STOP and Voters for a Fair Arena Deal said they filed the lawsuit against Sacramento City Council, the Sacramento city clerk,  and the city of Sacramento city over a decision to disqualify thousands of petitions that would have put the issue to a public vote on the June 3 ballot — a move many describe as government tyranny.

Jan. 24, the Sacramento city clerk announced that she rejected the petitions, along with 34,000 signatures, on the grounds some of the petition versions did not comply with election code.

“This is not a small number of people,” said Craig Powell, representing Voters for a Fair Arena Deal. “This is a significant contingent of Sacramento voters who’ve said ‘Let us vote.'”

Almost immediately after the announcement of the lawsuit, local Sacramento media reported the lawsuit is “by the group that doesn’t want the arena built.”

STOP and Voters for a Fair Arena Deal have said throughout the battle with the city, they are not opposed to an arena, and in fact are supportive of refurbishing the existing arena, or building a new one; they want the public subsidy of the arena project to be decided on by the voters of the city of Sacramento.

The attorney for STOP and VFAD said the errors the city clerk cited weren’t substantial enough to warrant disregarding 23,000 signatures, KCRA reported. “Nobody can claim they didn’t know what they were signing,” STOP attorney Bradly Hertz said.

“It’s really five mistakes that were really technical by the city clerk’s own admission, and (it is) almost silly that the city would rely on that as their way of trying to disenfranchise their voters,” said Hertz.

STOP is asking a judge to order the City Council to either adopt their petition, or place it on the June 3 ballot, and is hoping the matter will be heard by the Sacramento Superior Court immediately.

However, Judge Michael Kenny, the judge first assigned to the case, excused himself before a hearing in the case started, after it was revealed he had signed the petition to put the arena up for a vote, KCRA reported. The case was turned over to Judge Timothy Frawley.

Petition ‘errors’

STOP and Voters for a Fair Arena Deal said the five errors that the city clerk originally cited are not “substantive” and were just technical errors. Members of STOP told me they had a top elections attorney in the state review the petitions, and were told they complied with the law.

“The4000, a group representing the new downtown arena plan, responded to Friday’s decision by saying, ‘For STOP, this has never been about a vote and democracy; it has always been about tricking voters and stalling the arena with a two-part vote designed to blow up the project,’” reported Fox 40 news recently

The4000 was created by Sacramento Mayor Kevin Johnson, a former NBA player, and the lead proponent to build the new arena.

“We all support the clerk and the city’s efforts to protect the public interest, especially given what’s at stake,” Johnson said in a statement.

Read all of CalWatchdog stories on the Sacramento Kings’ arena deal HERE.

Friday, the city clerk announced that she rejected the petitions, along with 34,000 signatures, on the grounds some of the petition versions did not comply with election code.

“Due to technical issues identified in the submitted petitions, I find the petition noncompliant with significant provisions of the California Elections Code and the Sacramento City Charter, and therefore insufficient to move forward,” Shirley Concolino, Sacramento City Clerk, said in a press release.

Yet, just last week, the Sacramento County Registrar certified there were enough verified signatures on the petitions to qualify the measure for the ballot.

The signatures were collected by STOP, Sacramento Taxpayers Opposed to Pork, and Voters for a Fair Arena Deal, to put the decision of whether a public subsidy for the new arena project downtown, should be on the ballot in the city of Sacramento.

“The4000, a group representing the new downtown arena plan responded to Friday’s decision by saying, ‘For STOP, this has never been about a vote and democracy; it has always been about tricking voters and stalling the arena with a two-part vote designed to blow up the project,’” reported Fox 40 news.

The4000 is a group headed up my Mayor Kevin Johnson, a former NBA player. “The downtown arena is an extraordinary, once-in-a-generation project with a profound potential to generate catalytic economic benefits for the downtown, city and region,” The4000 claims.

In the letter Concolino sent to STOP about her decision, she cited the nine different petition versions as being problematic. Concolino said even though the petition’s signatures are valid, they were gathered before STOP officially filed their notice of intent with the city clerk’s office.

“Collusion” and “shady dealings,” are just a few of the words used in a letter to describe the City of Sacramento’s “utter failure to conduct any economic analysis” in the proposed taxpayer-subsidized sports arena.

Attorneys representing members of taxpayer groups opposed to the subsidized arena deal sent the letter to Sacramento City Attorney James Sanchez, with serious concerns over Mayor Kevin Johnson’s Think Big pro-arena group, and the Kings ownership investment group pushing the deal, with no real economic analysis, while they stand to reap all of the benefits.Mayor Kevin Johnson, city officials and the Kings ownership group have pulled out the stops to get this deal done — at any cost.

