“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, in the lawsuit targeting the arena deal orchestrated by Mayor Kevin Johnson, a former NBA star, Sacramento Superior Court Judge Eugene Balonon had issued a tentative order on the depositions. But he said he would deliberate a little longer on the case law before issuing a final ruling.

The judge's order issued Tuesday supports petitioners’ requests that they be allowed to depose McCarty and Rhinehart.

The plaintiffs are a group of citizens known as STOP (Sacramento Taxpayers Opposed to Pork) who are fighting the arena subsidy deal. According to the lawsuit filed by STOP, the city subsidy is actually $338 million — not the $258 million the city claims.

STOP has tried to get the details of the arena deal and purchase of the Sacramento Kings to be made public.

'Undiscoverable, privileged' information?

The attorney for the defendants insisted in court and in legal filings that the information the petitioners seek from McCarty and Rhinehart is “undiscoverable, privileged information.”

“The court disagrees,” wrote Judge Balanon. “Defendants have not met their burden in asserting this privilege as to Councilman McCarty.”

An order protecting Rhinehart from being deposed was also denied by the judge.

Deposition notices were sent to city officials in September. But according to the plaintiff's attorney, Patrick 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 designed solely to delay the inevitable discovery until after the city’s expected formal approval of the arena in April.

“Defendants request for a stay of all discovery pending a ruling on another demur is DENIED,” the judge wrote in Tuesday's ruling.

Following the hearing last Thursday, Sacramento Bee columnist Marcos Breton ridiculed the lawsuit.

“Did you hear about the 'secret deal' between the city of Sacramento and the Kings? It’s supposedly a backroom, off-the-books, under-the-radar, 'sweetener' that was cooked up secretly between city officials and Kings owners. It would secretly provide hidden subsidies from the city to the Kings for the purpose of secretly making the Kings owners financially whole for 'overpaying' to buy one of the worst franchises in the NBA.”

essay to buyToday Breton may be eating crow for lunch. He's openly championed the arena deal and mocked anyone opposed to it.

Councilman McCarty has consistently opposed the arena deal. He sent a letter to City Manager John Shirey and the news media last February, challenging the use of public money for an arena, questioning whether the city would get a return on its investment and asking who would be accountable if revenues don't meet expenses.

Ballot initiative on subsidy

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.

See recent CalWatchdog stories covering the Sacramento arena deal here, here, here  and here.

And go here for all of the CalWatchdog stories on the arena deal.

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.”

According to a press release sent  out Friday by his office, “In recognition of Sacramento’s leadership in preparing for the impacts of climate change, Mayor Kevin Johnson was selected as a member of President Obama’s Task Force on Climate Preparedness and Resilience.”

Mr. Arena, shown at right with activist Van Jones, is also Mr. Green.

Scientific data be damned

Despite recent scientific data which contradict government claims that carbon energy and emissions cause climate change, Obama continues with climate alarmism.

Titled “Preparing the United States for the Impacts of Climate Change,” the new executive order was issued at a strange  time — much of the rest of the world has finally caught up to the fact that global warming is a fraud, and based on a myth.

“Average temperatures have leveled for more than a decade, despite the sharply rising use of carbon energy in China and other countries,” the Daily Caller reported. “U.S. use of carbon energy has stabilized with increasing market-driven efficiency and tightening regulations.”

Bypassing Congress once again, the executive order will be implemented by Obama’s czars and appointees.

The council is officially intended “to prepare the nation for the impacts of climate change by undertaking actions to enhance climate preparedness and resilience.”

KJ the Green Czar

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

Gov. Jerry Brown just signed SB 743, “easing environmental regulations for developments in California cities, including a new basketball arena in downtown Sacramento,” the Los Angeles Times said.

In March I predicted Senate President Pro Tem Darrell Steinberg, D-Sacramento would jam legislation through exempting the Sacramento Kings new arena plan from the restrictions of the  California Environmental Quality Act, in order to meet a dubious deadline imposed by the NBA.

March 30, after Steinberg’s office told me he did not plan on authoring legislation to streamline or bypass the required environmental process for the proposed Sacramento NBA arena, I predicted they weren’t being straight with me.

