Politicians seek special enviro deal on arena, Part II

April 4, 2013

By Katy Grimes

This is Part Two of a two-part series. Part one is here.

Sacramento has spent 13 years trying to build a publicly funded sports arena.


Prior to the current deal, the previous deal died only 11 months ago and fell apart largely thanks to Sacramento Mayor Kevin Johnson, City Councilman Rob Fong, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, trying to strong-arm the private owners of the Kings, the Maloof family, into building a new arena.

But last week, the Sacramento city council voted to approve a “non-binding” term sheet on a $448 million arena located in downtown Sacramento at the nearly defunct Downtown Plaza shopping mall. The controversy comes in with the city’s agreement to contribute $258 million, amounting to more than 50 percent of the deal.

Is the city robbing Peter to pay Paul? The term sheet shows that most of the city’s contribution will be accomplished by borrowing against future revenue generated by city-owned downtown parking meters and public parking garages.

Environmental exemptions

The deal was done so swiftly, and mostly behind closed doors, that many important details have yet to be disclosed. The “non-binding” term sheet also is devoid of details.

The term sheet has only a mere mention of the environmental process a new project of this size must go through. It reads:

“The City agrees to expedite the process for obtaining ‘highest and best use’ land-use entitlements (including but not limited to General Plan amendment, Community Plan amendment, rezone, master parcel map, and infrastructure financing plan) consistent with City land-use policies and the goals of the North Natomas Community Plan in anticipation of a sale or development of the land by the Investor Group. The City shall work with the appropriate public agencies to lift the flood plain moratorium as soon as reasonably possible.” 

On March 29, the term sheet was posted on the City of Sacramento’s website. The link now leads to a jumbled page of garbage.

The California Environmental Quality Act has stringent requirements for all new construction, especially projects of this size and scope. The state CEQA website explains:

“CEQA is a statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.” 

Most development proposals in California are subject to the provisions of CEQA. Every development project which requires a discretionary governmental approval will require at least some environmental review pursuant to CEQA, unless an exemption applies.

This “exemption” is where things get sticky.

 CEQA exemption has history

In September 2011, Gov. Jerry Brown signed legislation to “streamline environmental review” for some construction projects.

The two bills claim they will “drive hundreds of millions in economic investment while ensuring all projects meet California Environmental Quality Act (CEQA) criteria,” according to Brown’s website.

Brown signed AB 900, by Assemblywoman Joan Buchanan, D-San Ramon, and Senate President pro Tem Darrell Steinberg, D-Sacramento.  Titled the “Jobs and Economic Improvement Through Environmental Leadership Act of 2011,” the bill establishes an expedited regulatory review for projects designated by the governor as “leadership projects.”

Brown also signed SB 292 by Sen. Alex Padilla, D-Pacoima, “which designates the Farmers Field NFL football stadium as a leadership project subject to a streamlined review that mirrors AB 900.”

The Los Angeles stadium project is operated by the Anschutz Group, which was also involved with previous Sacramento deals.

A football stadium apparently was worthy enough a project to bypass California’s strict environmental regulations.  And Brown’s reasoning was rich:

“Projects like Farmers Field can create thousands of jobs during a tough economic time, so it is imperative for the state to cut the red tape that could delay projects like this for years. These bills strike the right balance between protecting our environment and kick-starting jobs and investment in California.”

According to Brown, under AB 900 these projects are not exempt from CEQA, but will go through a fast-track judicial review process in California’s Court of Appeal.

SB 292 claims to enact “a strict set of criteria for the stadium’s construction, requires the project to be carbon neutral, mitigates impacts on traffic and air quality, and establishes a less onerous review process.”

But what SB 292 did was reduce the time opponents of the stadium project have to object. “The only review timeframe reduced by SB 292 impacts the City of Los Angeles and the developer, who will now have 5 days—rather than 30—to reply to project challengers, who retain the timeframes already laid out by CEQA,” Gov. Brown’s website explained.