Attorneys Patrick Soluri and Jeffrey Anderson, who recently deposed Sacramento Economic Development Director Jim  Rinehart about the proposed taxpayer-subsidized sports arena deal, spoke at the Sacramento City Council meeting Tuesday.

The attorneys sent the letter Thursday to City Attorney James Sanchez, to address what they called “a serious misrepresentation” made at the conclusion of the “public comment” portion of the January 21, 2014 Sacramento City Council meeting.

The attorneys said they appeared at the council meeting to address their growing concerns with the City of Sacramento’s  lack of formal or even legitimate economic analysis of  the proposed sports arena, which has been heavily touted by the Mayor’s Office and other high ranking City officials, “several of whom are named individually as defendants in pending litigation,” according to the attorneys.

In the letter to Sanchez, Soluri and Anderson said the City’s only economic “analysis” contained in a staff report was to “cut and paste” bullet points obtained from the Sacramento Kings ownership investment group “in concert with the Mayor’s arena hype machine.”

Soluri and Anderson also wrote a letter  to Sacramento City Councilman Steve Hansen, January 20,  regarding Development Director Jim Rinehart’s sworn deposition testimony, which revealed shocking facts about the City’s failure to perform necessary due diligence with regard to the economic ramifications to the City resulting from the non-binding Term Sheet for the arena deal, adopted by the City Council on March 26.

From Soluri and Anderson’s letter:

“In our public comments Tuesday night, we again asked how the City could have structured a deal including a major public subsidy (consisting of a public subsidy of hundreds of millions of dollars to fabulously wealthy Kings owners and investors) without either engaging its economic development professionals or having the benefit of its own economic impact study,” Soluri and Anderson said. “In particular, the City has engaged in apparent unblinking acceptance of the proponents’ and project developers’ hype regarding the purported catalytic impact of the 1.5 million square feet of ‘ancillary development’ discussed in the Term Sheet that is, by all accounts, a predicate for the City obtaining any tangible economic benefit from the proposed ESC project; but for which there is no solid commitment or even tentative agreed upon timetable to bring to fruition.”

“Specifically, you stated that ‘the staff report and the presentation to the Council at that March consideration provided a significant overview of the economic benefits,’ which you assert the City will enjoy as a result of the ESC project, including job creation and enhanced property values, ‘among others,'” Soluri and Anderson wrote. “Lastly, you stated that the City’s ‘analysis’ set forth in the staff report ‘continues to be on the record and available for the public in the event that there is an interest in reviewing it.’”City denies concerns with planThe attorneys said City Attorney Sanchez attempted to refute the concerns they expressed at the city council meeting, along with  their concerns expressed in the January 20th letter to Councilmember Hansen.”

According to Soluri and Anderson, Sanchez provided false assurances to the public about the purported economic benefits of the arena, which was “a blatant and egregious misrepresentation.”

“Further, your cavalier duplicity is apparent by reference to just a few documents,” the attorneys said.

Soluri and Anderson concluded: “Rather than prepare an independent ‘significant overview of economic benefits’ as you falsely claim, relevant evidence squarely establishes that the City wholly and uncritically relied on claims of ‘economic benefits’ spoon-fed from both Think Big and the Kings investment group – the entity purportedly sitting across the table from the City at arm’s length negotiation.”

Last week, Sacramento Superior Court Judge Eugene Balonon issued a tentative ruling in the lawsuit targeting the arena deal orchestrated by Mayor Kevin Johnson, a former NBA star. It supported petitioners’ requests that they be allowed to depose Sacramento Councilman Kevin McCarty and Sacramento Economic Development Director Jim Rhinehart about undisclosed dealings between city officials and the new Kings ownership group to help it buy the team.

The Sacramento Investor Group, led by tech entrepreneur Vivek Ranadive, purchased Sacramento’s NBA franchise from the Maloof family in May.

Arena deal: Many key issues remain murky

The arena deal has prompted questions over the lack of public debate about key details, dubious financial numbers from the city and the public subsidy the project requires. Also, last-minute legislation by Senate President Pro Tem Darrell Steinberg, D-Sacramento, would let the arena’s construction proceed without a credible environmental impact review.

Plaintiffs Issac Gonzalez, James Cathcart and Julian Camacho are members of Voters for a Fair Arena Deal. They hope to put the arena subsidy issue on the ballot in Sacramento.

