Economic Development

Sacramento's Net Gain?

Ex NBA-player Mayor Kevin Johnson has an unorthodox plan to build a new basketball arena.
by | June 2010

For years, Sacramento, Calif., has been flummoxed over how to build a new basketball arena without breaking the bank. If there's anyone who would seem to have the right background to get the job done, though, it's the city's mayor.

That would be Kevin Johnson, a standout point guard for the Phoenix Suns in the 1990s and a Sacramento native. He was elected mayor in 2008.

Johnson didn't run for office focusing on basketball. But the failings of Arco Arena, where the Sacramento Kings play, made the subject unavoidable. It's the oldest and smallest arena in the National Basketball Association (NBA) and lacks lucrative luxury boxes. The arena's location far from the city's center also has limited its value as an economic development tool. In 2009, college basketball officials rejected Arco as a site for future tournament games, intensifying calls for a replacement.

As with all stadium and arena projects, the trouble is paying for it. At the polls in 2006, Sacramento County voters overwhelmingly rejected a plan to raise the sales tax to fund a new arena. The city faces a large budget shortfall, and California, with its daunting fiscal problems, is in no position to help.

As a result, Johnson has turned to an unorthodox, complicated plan. With his support, the Sacramento City Council voted unanimously to negotiate with a developer who wants to facilitate a three-way land swap to help fund the arena. The city would offer land near Arco as a new location for the state fairgrounds. The fair's current location would be sold to a developer, with the proceeds used to fund a new arena.

If all goes according to plan, the arena would anchor a massive new downtown development on a brownfield site where Sacramento's railyards used to be. The development would mix an intermodal transportation hub with shopping, restaurants, offices and 12,000 new residential units. It would double the size of Sacramento's downtown and perhaps alter the city's reputation as a sleepy home for state office buildings.

For now, that vision remains far off. The fair's governing board and the California Legislature both would have to agree to the plan. Whether financing for the plan will add up remains in doubt. Still, after years of false starts, the city has a plan that it, the Kings and the NBA all support.

Insiders say Johnson's good relationship with league officials helped move the deal along, but the three-time NBA all-star also has emphasized that keeping the Kings isn't really about basketball. "His worry has been that he doesn't want to lose an asset that creates jobs and brings attention to the city," says R.E. Graswich, a special assistant to the mayor. "He goes to the games and has a good relationship with the team, but he's moved on. It's really an economic question."

Josh Goodman
Josh Goodman  |  Former Staff Writer

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