Steinberg’s office denied any plan to do this. But the reason I wrote the story and asked about this was I knew this was the next step in scamming the public with the publicly subsidized arena.

The need to bypass California’s absurdly strict environmental guidelines and restrictions prevent most large scale projects from ever taking place without legislative intervention. And Sacramento officials shoved the latest iteration of an arena deal through at breakneck speed for a reason.

But even Steinberg couldn’t get his original bill, SB 731 through the committee process. His colleagues weren’t comfortable with Steinberg’s intended claims of reforming the entire CEQA process, when really his bill was just a conduit for the Sacramento arena deal.

SB 731 was shelved and the new conduit became a gut-and-amend bill. SB 743 rose from the ashes like a Phoenix. (Poor choice of words for the Sacramento Kings…)

Steinberg’s latest bill was introduced at the very end the legislative session, without notice, public debate or any real scrutiny by media. Nearly all of the Sacramento local media — radio, television, newspapers and magazines — are backing the arena project, and providing the cheerleading.

Yet Steinberg’s bill is even worse than previous stadium legislation. It also would allow the City of Sacramento greater eminent domain powers to seize the downtown property currently in the way of building the project.

More shameful, is what media claims the bill will do, rather than highlight what abuses of power it will allow, and gifts of public property to the arena developers.

According to the LA Times provisions of SB 743 will (in bold):

–Remove parking and aesthetics standards as grounds for legal challenges against developments in urban infill areas near transit stops.

Among the assets being “gifted” to the arena deal are the city’s parking garages and meters, which currently generate about $9 million a year for the general fund. The city has proposed diverting all of the city parking revenues to pay the arena bond payments. This will blow a $9 million annual hole in the general fund.

City staff assigned zero value to the 3,700 parking garage spaces the city is giving to the developers, nearly 50 percent of all city-owned garage spaces. The garage spots actually have a fair market value of $58 million, based on the city’s own 2012 parking valuation study.

–Modernize the statewide measurements against which traffic impacts are assessed and resolved, allowing developers to offset the impacts by building near mass transit stations.

Not true. Steinberg’s CEQA exemption bill would allow arena construction to go ahead even with existing traffic backups in this part of downtown, and anticipated significant traffic impacts due to the arena. Then taxpayers will be on the hook when Caltrans decides to send a bill of $100 million-plus for freeway improvements — after arena construction is already underway.

–Expand an exemption from CEQA litigation for mixed residential/commercial projects located within transit priority areas where a full environmental impact review has already been completed.

For the Sacramento arena project, the bill prevents certain lawsuits stopping the project unless a judge finds a danger to public health and safety, and allows the government to force the sale of properties through eminent domain concurrently with the environmental review process.

Even if there are violations to the CEQA laws, mitigation doesn’t have to be addressed until the end of the first basketball season with an official NBA team actually playing in the arena.

“This bill sets a terrible precedent by eliminating any realistic chance of halting construction if the arena is approved illegally,” Kevin Bundy, Senior Attorney with the Center for Biological Diversity, said in a press statement, in a story I recently wrote. “This is a wink and a nod to public officials that they can ignore California’s most important environmental law with impunity.”

The truth is the City of Sacramento is giving assets to the arena developers, which city officials say have a value of $46 million. However, Eye on Sacramento, a public policy watchdog group, estimated the real value of these assets is at least $139 million, making the total taxpayer subsidy $350 million — not the $257 million as represented by the city.

Another area of substantial discrepancy is between the subsidy numbers provided by the city and EOS’s subsidy calculations.

City staff also assigned zero value to the six digital billboard sites the city is giving away as part of the arena deal. But EOS found the sites are worth $18 million based on values established in a deal the city cut with Clear Channel Outboard just last year.

The remaining discrepancies are due to the city staff’s gross under-valuation of the six land parcels the city is also giving away to the developers. EOS found two of the six parcels to be worth four to six times the values assigned by staff.

Opposition

Because of the lack of public debate about the arena deal, as well as the highly dubious numbers put out by the city over the growing public subsidy, groups are joining efforts to oppose the arena in Sacramento for the Kings pro basketball team unless it is first put before voters for a vote.

