“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.”

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/

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.

Reform or worsen?

Steinberg insists he’s only trying to reform the California Environmental Quality Act.

SB 743, is a gut-and-amend bill by Steinberg is titled, “Environmental quality: transit oriented infill projects, judicial review streamlining for environmental leadership development projects, and entertainment and sports center in the City of Sacramento.”

That’s the long way of saying this is not really a CEQA reform bill. It’s a face-saving way out for Steinberg who has been awkwardly intertwined for more than 13 years with the haphazard development of a new sports arena in downtown Sacramento.

On its way to the Gov

This isn’t a one-off bill. Exemptions from the California Environmental Quality Act were granted a couple of years ago 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.

But Steinberg’s bill has so much more in it, which have nothing to do with reforming environmental laws:

• The bill would allow the City of Sacramento greater eminent domain powers to seize the downtown property currently in the way of building the project.
• The firm signed to lead construction of the new NBA Kings arena will be required to use unionized labor in the construction of the project.
• The bill will allow only a limited public comment period during the abbreviated CEQA review process.
• Even if there are violations to the CEQA laws found in the development of the arena, mitigation cannot be addressed until the end of the first basketball season.
• The bill would allow arena construction to go ahead even with forseen traffic impacts. 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.

Who voted for SB 743?

In the Senate, eleven Republicans voted with Steinberg to pass SB 743: Sen. Jean Fuller, R-Bakersfield, Sen. Steve Knight, R-Palmdale, Sen. Ted Gaines, R-Rocklin, Sen. Jim Nielsen,  R-Gerber, Sen. Minority Leader Bob Huff, R-Diamond Bar, Sen. Andy Vidak, R-Hanford, Sen. Mimi Walters, R-Laguna Niguel, Sen. Mark Wyland, R-Escondido, Sen. Tom Berryhill, R-Twaine Hart, Sen. Bill Emmerson, R-Redlands, and Sen. Anthony Cannella, R-Ceres.

Assembly members voting for passage of Steinberg’s SB 743 include: Assemblyman Frank Bigelow, R-O’Neals, Assemblyman Travis Allen, R-Huntington Beach, Assembly Minority Leader Connie Conway, R-Tulare, Assemblyman Brian Dahle, R-Bieber, Assemblywoman Beth Gaines, R-Rocklin, Assemblyman Jeff Gorell, R-Camarillo, Assemblyman Brian Jones, R-Santee, Assemblyman Eric Linder, R-Corona, Assemblyman Dan Logue, R-Linda, Assemblyman Brian Maienschein, R-San Diego, Assemblywoman Kristen Olsen, R-Modesto, and Assemblyman Scott Wilk, R-Santa Clarita.

Republicans voting against the bill were: Assembly members Shannon Grove, R-Bakersfield, Diane Harkey, R-Dana Point, Allan Mansoor, R-Costa Mesa, Melissa Melendez, R-Riverside, Mike Morrell, R-Rancho Cucamonga, Brian Nestande, R-Palm Dessert, Jim Patterson, R-Fresno, Rocky Chávez, R-Oceanside, Tim Donnelly, R-Hesperia, and Marie Waldron, R-Escondido.

Only one Republican in the Senate voted against SB 743: Sen. Joel Anderson, R-San Diego.

I told ya so

After Sacramento officials accelerated approval on this latest arena deal in March, I contacted Senate President Pro Tem Darrell Steinberg, D-Sacramento, and asked if he planned on authoring legislation to streamline or bypass the required environmental process for the proposed Sacramento arena. Steinberg’s office denied any plan for a CEQA exemption. However, in order to shoehorn the publicly subsidized arena into downtown Sacramento, this had to be in the cards.

California’s absurdly strict environmental guidelines and restrictions prevent most large scale projects from ever taking place without legislative intervention. But instead of choosing certain projects for exemption, the California Legislature made noise about the need for CEQA reforms, but thus far, has killed any sincere attempts at real reform.

The Spring flip flop collection

Steinberg announced in late April he was authoring legislation to make changes to California’s Environmental Quality Act, including provisions to greatly help Sacramento’s proposed downtown arena.

He introduced SB 731 and said it would “accelerate the pace at which a Downtown Sacramento sports and entertainment complex would proceed through the environmental planning process.”

Sacramento has spent 13 years trying to build a publicly funded sports arena. And Steinberg has been involved every step of the way.

“Many say given how Sacramento officials have already rammed through the term sheet approval in record time, they will also try to ram the development process through, without giving residents and businesses the standard allotted time to question the process and project,” I wrote March 30.

I’ve written nearly 30 stories on CalWatchdog about the Sacramento arena debacle. I’ve provided data and studies showing publicly subsidized arenas never pencil out, leaving taxpayers to continue subsidizing the facilities.

What could Steinberg have used to sweetened the pot for Republicans in order to garner some of their votes for passage of SB 743? No one is talking… yet.

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.

Reform certainly is needed. When mayor of Oakland a decade ago, Gov. Jerry Brown called CEQA reform “the Lord’s work.”

Illustration of proposed downtown Sacramento sports arena

But SB 731 is not just a CEQA reform bill. It’s intertwined with Steinberg’s involvement in developing a new sports arena in downtown Sacramento, including meetings with National Basketball Association brass. It addresses the impacts in urban infill areas and transit priority areas immediately surrounding the areas. The bill was heard in the Assembly Local Government Committee last week.

