So everything is looking positive for the Warriors coming back to San Francisco? Not exactly. Critics have assembled a multimillion-dollar legal fund to fight the project at every turn, and a classic NIMBY battle between well-funded interests looms.

The main opponent “came out of nowhere” in April. The San Francisco Business Times had details:

A group of University of California, San Francisco, donors is threatening to sue or push a ballot measure against the Warriors’ potential Mission Bay arena over parking and traffic concerns. …

 

The group, a nonprofit called the Mission Bay Alliance, worries that arena traffic will bottle up to ensnarl ambulances headed to nearby UCSF Medical Center and threaten the neighborhood’s ability to grow as a biotechnology hub. Its proximity to AT&T Park and possible overlapping game days will exacerbate that, the group says.

 

Sam Singer, who is representing the alliance’s public relations efforts, [said], “The alliance wants to see the (arena) and office towers halted completely. If that doesn’t happen through the EIR and public participation process, the alliance will consider a lawsuit and going to the ballot to stop the stadium.”

Poll suggests public not sold on arena

On the eve of the supervisors’ vote, the Mission Bay Alliance released a poll of 540 voters that showed much less support than the Warriors have asserted. This is from a statement on the alliance’s website:

Based on what they know today about the proposed arena plan in Mission Bay, fewer than half of voters say they support it:

 

Support – 49 percent

 

Oppose – 42 percent

 

Don’t know – 10 percent  …

 

Once voters became aware of the facts surrounding the proposed arena and the expected regional impacts, including traffic gridlock, the lack of parking and clogged emergency access for adjacent UCSF hospitals, support for the arena plummeted even more:

 

Support – 38 percent

 

Oppose – 59 percent

 

Don’t know – 3 percent

 

Parking and traffic ranked as the two most problematic impacts, with 65 percent of voters concerned about traffic gridlock and 67 percent about a lack of parking in and around the arena. … [The project] does little to alleviate the burden the arena will put on regional transit like BART and CalTrain.

Being a popular champion helps sway debate

But the Warriors and the city leaders who back them up on the planned move could benefit tremendously from timing. San Diego voters agreed to help pay for PETCO Park for the Padres in the city’s downtown area in November 1998 — a month after the team won a rare National League title and advanced to the World Series.

The contrast is sharp with present-day San Diego and seemingly broad opposition to having local governments help the Chargers pay for a new NFL stadium. Other factors certainly come into play. San Diego’s reputation as “Enron by the Bay” has faded, but the city’s years of financial struggles have left scars. The city is debating a huge infrastructure program, prompting questions about why $200 million that might go to fix pocked roads and add fire stations would instead help a billionaire build a stadium. But it hasn’t helped the let’s-hold-our-noses-and-accept subsidies crowd that the Chargers have been hugely disappointing since their 14-2 season in 2007, rarely living up to expectations.

The Warriors, by contrast, sharply exceeded expectations in 2014-15, when they won their first NBA championship in 40 years. This season, meanwhile, they got off to the fastest start of any team in NBA history. That could be an ace in the hole for team owners Joe Lacob and Peter Guber.

But the fact that the teams see no trouble in coming up with $850 million apiece seems likely to make San Diego and Oakland voters more opposed to subsidizing billionaire team owners than ever. So does the fact that Walton family member Stan Kroenke, who owns the eager-to-move St. Louis Rams, is preparing to build a $1 billion-plus stadium of his own in Inglewood without public dollars — and with the blessing of city officials who are putting the project on a fast track, bypassing environmental laws.

The deal accepted by Santa Clara County voters in 2010 limiting the subsidies for the 49ers’ new $1.2 billion Levi’s Stadium seemed a good deal at the time; the highest estimate of direct subsidies for the project CalWatchdog.com could find is $156 million. After what’s happened in recent years, that deal doesn’t look so good anymore.

Live sports are gold for TV networks

That’s because the economics of sports have changed since the 49ers’ deal was negotiated. Whether they move or not, the Chargers and Raiders have much less to back up their argument that they would face a “competitive disadvantage” by going without the subsidies that pro teams have traditionally demanded for new stadiums and arenas. They understand that franchise ownership is more beneficial than ever in an era in which live sports are the most consistent way to build a big real-time audience on TV and online.

