redevelop the 184-acre site containing Arco Arena in Natomas for mixed use. The arena would be retooled and existing parking would remain.

Under the plan, the Maloofs would share parking revenue and possibly a ticket fee. The Maloofs would operate the arena and collect revenue from facility rentals. The developers would assume the Maloofs’ $67 million Arco Arena debt and pay it off under the current schedule over 17 more years.

"It's essential in a small market that the facility is operated by the team ownership, especially in these times, in order for teams to break even on a cash flow basis," Kamilos said.

The Convergence team has added new members, including AECOM; Hunt Construction Group, which is building the Barclays Center in Brooklyn; Tutor Perini Corp., which has built sports centers and regional transit facilities; and POSCO Engineering & Construction. The group expects to finish a project analysis by May, which would allow construction to begin in 2013 and the new arena to open in summer 2015, according to the letter.

The CORE team – chosen by the task force as one of the top three candidates last spring – has altered its proposal by adding the railyards as a second possible location for an arena and recruiting Kelley, a former Kings owner, to lead the effort. The team also added Kvarme and his law firm, Weintraub Genshlea Chediak. Kelley and Kvarme were key players in one of the country's biggest infill developments and public/private partnerships involving redevelopment of McClellan Air Force Base.

The team continues to offer Westfield Downtown Plaza as another viable location and met briefly with representatives of Westfield and the Maloofs to discuss whether they might be able to work together on the project. The response was positive, but more information must still be gathered to create a workable financing plan under a public/private partnership, Mackani said.

The team will seek assistance from consultants such as Flintco, which has worked on such projects as the FedEx Forum in Memphis, Tenn., he added.

"But at the end of the day, it's about how to fund a project like this. Not how to build it," Mackani said. "That's where our focus is going to be."

Natomas ESC Partners
Natomas ESC Partners didn't make any significant changes to its proposal, but resubmitted it after getting Johnson's assurance it would be reconsidered, said team member Mike Corrick of Nacht & Lewis Architects in Sacramento.

The plan proposes building a $410.6 million, 950,000-square-foot sports and entertainment complex on 100 acres of city-owned land just north of Arco Arena. Arco would become a science park, possibly containing a science museum. Developers would also add a wetlands greenbelt, 250,000-square-foot office park, a spa hotel, retail and housing built in phases to the site.

The team includes Wisconsin-based Hammes Company, which developed the $1.6 billion New Meadowlands stadium that opened in April for the New York Giants and the New York Jets; Skanska, the construction firm that built New Meadowlands; NBBJ, a Seattle firm that built the Staples Center in Los Angeles and six other arenas or stadiums; municipal financing expert Jeff Baize of Brookhurst Development Corp.; and Nacht & Lewis Architects.

The project would be funded by Citigroup issuing taxable bonds that would be repaid over 25 years through the Kings' $10 million annual lease of the property, 50 percent of game day ticket revenues totaling $25.4 million a year, new naming rights, parking fees, facility rental and other revenue. The city would provide the land.

"We thought we had a very viable plan for the Natomas property and we had a very qualified team and a feasible financing plan," Corrick said.

In an e-mailed statement, Johnson said he recognizes developing the project will be challenging, especially in such a tough economy. But the four teams now vying for the project have substantial track records, he said.

"The game is now on," he said in the statement. "And these four different teams will compete with one another and the people of Sacramento, who care about jobs, will be the real winners of this competition."

The arena task force released the four project concepts shortly before 4:30 p.m. A public hearing is set for 10 a.m. Jan. 6 at historic City Hall. The task force will release an analysis of the concepts on Jan. 21, prior to a Sacramento City Council discussion Jan. 25.

In the end, the winning proposal will be the one with the best financing plan, Corrick said.

"It'll be interesting to see what comes out of this round," he said. 

Graphic 1 provided by the ICON-Taylor team. Photo of Gerry Kamilos by Suzanne Hurt. Graphic 2 provided by the CORE Team. Graphic 3 provided by Natomas ESC Partners. Suzanne Hurt is a staff reporter for The Sacramento Press. Follow her on Twitter @SuzanneHurt. 

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