Defendants, who include Johnson, City Manager John Shirey, Deputy City Manager John Dangberg and other city officials, have sought to keep the deal behind closed doors and off the ballot.

The lawsuit accuses city officials of making a secret deal to provide an extra $80 million of public money to help the investors’ group beef up its offer against a well-funded Seattle group that wanted to buy the Kings and move them to Seattle, which lost its NBA team to Oklahoma City in 2008. Plaintiffs’ attorney Patrick Soluri said city officials have committed fraud because they have not fully informed the City Council and the public about details of the deal.

The city subsidy, according to the lawsuit, is actually $338 million — not the $258 million the city claims.

In response, the defendants insist the information the petitioners seek is “undiscoverable, privileged information” and contend there was no secret deal. Defendants’ attorney Dawn McIntosh said in in a Thursday court hearing there is not even any formal agreement in place about building the arena in downtown Sacramento. McIntosh said the lawsuit was “a waste of everyone’s time.”

However, the City Council voted Tuesday of last week to begin eminent domain proceedings to acquire the property necessary in the development of the new sports arena.

The lawsuit’s plaintiffs want to depose McCarty and Rhinehart because they believe the city officials have evidence about the city’s undisclosed subsidies. While Judge Balonon indicated in his tentative ruling last week that he favored authorizing a deposition of McCarty and Rhinehart, he also said he would issue his final decision this week.

Councilman McCarty opposes the city arena deal, and thus far, has not responded to deposition requests. I contacted McCarty several times for previous stories about the arena deal, but he did not return phone calls or emails.

Stall tactics until the deal is done

Deposition notices were sent to city officials in September. But according to Soluri, the mayor and city officials have engaged in various avoidance tactics, including filing numerous objections to deposition notices, rolling demurrers, and refusing to comply with a court order directing them to reschedule a further hearing. Soluri said these were stall tactics was designed solely to delay the inevitable discovery until after the city’s expected formal approval of the arena in April.

Those behind the lawsuit are not the only ones who think that Mayor Johnson and other city officials aren’t being honest about the real size of the public subsidy. Public policy watchdog Eye on Sacramento says that when all of the publicly owned assets being thrown into the deal are accounted for, the public’s contribution is actually $375 million — far higher than the city’s $258 million claim.

The city also agreed to give the arena’s private development group the city’s empty 100-acre plot next to Sleep Train Arena in North Natomas and six other city properties, five of them adjacent to or near the downtown arena site. City officials are also giving away the city’s parking lot at the site, and the revenue from parking meters, after claiming the parking lots have no value.

Beyond the legal challenge to the city’s deal, there is also a ballot initiative petition to require a public vote on any public subsidy for a professional sports franchise.  The petition signatures are currently being counted.

However, it appears Mayor Johnson and the City Council will attempt to moot the result of that vote by pushing up their approvals of the arena prior to the June vote that would thereafter require voter approval.  Approval of the deal and related bond sales were previously scheduled for summer or fall 2014.

Craig Powell, president of Eye on Sacramento, calls this “stealing the election.”

The files on the arena lawsuit are available on the Sacramento Superior Court website, case no. 34-2013-80001489.

It’s now threatening the validation of 35,000 ballot initiative petition signatures that would halt the proposed subsidy of a new arena for Sacramento’s Kings basketball team.

The ADS gripping Sacramento has infiltrated most of city government, and made it all the way to the city’s top ranking officials. ADS started in the office of Sacramento Mayor Kevin Johnson, himself a former NBA star, then spread like a communicable disease through the Sacramento City Council, senior city management and city hospitality and convention agents. ADS thrives in a host of labor unions and crony capitalist business owners that would benefit from constructing the arena — and, of course, in the super fans.

ADS has divided friends and neighbors, even caused riffs in families.

In December, after the Sacramento City Clerk’s Office is done counting the petition signatures, Sacramento county elections officials said a validation process would take weeks.

The anti-public subsidy group Sacramento Taxpayers Opposed to Pork only needed 22,000 valid signatures from registered city voters to qualify the anti-subsidy measure for the June ballot.

Shortly after STOP turned in the signatures, Johnson decided to turn up the heat on those who oppose the public subsidy, launching a new group called “The4000” (no space between the letters).

“We are going to do everything that we can, and everything in our power to protect the 4,000 jobs we are going to create in this community,” Johnson said at the Dec. 12 launch.

The4000 what?