For the 2014 season, TV networks paid more than $5.5 billion to the NFL. After some league and player pension expenses are paid, the rest of the TV money and other revenue is divvied up among the 32 teams. The $188 million each team got in 2014 was up at least 20 percent from 2013.  Teams are likely to get even more money in coming years. In October, when DirecTV renewed its contract with the NFL, it increased its annual payment from $1 billion to $1.5 billion.

The National Basketball Association and Major League Baseball are enjoying similar huge gains in TV rights payments. Teams in those sports benefit both from national TV fees and local deals with cable companies.

Cable TV bills swell due to sports fees

This double revenue stream explains why the Dodgers sold for a record $2.15 billion in 2012 and the Clippers sold for a record $2 billion in 2014.

Only franchises in the New York City metropolitan area are likely to do better than the 20-year, $3 billion deal the Lakers struck with Time Warner Cable in 2011 to build two regional cable TV networks around the team; and the 25-year, $8.5 billion deal the Dodgers signed with Time Warner in 2013 to set up a dedicated cable channel built on the team’s preseason and regular-season games.

These TV costs, of course, are passed along to consumers via sky-high cable TV bills — something Californians already complain about. When residents put two and two together and realize that pro sports are already hitting their pocketbooks in their cable bills, they may be even less enthusiastic about conveying money to billionaire team owners to help build stadiums.

For these reasons and more, Levi’s Stadium could be the last publicly subsidized pro sports stadium in California.

Sorry, but I can’t believe the tone-deafness of people of some on the right who see this as much ado about nothing. He’s obnoxious.

But what is also noteworthy about this mess is that it exposes how the Los Angeles office of the NAACP essentially has been a reputation defender for Sterling because of money he gives the group. It’s far from just Jesse Jackson who plays the racial spoils game.

The Sterling-is-a-racist timeline starts in 2003 with the first printed reports about his staff hassling black, Latino and disabled tenants at his 100-plus apartment buildings in Los Angeles, with his biggest holdings in Beverly Hills and West L.A.

The timeline continues in 2005 with Sterling paying a multimillion-dollar fine (specific amount undisclosed) and $5 million in legal fees to settle a lawsuit.

In 2006, it continues with a federal investigation of Sterling’s continuing attempts to hassle black and Latino tenants and his newest target: renters with children.

That culminates in 2009 with a Justice Department-orchestrated settlement of $2.73 million.

Even Sterling realized NAACP honor was absurd

Let’s now bring in an NAACP-Sterling timeline.

2008: Five  years after the initial signs that Sterling really, really didn’t want African-Americans in his apartment buildings, the group gave Sterling its President’s Award.

2009: The L.A. chapter gave Sterling its Lifetime Achievement Award.

2014: The chapter was going to give him another award in May before this weekend’s flap.

Why? Because he gave the NAACP money.

What’s really sick is that even Sterling realizes the absurdity of this. This is from the May 22, 2009, Los Angeles Daily News:

“Do you know why they’re here?” Sterling says in the [magazine article], to a companion, about why an ESPN reporter is attending a May 14 ceremony in his honor at the Biltmore Hotel in downtown L.A. “They want to know why the NAACP would give an award to someone with my track record!”

Sterling knows the answer. For the L.A. chapter of the NAACP, gross racism is forgivable — if the price is right.

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.

The key is a recent development that San Diego small-government activist Richard Rider detailed in the Wall Street Journal:

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

Last Thursday, the Bee featured a story under the headline, “PAC pushes Sacramento arena vote but won’t say where it is getting money.” The story claimed that Taxpayers for Safer Neighborhoods, an Orange County-based political action committee, had been “working alongside a group of Sacramento activists gathering signatures for a ballot measure that would require voters to approve public subsidies for sports facilities.” According to the Bee’s version of events, the group wouldn’t disclose its funding.

The story of an out-of-town PAC secretly bankrolling the arena measure stirred hundreds of comments on the Bee’s website. It also spawned a formal complaint with the state’s Fair Political Practices Commission. There’s just one problem: It’s completely false, according to people close to the story.

“The truth is the PAC has $144.50 in the bank and has done absolutely nothing more than lend its name to a press release in support of the Arena vote petition drive,” said James V. Lacy, the principal officer of Taxpayers for Safer Neighborhoods, who also serves as publisher of California Political Review. “The Bee has manufactured this story in a deliberate effort to undermine the public’s right to vote on the arena deal.”