A recent poll by the opposition group Sacramento Taxpayers Opposed to Pork found 78 percent of the respondents favor a public vote on taxpayer subsidies for the arena. Yet Steinberg and Sacramento Mayor Kevin Johnson, a former NBA player, have forged ahead as if it’s already a done deal.

And despite the Steinberg fast-tracked legislation now signed by Gov. Jerry Brown, I suspect the effort to put an initiative on the ballot will heat up.

A recent poll by the opposition group Sacramento Taxpayers Opposed to Pork found 78 percent of the respondents favor a public vote on taxpayer subsidies for the arena. Yet Steinberg and Sacramento Mayor Kevin Johnson, a former NBA player, are forging ahead as if it’s already a done deal.

But the deal is not done even though Steinberg is fast-tracking legislation to give the arena an exemption from the California Environmental Quality Act. The exemption is needed to meet an NBA-imposed deadline for quick construction.

Steinberg’s bill, a gut-and-amend job on another bill, will be introduced Friday. It will be similar to recent bills granting CEQA exemptions for a proposed stadium in downtown Los Angeles for a pro football team; and for a new stadium for the San Francisco 49ers in Santa Clara.

No debate

Steinberg’s latest bill is also being introduced at the very end the legislative session, without notice, public debate or any real scrutiny by media. Nearly all of the Sacramento local media — radio, television, newspapers and magazines — are backing the arena project.

Yet Steinberg’s bill is even worse than previous stadium legislation. It also would allow the City of Sacramento greater eminent domain powers to seize the downtown property currently in the way of building the project.

“When it comes to infill projects, when it comes to high wage, big job-opportunity projects, we ought to do all that is reasonable to expedite the process,” Steinberg said in a press conference Aug. 30.

The “reasonable, high wage, big job-opportunities” he is referring to will fall under a Community Workforce and Training Agreement in Sacramento, which requires most of the constructions workers hired for the arena project to be unionized.

Flexing union muscle

“Labor unions and the firm signed to lead construction of a new Kings arena in Sacramento have come to an agreement over the use of unionized labor in the construction of the project, a move that assures peace with the unions but will likely trigger a new source of opposition to the proposed public subsidy for the arena,” the Sacramento Bee reported Wednesday.

But that only enraged and energized the Coalition for Fair Employment in Construction, a 15-year-old California-based organization dedicated to opposing Project Labor Agreements, which guarantee contracts to unionized firms. 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.”

“Steinberg needs union lobbyists and Democrats to push through his special [California Environmental Quality Act] exemption bill,” said Eric Christen, CEFC Executive Director. “Requiring construction companies to sign a Project Labor Agreement with unions locks up majority support in the legislature for this special interest bill.”

Opposition to the arena deal process

“This is not a hospital, emergency response center, or even a school,” Abigail Okrent told me in an interview discussing Steinberg's gut-and-amend legislation; she's the legislative director for the Planning and Conservation League. “If this is such an urgent issue, why not for other issues? It’s a basketball stadium, not a hospital.”

The rushed bill will allow only a limited public comment period during the CEQA process, according to Okrent. Even more egregiously, she said that, even if there are violations to the CEQA laws, “mitigation doesn’t have to be addressed until the end of the first basketball season with an official NBA team actually playing in the arena. This is a contentious issue which requires more discussion.”

The Planning and Conservation League has taken no position on the arena, but is objecting to the rushed,  gut-and-amend bill, and to the lack of proper public vetting.

“This bill sets a terrible precedent by eliminating any realistic chance of halting construction if the arena is approved illegally,” Kevin Bundy, Senior Attorney with the Center for Biological Diversity, said in a press statement. “This is a wink and a nod to public officials that they can ignore California’s most important environmental law with impunity.”

Gifts of assets

The City of Sacramento is giving assets to the arena developers, which city officials say have a value of $46 million. However, Eye on Sacramento, a public policy watchdog group, estimated the real value of these assets is at least $139 million, making the total taxpayer subsidy $350 million — not the $257 million as represented by the city.