The4000, co-chaired by Senate President pro Tem Darrell Steinberg, D-Sacramento, and Sen. Ted Gaines, R-Roseville, now is claiming that several of the petitions the anti-subsidy group used are invalid.

The Sacramento City Clerk’s Office and the Sacramento County Registrar said different versions of the petition were submitted, and could be invalid.

The4000 filed a complaint with County Registrar of Voters over the petitions, demonstrating they will do absolutely anything to see that this issue doesn’t get on the ballot.

Fox guarding henhouse

In what could be the fox guarding the hen house, Sacramento County Registrar of Voters Jill LaVine said she is giving the issue to the city and its attorney for their determinations. “I’m tossing it back to the city and their attorney for their determinations,” she said. “Whatever the city and their attorney decide it is up to them,” she said in a recent Sacramento Bee story.

And just in case the County Registrar, the city of Sacramento, and city attorney aren’t effective, Johnson has one more ace-in-the-hole.

Why no vote on “economic game-changer?

The entire planned Downtown Plaza arena project, which Johnson says is “a once-in-a-lifetime economic game-changer that has an opportunity to transform downtown forever,” will be punted to the Sacramento Planning Commission.

The owners of the Sacramento Kings also want to build a 250-room hotel, 550 apartments, new offices, and more retail shops on the blighted K Street Downtown Plaza — property now mostly owned by the city of Sacramento, obtained through eminent domain from previous redevelopment efforts that failed.

The Planning Commission is expected to make its recommendations on the arena project in February.

And … drumroll please … the Planning Commission Chairwoman is none other than Kiyomi Burchill, a former legislative staff member to Steinberg. Kiyomi was appointed to the planning commission by Mayor Johnson.

Burchill, now 29, was appointed assistant secretary of the Health and Human Services Agency by Gov. Jerry Brown in 2011. Prior to that, Burchill was a policy consultant, legislative aide, and California Senate Fellow for Steinberg, going all the way back to 2006.

This is a cartel

It appears Mayor Johnson has this cartel locked up. A cartel is an explicit agreement among often competing business interests, and formal organization of stakeholders who agree to fix prices, marketing, and production, among other business processes. Every which way STOP turns, city officials and local politicians are standing in the way of the taxpayer having a vote in how they want their tax money used.

With Steinberg and Gaines in Mayor Johnson’s cartel, along with the city and county officials, the taxpayers and voters don’t appear to have a chance to avoid being part of Arena Derangement Syndrome.

There was no fast break at a recent court date concerning a suit by Sacramento activists opposed to tax subsidies for a new arena. The activists are Issac Gonzalez, James Cathcart and Julian Camacho.

CalWatchdog.com attended the Dec. 19 hearing before Judge Eugene Balonon, who was expected to decide the case one way or another. Instead, the judge postponed the hearing date out to Jan. 9, 2014.

Just before that date, the plaintiffs and their attorneys, Patrick Soluri and Jeffrey Anderson, hope to be deposing the defendants, Mayor Kevin Johnson, City Manager John Shirey, Deputy City Manager John Dangberg and other city officials. The deposition dates are on Jan. 6, 7 and 8.

“I think we are starting to see the light at the end of the tunnel where we can actually start engaging in some serious discovery to obtain evidence to support the allegations we have made,” said attorney Anderson after the hearing. The attorneys said they are trying to force city officials and staff to reveal an alleged secret deal.

“We believe that will develop additional evidence that we can then take and do further depositions of other city officials and other document request,” Anderson said.

The lawsuit accuses the officials of making a secret deal with arena investors to provide an extra $80 million of public money to help an investors’ group beef up an offer against a Seattle group vying for the Sacramento Kings professional basketball team. Instead of a $258 million subsidy, as the city claims, the city allegedly was really going to deliver $338 million for the arena, according to the lawsuit. In the lawsuit’s wording from its May filing:

“Rather than risk a groundswell of public opposition that would be generated by accurately disclosing the combined subsidies for the arena and purchase of the Kings franchise, Mayor Johnson, Mr. Shirey and Mr. Dangberg determined that it was more politically expedient to simply misrepresent to the taxpayers the true value of the city’s subsidies.”

The entire case file is available at Sacramento Superior Court services.

Response

In response, Mayor Johnson, a former NBA player, the other plaintiffs and their attorneys insist the information the petitioners seek is “undiscoverable, privileged information.” According to a search on the Court website, they claim the discovery “is not permissible.” And they insist:

Solura said of the judge’s ruling on the depositions, “It informed the city that these stunts and tricks to prevent us from getting to discovery will simply not be tolerated anymore.”