Thundering about campaign donations

The Bee asked the political action committee to release its donors since July 1, a move that isn’t required by state or federal law. The group declined to share such financial information with a newspaper that, it believes, has used its news and editorial pages to back the arena deal. There’s also a reason why the group hasn’t released its list of July donations — none exist.

“The PAC can’t release a list of donors because we haven’t received any donations since July 1,” Lacy said.

The organization’s claims are independently confirmed by the group’s latest campaign finance statement, which showed less than $150 in cash on hand. During the past six months, the political action committee has spent just $426 in bank fees and a nominal consulting fee.

“Taxpayers for Safer Neighborhoods hasn’t spent a dime on the Sacramento arena campaign,” Lacy said. “The PAC has not signed contracts for any petition circulation, has not circulated any petitions or raised any funds for that purpose.”

Lacy said that the group’s involvement in the arena campaign has been limited to one press release. When asked why the group issued the release, Lacy said, “Anytime taxpayers are the victims of an insider deal, we feel compelled to speak out.”

That hasn’t stopped arena supporters from using the Bee’s misleading story for its political advantage. On Tuesday, Joshua Wood, the principal officer of the DowntownArena.org, filed a formal complaint with the FPPC. The complaint is primarily based on the Bee’s articles.

Editors Note: Hrabe is research assistant for Jim Lacy’s upcoming book, “Taxifornia, How Liberals are Bankrupting California.”

By Chris Reed

In January, when Rancho Santa Fe pro golfer Phil Mickelson griped about the Prop. 30-mandated increase in state income taxes to 13.3 percent on California’s highest earners, he was widely pilloried as a heartless rich dude who had freaked out over a small increase in his taxes.

But as San Diego small-government/low-tax crusader Richard Rider subsequently pointed out, Mickelson was not grousing about small potatoes:

By Katy Grimes

As the behind-the-scene negotiations take place between the NBA, the owners of the Sacramento Kings and prospective buyers, there is really only one thing to remember: everything is economic.

The top Kings player is paid more than $8 million. Wouldn’t he like to save a cool $600,000 a year in income taxes just by moving from Sacramento to Seattle?

Even uber-liberal HBO “Real Time” host Bill Maher recently said he may leave California, due to the state’s high tax rate.

Basketball is big business

Sports franchises are multi-million dollar businesses.

Team owners and accountants spend a great deal of their time scrutinizing the finances. A move from the economically depressed Sacramento to Seattle is a hardly a conundrum.

As the Maloof family has suffered losses in their Las Vegas business ventures, unloading the Sacramento Kings, a generally losing NBA team, probably looked good.

Migrating businesses

The marginal personal-income tax rate for wealthy Californians  is 13.3 percent. Washington state has no state personal income tax. So after deductions and tax write-offs, the California state income tax on an $8 million NBA salary would be something like $600,000.

“According to migration data from the Internal Revenue Service, over the 15-year period from 1995 to 2010, King County, where Seattle is located, has gained $32 million in adjusted gross income from Sacramento County,” Forbes reported in January.

“Other California counties have added significant amounts to King County’s coffers, too,” Forbes reported. “During those same 15 years, Orange County lost $98 million in net AGI to King County. Los Angeles saw a huge hit, with King County gaining $313 million of Los Angelenos’ net AGI.”

As the negotiations continue, Sacramento officials seem only to be getting more shrill. The only way Mayor Kevin Johnson, a former NBA star player, can seem to attract and keep business is to promise millions of dollars in public subsidies.

But Sacramento taxpayers have already voted down a public subsidy.

Public subsidy is how the NBA plays

“The league and its players have enjoyed over $3 billion in public funds for new arenas since 1990 and sources tell PBT on the condition of anonymity that the league is sensitive to what a move out of Sacramento could do to future subsidy collection efforts by the NBA,” NBC’s Pro Basketball talk found.

“Any additional ammunition given to public subsidy opponents could impact the league’s bottom line much more than what owners would proportionately receive in a relocation fee, which some have guessed to be in the $30-$45 million dollar range.  The fee can be anything the league wants, and can be as high as the most recent franchise fee or franchise sale amount according to legal scholars at Loyola Marymount.”

Despite this “new norm” of publicly subsidized arenas, Mayor Johnson is spending money he doesn’t have. Cities like Sacramento just don’t have the money, and it is irresponsible and unrealistic of Johnson and the Sacramento City Council to claim tax revenue generated by a new downtown arena would pay for the subsidy. The numbers don’t pencil out.

