Thursday, March 8, 2012

Reason for Hope: An Analysis of the City Council Vote

Last night’s Sacramento City Council vote in favor of the arena was unfortunate, but for opponents of the arena it is important to remember that this is just the beginning of a process that will require a number of additional votes.  It is important to analyze which city council members voted yes and what their reasons are and then examine how their vote can be changed to no.  We only need three votes (or in Think BIG speak “#3Votes”) to put an end to this plan.

Yes Votes (7):  Mayor Kevin Johnson, Angelique Ashby, Rob Fong, Steve Cohn, Jay Schenirer, Bonnie Pannell, Darrell Fong.

No Votes (2): Sandy Sheedy and Kevin McCarty.

Mayor Kevin Johnson, Angelique Ashby and Rob Fong are guaranteed yes votes. 

The only surprise here is Angelique Ashby’s guaranteed yes vote since she represents Natomas, a part of the city that will lose business from arena attendees when the Kings move to a downtown arena.  She previously made statements supporting a remodel of Arco Arena instead of a downtown arena, but the city council discussion made it clear her stance has completely changed.  Maybe the business from arena attendees isn’t as beneficial to Natomas as many from the Natomas business community claimed it was just a year ago. One must wonder what will happen to Natomas when the arena moves, since Natomas was developed to support the needs of the arena.

Steve Cohn, Jay Schenirer, Bonnie Pannell, and Darrell Fong all voted yes but it appeared from their comments that they had some reservations.

Jay Schenirer seemed to be most strongly in favor of the arena despite statements he made when running for city council that he did not believe in public subsidies for a downtown arena.  He acknowledged making those statements but stated that he now believes this is a great investment for the city.  He spoke about the idea of using the parking money for other city needs like schools and parks and stated that doing that would be a one-time investment that will not bring anything to the city and not backfill the general fund, as opposed to building the arena, which is an investment in the city.  He then stated that we [the city] “need to be entrepreneurial here.”  He also, bizarrely, likened the building of a new arena to the expansion to the Crocker Art Museum.  His greatest reservations seemed to be about the sale of parking, but it was not clear what his exact concerns were.  This is where his yes vote will be most vulnerable.
Steve Cohn said that coming into this new arena financing deal he had three concerns: (1) he wanted to make sure the Maloof’s loan on Arco Arena was not forgiven; (2) that there will be no loss of money to the general fund; and (3) that the parking will not be leased for 50-years.  He appeared to believe that the term sheet had allayed all of those concerns.  This leaves his yes vote vulnerable on a number of issues, the Maloof’s financing, the general fund backfill, and the parking lease.

Bonnie Pannell seemed in favor of the arena despite “a lot of risks,” and stated that she believed the arena is an investment in Sacramento’s future.  She did raise some concerns about the parking plan and not wanting Sacramento to end up like Chicago, Detroit or Stockton.  She stated that she was happy that the term sheet stated that the deal would not hurt the general fund but said that she does see a time when she would have to say “no” if the deal does not work out for the city and its residents.  Most of her concerns seemed to revolve around cuts to city services and its effect on residents.

Darrell Fong voted yes, but seemed the most skeptical of all the councilmembers that voted for the plan.  He raised concerns about the location of the intermodal transportation center, cost overruns, the Community Theater, and the 50-year parking lease.  He stated that he would have no problem voting “no” in the future. Darrell Fong seems the most open to persuasion by presenting him with accurate data showing why the arena will not be beneficial to Sacramento.

It appears that the three councilmembers most likely to change their vote are Steve Cohn, Bonnie Pannell and Darrell Fong.  All of them stated that they still had serious concerns about the parking plan and the general fund backfill.  It will be important in the coming months for opponents of the arena to emphasize that selling the parking is a poor decision and will cost the city for a number of years to come. 

It is also important to emphasize the completely speculative nature of the general fund backfill, most importantly the plan to use a 5-percent ticket surcharge to cover approximately 4 million dollars of the projected 9 million in lost revenue to the general fund.  We need to make it clear that there is a real risk that the general fund will not be backfilled if King’s games and other events are not well attended.