The court documents tell the other side, that of the mayor and the other respondents, who maintained:

“Despite the pending demurrer, Petitioners began conducting discovery, but later conceded that their proposed discovery would not assist them in alleging a ripe claim. In light of this irrelevant discovery, respondents were forced to seek – and obtain – a stay of discovery pending its demurrer. A short time later, this Court agreed that the Petition did not raise a justiciable controversy but granted Petitioners leave to amend.”

Initiative

The court case also is competing on time with an initiative aimed at forestalling the arena. Gonzalez is the campaign manager for the group, Voters for a Fair Arena Deal. Reported the Sacramento Business Journal of the signatures the group gathered, “ ‘The overwhelming majority should be approved,’ Gonzalez said, pointing out another group involved in the effort, Sacramento Taxpayers Opposed to Pork, initially said they’d collected over 40,000 signatures, but the total submitted only ended up around 34,000. ‘There was an exhaustive scrubbing going on at the end.’”

The groups working for a ballot measure used a validation service before submitting the 34,000 signatures and think their valid signature percentage will be high, according to a recent Sacramento Business Journal story.

However, reported the Bee, “So far, the council has only tentatively approved the financing plan, and a vote on issuing the bonds won’t come until next spring. What isn’t known is whether the subsidy issue will come to a public vote in June.”

Public funds

The City of Sacramento’s approval of a term sheet on the arena deal “constitutes the illegal expenditure of public funds,” according to the lawsuit. Despite the city calling the term sheet “non-binding,” Gonzalez et al. argue the city has already “committed monies to the hiring of consultants and other services.”

Mayor Johnson and city officials approved the $447.7 million arena deal at the Downtown Plaza in March, insisting it was a public-private partnership, with the private contributions amounting to only about one-third of the deal.

The lawsuit also alleges the public subsidy will enrich the Sacramento Investor Group, at the expense to taxpayers. The Sacramento Investor Group purchased the Sacramento Kings NBA franchise.

In response, the mayor and other backers of the arena cite a city-sponsored study saying the arena will bring $7 billion in economic benefits to the city over 50 years. “That includes spinoffs such as sales at restaurants and hotels, as well as $6.7 million in taxes,” according to a Sacramento Bee story.

Sacramento’s publicly funded arena deal has been billed as “the largest redevelopment project in city history” in Sacramento, as CalWatchDog.com explained in an article.

Voters in 2006: ‘No’

However, for more than 13 years, there have been numerous attempts to gain city approval for a new, publicly subsidized arena. Sacramento voters even turned down two ballot measures in 2006 that would have approved a public subsidy through a ¼-cent sales tax.

In 2011, Johnson formed an “independent” non-profit group to develop the new arena. The “Think Big Sacramento” group conducted a bold public relations campaign to push the publicly subsidized arena plan.

But Johnson’s group turned out to be so closely linked to the Sacramento Kings organization, the Fair Political Practices Commission fined him $37,500 for his failure to report more than $3.5 million in “behest” payments from the Kings. According to the FPPC, “[T]hese payments are not considered campaign contributions or gifts, but are payments made at the ‘behest’ of elected officials to be used for legislative, governmental or charitable purposes.”

No longer is reporting the news enough apparently — the local media seems to want to be a part of the news. And why not? They stand to benefit handsomely should a new basketball arena be built in downtown Sacramento.

Most recently, Sacramento’s ABC Channel 10 News reporter Bryan May, who says he has been covering the Sacramento Kings and the arena story for 10 years, posted a comment on Twitter calling a Sacramento Taxpayers Opposed to Pork signature gatherer a liar, for saying that the arena deal will cost of the public $800 million.

From Twitter:

Wow, just had someone from STOP knock on my door & ask me to sign petition “before city spends $800m of your money.” When will the lies end

Sacramento Taxpayers Opposed to Pork is collecting signatures from Sacramento residents who want the arena subsidy to be decided with a public vote. STOP and other Sacramento proponents of the public vote have until Dec. 16 to turn in 22,000 valid signatures from registered voters located within the city of Sacramento.

Looking out for Sacramento taxpayers

Public policy watchdog Eye On Sacramento, recently researched and did a story on the Goldman Sachs documents showing that the City of Sacramento intends to borrow $304 million — $92 million more than the $212 million that the public were led to believe.