“With opposition of public subsidies for sports facilities growing every day, sources say the league wants to avoid a situation in which Sacramento provides a “model offer” only to have their team taken away,” Pro Basketball talk said. “This would send a message to future cities that their long-term investments in the NBA are not safe, even if the city does everything reasonably expected of them.”

We can hope. In the meantime, can any public subsidy really take precedence over the high income taxes pro-ball players must pay to live and play in California?

“The Golden State’s new 13.3 percent income tax on top earners prompted golfer Phil Mickelson to say earlier this month he was considering a move, and according to the accountants who advise millionaire athletes, he was just saying what a lot of jocks were already thinking,” Fox News reported in January.

“They’re going to have an exodus of people,” said John Karaffa, president of ProSport CPA, a Virginia-based firm that represents nearly 300 professional athletes, primarily in basketball and football. “I think they’ll see some [leave California] for sure. They were already a very high tax state and it’s getting to a point where folks have to make a business decision as well as a lifestyle decision.”

By John Seiler

Hail the tax-free champions!

Yesterday LeBron James won the NBA championship for the Miami Heat.

Back when James jumped from the Cleveland Cavaliers to the Miami Heat a couple of years ago, one reason cited was that Florida has no state income tax. So he largely avoided the state income taxes of Ohio (5.925 percent top rate), New York (8.82 percent) and California (10.3 percent, plus whatever might be added by voters in November).

Under IRS rules, you pay state income taxes in the state in which the game was played. So James still pays California income taxes when he plays here, New York income taxes in New York, etc. But home games in Florida are exempt. So are endorsement deals, which will become even more bountiful now that he has won the championship some critics said he was too “selfish” to win because he didn’t want to get gouged on taxes.

According to Sports Illustrated, LeBron James slam-dunked $44.5 million last year. Of that, $30 million was in endorsements. And of his $14.5 million salary, probably about $9 million was exempt from state taxes; about $5.5 million was earned in states with income taxes. So he still paid something to California and New York.

But here’s the key: By living in Florida, he also paid little or no California (or other state) sales, property and other taxes. That meant California (or another high-tax state) probably missed out on hundreds of thousands of dollars in tax revenues.

And the people in California (or another high-tax) state who work in real estate, car dealerships, etc., who didn’t get James’ business also didn’t pay taxes on the business they lost.

Remember that when politicians, such as Gov. Jerry Brown, say that raising taxes doesn’t kill jobs.

OK, the Lakers have won a lot of championships in recent years, including five of 13 since 2000. That’s impressive.

But of the last 10 championships, six have been won by teams in states with no income tax: San Antonio in 2003, 2005 and 2007; Dallas in 2011; and Miami in 2006 and 2012. That’s 60 percent for the no-tax states.

Also, in the last two years, the runner-up teams were Miami last year, and Oklahoma City this year. Oklahoma is getting rid of its income tax. So that’s all four teams in states with no state income tax now or in the near future.

Stanley Cup

True, the Los Angeles Kings won Hockey’s Stanley Cup this year. Good for them. And the New York Giants won the Super Bowl; they play home games in New Jersey, where the top state income tax rate is 8.97 percent. But endorsement deals for those teams are much less than for what James gets.

There are no NHL players among the players in the top 10 for salaries and endorsements. Hockey is much less popular in American than basketball.

Football scored two in the top 10 list: Matt Ryan of Atlanta, $32.7 million (6 percent top Georgia state income tax), who has won no championships; and Tom Brady, $30 million (5.3 percent in Massachusetts), who last won a championship in 2005.

Topping the list are two golf guys, Tiger Woods, $62.3 million and Phil Mickelson, $61.2 million. Tiger moved from Taxifornia to Florida years ago. Mickelson is selling his house in Santa Fe Springs.

In the top 10, the only baseball player is Alex Rodriguez of the New York Yankees, at $36 million, just $4 million of it from endorsements. But Albert Pujols of the Anaheim Angels (not of Los Angeles) might top that for 2012.

Recent World Series winners have been from high-tax states: St. Louis in 2011 (6 percent Missouri state income tax), San Francisco in 2010 and the Yankees in 2009. However, baseball rosters, like those in football, are much larger than those in basketball and hockey, meaning mediocre players are much more important to a team’s success. And a utility infielder doesn’t worry about state taxes. He just wants to be in The Show.