The City today posted the Entertainment and Sports Center project (ESC) contracts, agreements, and reports for public review and comment before the City Council’s final vote on Tuesday, May 20.
Materials are available online at http://portal.cityofsacramento.org/Arena/Reports-and-Resources. While the scope and duration for public review exceeds the City’s requirements, it is consistent with the Mayor, Council, and City Manager’s practice of strong transparency and public engagement during the ESC approval process.
Key components of today’s release include:
- Definitive Project Agreements: Legally binding project agreements laying out key details regarding terms and provisions of the 35 year public-private partnership between the Kings and City.
- Finance Agreements: Agreements laying out the City’s plan to issue long-term bonds to finance its share of the project cost.
- Entitlements: Reports outlining key planning, design and environmental review components of the project, including the Final Environmental Impact Report.
The documents follow the overview provided by City staff to the Mayor and Council at the April 22nd Council meeting and honor the Council’s adopted core principles of no new taxes and protection for the General Fund. The total project cost is $477 million. The City’s cash contribution to the ESC will be $223 million and the Kings’ will be $254 million. The Kings will pay a minimum lease payment that starts at $6.5 million and increases to a minimum of $18 million over the course of the lease. Total minimum payments to the City will be approximately $391 million over the life of the 35-year-lease. The City’s will issue lease-revenue bonds to pay its share of the project, which will be repaid with ESC lease payments, parking revenues, hotel tax revenues and other revenue streams created by the new ESC.
The overall vision and fundamentals of the ESC project remain consistent:
- The City and Kings will enter into a transformative public-private partnership to build a new ESC at the Downtown Plaza mall.
- The ESC will be owned by the City and developed and operated by Sacramento Basketball Holdings, LLC.
- The Kings will agree to stay in Sacramento as anchor tenants of the ESC for 35 years.
- The City will make a fixed one-time lump sum investment in the ESC financed primarily via revenues from the Kings lease payments, City’s parking system, and hotel taxes.
- The Kings will cover all additional costs, including cost overruns, predevelopment, capital repairs, and development of City land parcels.
- The Kings and City agree to re-finance the existing Natomas bonds in 2016.
Notable details in the documents include:
- Team’s obligation to pay lease payments beginning at $6.5 million annually and escalating to over $18 million.
- ESC reduces vehicle miles traveled and greenhouse gas emissions compared to the existing facility.
- The ESC will be the first newly constructed LEED Gold NBA arena in the nation.
- Largest private contribution to date to the planned street-car system.
- City’s use of ESC for large civic events free of charge for the City.
Council will review and vote on these materials on May 20th.
Additional information about the project, including background reports, development application and timeline can be found on the ESC website.