Eye on Sacramento estimates that the average Sacramento family’s share of arena bond costs will amount to a whopping $5,200. The watchdog group said because the city is not using a traditional 25-year term bond with fully amortizing annual payments, and “instead plans to issue an exotic 35-year bond that doesn’t start to fully amortize for 21 years, the city will incur $196 million in higher, unnecessary interest costs over its term, a stunning 73 percent hike in public costs.”

The watchdogs are lapdogs

“When you’re playing a shell game, you keep everything spinning,” wrote Paul Glegg on his blog, Game to 100. Clegg is a former editor and writer with The Sacramento Bee. “You use whatever diversionary tactics you can to distract attention. You put shills in the crowd to whip up excitement. You never want the suckers to figure out they’re being taken for a ride.”

Glegg, who was with the Bee for 32 years, was referring to the new arena project for the Sacramento Kings basketball team.

“The manipulators trying to rip off at least $258 million from the public to build a downtown arena have been playing fast and loose to keep their shell game going. Led by Mayor Kevin Johnson, they’ve sidestepped a public vote on the issue, concocted ridiculous economic benefit projections and pushed a city deeply in debt toward financial peril.”

Glegg explained how arena proponents have been greatly assisted by a local media “willing to sacrifice their watchdog role because of their own self-interest.”

“The Sacramento Bee and local television stations have a big stake in keeping the Sacramento Kings in town,” Clegg said. “The media are the cheerleaders whipping up the crowd.”

Sadly, Clegg is right. News 10’s Brian May is just one of many local sportscasters and journalists who have been pushing the heavily subsidized arena, while on-air, on the radio and in newspapers.

And Clegg doesn’t sugarcoat his former employer’s major role in this con. “The Bee has gotten on its high horse and is demanding the kind of accountability, transparency and accuracy from STOP that it has never demanded from Mayor Johnson and his back-room buddies,” Clegg said. “The newspaper’s front-page placement of the stories is designed to suggest major skullduggery by power players in the arena fight. Innuendo and guilt-by-association are used to up the journalistic ante.”

“I guess the newspaper’s editors realize that many residents are finally becoming aware how much their quality of life will deteriorate if the city siphons millions and millions of dollars from the public treasury to pay for an arena. The editors know voters will reject a subsidy to help billionaires and big developers reap a profit, and they know their own vested interests in the project will suffer.

Eye on Sacramento

“In January, city treasurer Russ Fehr issued a stunning report on the city’s expanding debt obligations: The city was approaching $2 billion in debt, half in outstanding borrowings, the other half in rapidly rising liabilities for employee pensions and retiree health care costs,” Powell recently explained.

“The city’s ratio of total debt to general fund revenue ($372 million) ranks among the highest in the country, which puts the city at greater risk of insolvency, particularly during economic downturns (like the one we’re slowing exiting),” Powell wrote in “Red Ink: Proposed Arena Bond Would Add To City’s Rising Debt.”

And here’s the real kicker:

“An NBA arena typically becomes functionally obsolete just 18 to 20 years after it’s built,” Powell said. “As a result, annual payments will likely be payable on the bond for 15 to 17 years after the new arena has reached functional obsolescence, putting the city in the likely position of having to finance a second arena (to keep the team) while still making jumbo payments on the first one (if it even still exists).”

He added: “By that time, of course, every current councilmember and senior city manager will have almost certainly moved on. But city taxpayers will still be here, scrambling to handle the arena deal’s heavy legacy costs.”

Never mind that I have an unlisted home phone number.

“This is an urgent call from  DowntownArena.org,” the message said. The caller claimed “Out-of-towners” are trying to stop the arena.

“The arena will provide $157 million annually, and create 4,000 jobs. This is an exciting time in Sacramento history,” the caller said. 

“This is Michael Ault, president and CEO of the Downtown Partnership. We need your help,” the caller said. “Stop the dishonest petition collectors.”

“If you believe you’ve been deceived into signing one of these petitions, please call immediately.”

Never mind that I have an unlisted home phone number.

The organizers behind downtownarena.org, a group pressuring taxpayers for a multi-million dollar government subsidy to build the Kings a new stadium in downtown Sacramento, apparently illegally called more than 110,000 Sacramento households this weekend as part of a disinformation and intimidation campaign to dissuade residents from voting on the deal which will cost the people of Sacramento more than three-quarters of a billion dollars over the next four decades.

Well, I never… $908 million by taxpayers for an arena?

I’ve never seen anything like the tactics used by DowntownArena.org. Their desperation proves there is a huge amount of money in this deal… taxpayer money.