Among the assets being gifted to the arena deal are the city’s parking garages and meters, which currently generate about $9 million a year for the general fund. The city has proposed diverting all of the city parking revenues to pay the arena bond payments. But according to EOS, this will blow a $9 million annual hole in the general fund.

Sacramento is already running a $9 million deficit; another $9 million would double that to $18 million.

Another area of substantial discrepancy is between the subsidy numbers provided by the city and EOS's subsidy calculations.

According to EOS, a large portion of the discrepancy can be attributed to city staff assigning zero value to the 3,700 parking garage spaces the city is giving to the developers, nearly 50 percent of all city-owned garage spaces. EOS calculates the garage spots actually have a fair market value of $58 million, based on the city's own 2012 parking valuation study.

City staff also assigned zero value to the six digital billboard sites the city is giving away as part of the arena deal. But EOS found the sites are worth $18 million based on values established in a deal the city cut with Clear Channel Outboard just last year.

The remaining discrepancies are due to the city staff's gross under-valuation of the six land parcels the city is also giving away to the developers. EOS found two of the six parcels to be worth four to six times the values assigned by staff.

And EOS warns Steinberg's CEQA exemption bill would allow arena construction to go ahead even with anticipated traffic impacts. Then taxpayers will be on the hook when Caltrans decides to send a bill of $100 million-plus for freeway improvements — after arena construction is already underway.

By Katy Grimes

This unnatural and inexplicable push by Sacramento city officials for a downtown arena is suspicious. Without any explanation, all discussion of the proposed arena at the adjacent old rail yard stopped. Then the local media shifted right along with the city, and never asked why. Instead they started repeating the new mantra for a downtown arena.

The city of Sacramento is the biggest slumlord downtown, through years and years of downtown eminent domain and lowball building purchases. This new downtown arena would serve to conveniently improve the property values of the Sacramento Housing and Redevelopment Agency-owned properties downtown.

Not only did the local newspaper, television and radio media never ask why the city changed its push for the downtown location instead of the present location outside of the city or the rail yard, now city officials have the local media talking about how much the property value would improve. It’s just gross.

I am not opposed to a sports arena in downtown Sacramento. But I am opposed to the nearly 75 percent public subsidy by the taxpayers of Sacramento. If the developers involved in the arena deal can make a go of a new arena in Sacramento, they should. But it appears this deal can’t stand up to any financial scrutiny without the city of Sacramento bringing the bulk of the money to the table.

What kind of “development” is that? It’s a scam.

“The mayor, himself a former NBA All-Star, has scrambled to assemble a group to buy the team, convince commissioner David Stern to consider a counter offer, and get approval for the financial deal that would build a $448 million arena on the site of a shopping mall — a development many say will revitalize a problem area in its bustling city core,” ESPN said.

The problem area in downtown Sacramento is entirely the fault of the city and their lousy property management. 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, to a crime laden, blighted area replete with abandoned buildings and crazy homeless people. It sounds ripe for another publicly-funded re-do.

“How do you transfer $250 million from taxpayers to billionaires?” my friend Stephen Frank recently commented on one of my arena stories on his website. “How do you become a billionaire?  One way is to have others pay for your play toys.  Is it the role of government to pay for arenas, in Stockton they paid for a parking lot for a movie theater, LA and San Fran have the Coliseum and Cow palace—while all of California is being inundated with criminals and fewer cops.”

Frank is so right.

“Arenas are nothing more that fields of schemes, and the joke is on taxpayers. And Sacramento is hardly a bastion of economic splendor,” I wrote in March in Sacramento arena: ‘Field of Schemes.’

“Despite some of the highest unemployment in the country, escalating business closures, widespread home foreclosures and short sales, and declining tax revenue, arena talks are all the rage in Sacramento.”

According to Eye on Sacramento, a Sacramento-based public policy watchdog group, Sacramento’s “city staff has grossly understated the total public contribution to the arena. Instead of contributing $258 million, EOS estimates that city taxpayers will be contributing $334 million to the project, representing not 58 percent of the project cost, as claimed by staff, but 75 percent of the project’s cost (not counting subsidies provided by county government or future undetermined traffic infrastructure costs.)”