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City May Retain Control Of Parking In Arena Deal



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(Sacramento, CA)
Friday, March 02, 2012

City Manager John Shirey says Sacramento would have to create a separate private corporation, and then pay back bonds issued by ….the city. This is an option, even though 11 private companies have already been approved as potential operators.

Shirey expects the city to make $800,000 the first year of the arena's operation.  That would be the city's cut of an $8 million profit. 

SHIREY: "Down the road, but as inflation goes up and everything goes up, we would expect to share in those increased profits."

Under the plan, the city could take 30% of any profits between $10 million-and-$15 million and 50% of any profits exceeding $15 million.

The city parking system currently is worth $9 million per year to the General Fund.  Despite who is running the parking in the future, the city hopes to fill that gap with $1.9 million from the parking lease, $2 million in ticket surcharges and parking from non-Kings events, $2.64 million in ticket surcharges on Kings events, and $1.2 million in possessory interest, sales, property, and user taxes.  The city has a conservative estimate of $1 million in average profits per year and $200,000 in digital signage revenues.  

A new addition to the project is a 1,000 space parking garage to be built by developer David Taylor and the CIM Investment group.   

The Sacramento Kings' new lease would be 30 years.

The City of Sacramento would be able to use the facility for events or conventions free-of-charge an average of once per month.

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