The city’s gross spending is exactly why the arena deal needs a vote of the people. The arena deal, led by Mayor Kevin Johnson, has suffered from a lack of public debate, dubious financial numbers from the city, along with a growing public subsidy, and last-minute legislation by Sen. President Pro Tem Darrell Steinberg, D-Sacramento, to let the stadium avoid a real environmental impact review.

The publicly funded arena is being supported and pushed by labor unions and local government groups:

• IBEW Local 340
• National Electrical Contractors Association (NECA) of Sacramento
• Sacramento Regional Builders Exchange
• Associated General Contractors
• Building Owners & Managers Association (BOMA) of Sacramento
• Carmichael Dave & #HereWeBuy
• Greater Sacramento Urban League
• Associated Builders & Contractors (ABC) of Northern California
• Sacramento Metro Chamber of Commerce
• Sacramento Downtown Partnership
• Ironworkers Local 118
• Sacramento Central Labor Council
• Northern California MCA
• Associated Plumbing & Mechanical Contractors (APMC) of Sacramento
• R Street Partnership
• Midtown Business Association
• Sacramento Hispanic Chamber of Commerce
• Sacramento Asian Pacific Chamber of Commerce
• Sacramento Convention & Visitors Bureau

Anyone in Sacramento who received the robo-call and wants to file a complaint, can call the Public Utilities Commission at 1-800-649-7570, or online at https://appsssl.cpuc.ca.gov/cpucapplication/

Sacramento’s publicly funded arena deal has been billed as “the largest redevelopment project in city history” in Sacramento, which should make every tax payer shudder.

A publicly funded arena will mean Sacramento taxpayers can expect a giant toilet flushing publicly funding. Other people’s money is so easy to recklessly spend.

City-created the blight

The blighted Downtown Plaza in downtown Sacramento is entirely the fault of the city, through eminent domain, and its lousy property management. As the largest slumlord on the street, the city is responsible for driving the downtown K Street Mall area from a once-bustling pedestrian mall filled with independently owned shops and department stores, into a crime laden, blighted area replete with abandoned buildings and homeless people — after spending hundreds of millions of dollars in redevelopment money on the space.

Sacramento Police Department has had to cut cops. There are no road repairs. Park maintenance is dwindling. City services overall have been cut already. The publicly funded arena will just usher in massive debt. And when the team can no longer pay its bills, the city, already sinking under huge debt and unfunded pension liability, will file for bankruptcy.

Publicly funded arena deals are public sinkholes, and a bad deal for taxpayers.

New York arena bust

The Wall Street Journal just reported the New York City Barclays Center arena is not producing nearly the revenue projected. The Barclays Center is not only losing money, it made only one-third the first year projected revenue, and can’t pay the annual debt service.

Sacramento’s bad deal

Officials claim the Sacramento arena deal would require the city to commit “$258 million in value, or 58 percent of the arena cost,” according to reports in the Sacramento Bee. “Of that, $212 million would come from selling bonds backed by future revenues from city downtown parking garages. The city’s contribution is the same as it was in last year’s aborted project to build an arena at the downtown railyard.”

But that’s just part of the public’s contribution. Public policy watchdog Eye on Sacramento, says the public’s contribution is actually $375 million, when all of the publicly owned assets being thrown into the deal are accounted for.

What else is being thrown into the pot? The city also agreed to give the arena private development group the city’s empty 100-acre plot next to Sleep Train Arena in North Natomas, as well as six other city properties, five of them adjacent to or near the downtown arena site.

And Sacramento officials are giving away the city’s parking lot and metered parking revenue, after claiming the parking lots have no value.

Is it any wonder economists think arenas make bad investments for taxpayers?

Arenas and sports stadiums a bust

“The basic idea is that sports stadiums typically aren’t a good tool for economic development,” said Victor Matheson, an economist at Holy Cross who has studied the economic impact of stadium construction for decades, reported the Atlantic. “When cities cite studies (often produced by parties with an interest in building the stadium) touting the impact of such projects, there is a simple rule for determining the actual return on investment, Matheson said: ‘Take whatever number the sports promoter says, take it and move the decimal one place to the left. Divide it by ten, and that’s a pretty good estimate of the actual economic impact.’”

“The main problem, I think, with the public financing of sports stadiums isn’t that they happen, but that they happen so often because of how they are sold to taxpayers.”