And Brown ironically justified signing the legislation saying California has too many regulations.

“The Los Angeles city planning department released a 1,750-page draft environmental impact report last April, with thousands more pages of appendices, analyzing the project’s predicted effects, and listing efforts that AEG says it would take to limit negative impacts,” the Los Angeles Daily News reported. And that report listed an estimated 19,500 new car trips in downtown Los Angeles for game days.

Be wary of ‘jobs, jobs, jobs’

Mayor Johnson claims the Sacramento arena project will create 4,000 jobs. Reported Eye on Sacramento, a public policy watchdog:

“The city’s primary motivations for entering into the arena deal are: (1) to further economic growth and create new jobs; (2) to serve as a catalyst for renewal of the city’s urban core; and (3) to secure the intangible, but very real, symbolic value of preserving and enhancing the city’s reputation and status that comes with having an NBA franchise.

“There is near unanimous agreement among academics who have studied claims that taxpayer-subsidized sports facilities lead to greater local economic growth that such claims are largely baseless.” 

EOS cites a 2008 study, Coates and Humphreys, “Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events,” North American Association of Sports Economists Working Paper Series, Paper No. 08-18, August 2008. EOS says the study demonstrates this:

“There now exists almost twenty years of research on the economic impact of professional sports franchises and facilities on the local economy. The results of this literature are strikingly consistent. No matter what cities or geographic areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.”

“If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark,” University of Chicago economist Allen Sanderson said.

Yet politicians continue to spout platitudes. “This project will create 23,000 jobs for our economy while building the most environmentally advanced stadium in the United States,” Assembly Speaker John Perez, D-Los Angeles, claimed after Brown signed the Los Angeles stadium legislation. “This stadium will be a source of pride for every Californian.”

“There is no more important priority than creating jobs for Californians and growing our economy,” Steinberg added. “These bills will create tens of thousands of new jobs for hardworking people in Los Angeles and throughout our state, while also respecting the quality of life and environment California is famous for around the world.”


Write a comment
  1. Hondo
    Hondo 4 April, 2013, 10:37

    It’s the sports industrial complex out of control. That’s why Rutger’s and Penn state coaching debacles happened. “You’re not part of the team” , ” you’re not being a team player”. All bad things are covered up.
    The facts:
    Sac town has an economy in free fall. Its govt is bankrupt. The state’s economy is the worst in the country and is bankrupt too.
    Seattle has a much bigger market and its economy is much better. And there is Paul Allen from Microsoft, owner of the Seahawks, and worth 20 billion or so, to underwrite the stadium.
    Lets not forget that one of the reasons Stockton went under was a poorly financed and un-needed sports ‘field of dreams’.

    Reply this comment
  2. Steve Mehlman
    Steve Mehlman 4 April, 2013, 18:16

    Wow, Hondo, you stretch the truth like Kareem used to stretch for a rebound. Comparing an attempt to build a new entertainment and sports complex for the capital of our great state to Jerry Sandusky? Your hatred for our state knows no bounds.

    Reply this comment
  3. Sean Morham
    Sean Morham 5 April, 2013, 15:52

    When I found out Sacramento bills out of town folks(insurance) for cost of police/fire to go to accident, I vowed never to go there again. The billing is method to underwrite the disgusting, bloated, underworked Sacramento bureaucracy, police, fire, city officials, public works: the lot of them with their short weeks, fat holiday schedules..
    Gross ferme generale…

    Reply this comment
  4. Publius II
    Publius II 9 April, 2013, 16:29

    Mayor Johnson and all those state legislators are elected Democrats. Constructing a stadium with tax money is a public works project that must satisfy prevailing wage requirements. That means union wages and union labor. Union workers pay union dues from wages provided by tax money. A portion of those dues made possible by tax money is used for political contributions that overwhelmingly go to Democrats. It is easy to understand legislators describing the projects as a “source of pride” and “important priority.” Those projects also are a reminder to taxpayers that we truly do have public financing of political campaigns.

    Reply this comment

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