Who is paying for the new arena? | News
SACRAMENTO, CA - The Sacramento mayor's chief of staff released the cost of building a new entertainment and sports complex on Wednesday.
The total cost is now $390 million: the City of Sacramento will pay $255 million; the Kings and the Maloofs will pay $73 million; AEG, an arena management company, will pay about $60 million. Another $3 million will come from Mayor Kevin Johnson's Brick-by-Brick program.
Most of the city's contributions will come from privatizing the city's parking assets and another $3 million from parking revenue Sacramento County has agreed to share with the city.
The city plans to replace the $9 million it makes in parking revenue by taking the money it makes from the monetization of parking. Eventually, 5 percent ticket surcharges from the new arena will fill that gap.
If the city comes up short of its $255 million, it has little parcels of land it's ready to sell.
The good news for Sacramento Kings fans is that team will be here for a while; they will be signing a 30-year lease with Sacramento.
The city will also re-issue new bonds to retire their old debt on the Power Balance Pavilion, which means they'll be re-doing the loan they already have so they'll have enough cash to make the new arena plan work.
Project cost over-run will be absorbed by Turner Construction, the company assumed to manage the project.
Turner has been working on the project for free thus far, so will have the right of first refusal once bidding begins. If another construction firm enters a lower bid, Turner will have the opportunity to match it.
Finally, the city will eventually earn money once the new arena is operational. Once $10 million is earned in profits, Sacramento will get $1.5 million. The next $5 milllion will earn another $1.5 million for the city, and after that, 50 percent of all profits.
"We feel really good about where we ended up," Mayor's chief of staff Kunal Merchant said. "The average person at home can feel good about this."