Ohio arena bust

“Nearly 20 years after county officials promised that public financing for a pair of professional sports stadiums would help usher in a new era of economic vitality, the reality is somewhat different,” the Huffington Post reported in March about Drake Center. “The county’s agreement to build new stadium facilities for the Cincinnati Bengals and the Cincinnati Reds has been described as ‘one of the worst professional sports deals ever struck by a local government’ by the Wall Street Journal.”

Arizona arena bust

In June 2012, the city council of Glendale, Arizona, decided to spend $324 million on the Phoenix Coyotes, an ice hockey team that plays in Glendale’s Jobing.com Arena.

“As the city voted to give a future Coyotes owner hundreds of millions of taxpayer dollars, it laid off 49 public workers, and even considered putting its city hall and police station up as collateral to obtain a loan, according to the Arizona Republic,” the Atlantic reported. “The latter plan was ultimately scrapped.”

Glendale is on the hook for $15 million per year over 20 years to a potential Coyotes owner, but also committed to $12 million annual debt payment for construction of its arena. In return, the city receives only $2.2 million in annual rent payments, ticket surcharges, sales taxes and other fees.” The city will still lose $9 million annually.

The art of the deal

The pubic cost of Sacramento’s current arena subsidy plan will require payments of $25 million per year for 27 years after the initial 8 years of “interest only” payments.  The state recently prohibited school districts from using similar long-term “capital appreciation” bonds.

Arena projects rarely make economic sense because of the flawed way they are structured. Stadiums and arenas are financed with long-term bonds, sticking cities with the debt for unusually long periods of time. Sacramento’s arena bond debt will be around for at least 30 years.

On the steps of Sacramento City Hall Tuesday afternoon, I witnessed members of “Our City — Our Vote” announce the formation of “Voters for a Fair Arena Deal,” to help an arena initiative qualify for the June 2014 ballot. The group said it plans to vigorously advocate for a fairer arena deal for the City of Sacramento and city taxpayers.

And they stressed they want an arena built — just not on the backs of the taxpayers.

“Voters for a Fair Arena Deal,” was formed amidst unanswered concerns about the pubic cost of the current arena subsidy plan, which will require payments of $25 million per year for 27 years after the initial 8 years of “interest only” payments.  The state recently prohibited school districts from using similar long-term “capital appreciation” bonds. Ahem.

The new group has filed registration papers with the Secretary of State and the Fair Political Practices Commission. They expect to get some financial help from nonunion building contractors who have been cut out of the arena deal by the Sacramento Kings owners when the unholy deal ensured the use of only union labor on the half a billion arena project.

The Sacramento arena deal, led by Mayor Kevin Johnson, has suffered from a lack of public debate, dubious financial numbers from the city, along with a growing public subsidy, and last-minute legislation by Sen. President Pro Tem Darrell Steinberg, D-Sacramento, to let the stadium avoid a real environmental impact review.

“The City’s attempt to suddenly speed up the schedule makes it appear they are trying to circumvent the public’s right to be heard,” said Susan Patterson, Sacramento city resident and former SMUD Board member, “that’s not how you build public confidence.  We need to move past the angry twitter wars and campaign stunts — that’s why we’re adopting Our City, Our Vote’s campaign ethics code at the same time.”

Too many politicians seem to have one thing in common — they all are always willing and eager to put taxpayers in more debt on ego deals the cities do not need, and cannot afford.

Non-union contractors offer help

Voters for a Fair Arena Deal said non-union contractors will likely donate between $15,000 and $25,000 to help mount the campaign, along with other donations.

Interestingly, the largest area electrical contractor qualified to do the work on a new arena is non-union. Rex Moore Electrical Contractors and Engineers would probably rather see a project allow free and open competition for all construction contracts, instead of going out of the city for contractors — especially if this arena project is all about creating jobs for Sacramento, as proponents claim.

The “deal,” known as a project labor agreement between private developers, the city of Sacramento, and one big labor union, happens when the government awards contracts for public construction projects exclusively to unionized firms.

According to Eric Christen, executive director of the Coalition for Fair Employment in Construction, the Sacramento construction market is 85 percent union-free. In a September op-ed in the Sacramento Bee, Christian asked, “why would the owners agree to a PLA that will only make this project more expensive?

The Coalition for Fair Employment in Construction is a California-based organization dedicated to opposing project labor agreements. The CFEC called the arena PLA “a waste of taxpayer money and a payoff to unions to avoid baseless complaints and lawsuits under the California Environmental Quality Act.”

10 Principles of a Fair Arena Deal