SB 731 would “accelerate the pace at which a Downtown Sacramento sports and entertainment complex would proceed through the environmental planning process,” Steinberg said in a statement in March.

Also in March, I first predicted Steinberg would author some kind of CEQA exemption for the new arena.

CEQA is often called “the tort lawyer full employment act.” So SB 731 could be called the “Sacramento Kings full employment act.”

CEQA reform

Steinberg claimed he was pursuing CEQA reform before the Sacramento city council approved the arena deal in March. But city officials have spent 13 years trying to build a publicly funded sports arena. And Steinberg, a former Sacramento city councilman before becoming the state senator for the city, has been involved every step of the way.

Originating in February, SB 731 was amended just after Steinberg traveled to New York City in April to meet with the NBA Board of Governors about the arena deal. He was accompanied by Sacramento Mayor Kevin Johnson, a former NBA star

The bill analysis explains:

“According to the author, SB 731 is a comprehensive reform measure to strengthen CEQA’s protection of the state’s environment and residents while modernizing the law to aid California’s economic growth. The author states, ‘today’s bill is the result of months of discussion and negotiation with key representatives from the business, environmental, and organized labor communities.’  These changes were key issues identified by a CEQA working group of experts brought together by Senator Steinberg this past fall.  Steinberg said, ‘Taken together they will help reduce litigation and delays from CEQA while protecting the legitimate uses of the statute.’”

The April amendment said:

“This bill would provide that aesthetic impacts of a residential, mixed-use residential, or employment center project, as defined, within a transit priority area, as defined, shall not be considered significant impacts on the environment.”

Sustaining sustainability projects

In order for Steinberg’s bill to have heft, and not appear not to be just about the Sacramento arena deal, SB 731 also advances implementing SB 375, the Sustainable Communities Act, passed in 2008 under his sponsorship. It was the companion bill to AB 32, California’s Global Warming Solutions Act of 2006. Combined, the bills aim to reduce Californians’ energy use and encourage them to live in high-tensity dwellings, not suburbs.

SB 375 included CEQA streamlining. And it was supposed to have inspired a flurry of smart planning among local city planners. However, the sustainable communities strategies required by SB 375 has been too expensive for local governments to implement.

SB 731, the new bill, is a twofer: it’s another environmental law, and it’s designed to pay for a previous environmental law, SB 375.

Administrative costs

SB 731 contains language to appropriate $30 million in funding for the CEQA Modernization Act of 2013, but comes up short on addressing the source of the funding.

In earlier versions of SB 731, Steinberg attempted to raid the Air Pollution Control funds, but the environmentalists objected. The original version of the bill, introduced in February, explained:

“This bill would state the intent of the Legislature to provide $30,000,000 annually to the council for the purposes of providing planning incentive grants to local and regional agencies to update and implement general plans, sustainable communities strategies, and smart growth plans.”

“This bill would  state the intent of the Legislature to provide  authorize, upon appropriation by the Legislature, the use of  $30,000,000 annually  to from the Alternative and Renewable Fuel and Vehicle Technology Fund by  the council for the purposes of providing planning incentive competitive  grants to local  and regional  agencies  to update and implement general plans, sustainable communities strategies, and smart growth plans, for planning activities for the implementation of the sustainable communities strategy.”

Grind it out

“You have a Pro Tem of the Senate willing to grind this out to make SB 375 work,” Steinberg said at the hearing last week. “When in doubt, do good policy.”

But a San Francisco Chronicle editorial rightly charged:

“The version of Steinberg’s SB731 that advanced out of the Assembly Local Government Committee last week falls measurably short of what should be the ultimate goal of any CEQA reform: to reduce the duplication of project reviews and to stop the exploitation of an environmental law to achieve objectives (such as unions using lawsuit threats to coerce labor agreements) that have nothing to do with the environment.”

The bill still is being worked on. But in its current reform, it looks like it includes little reform, but a lot of help for the arena.

Sacramento’s previous arena deals were totally discredited by the Sacramento Grand Jury  after voters refused to pass Measures Q and R in 2006. The measures would have approved a quarter-cent sales tax increase and directed the revenues to fund a new sports and entertainment facility. The Grand Jury investigated the arena issue because they wanted to find out “if the City and County of Sacramento deceived their citizens regarding their dealings with the Kings.” According to the Grand Jury, the City and County of Sacramento did deceive the citizens.

Here we are again, with the worst kind of déjà vu.

The Sacramento City Council voted Tuesday to consider invoking the threat of seizing control of  property through eminent domain, in order to land the downtown property for a new arena.

“By a 7-2 vote, the Sacramento City Council agreed Tuesday night to join the Sacramento Kings in negotiating with the owner of the Macy’s furniture and men’s clothing store at the Downtown Plaza over the purchase of the soon-to-be vacant property,” the Sacramento Bee reported today.

The city calls this “negotiating.”

The use of eminent domain is already an abuse of power. While eminent domain laws favor public entities that can prove the land in question is needed for a project of “public necessity” and public use, the use of eminent domain for a sports arena is the most vulgar abuse of power. A sports arena is hardly a public necessity.

And Sacramento already has a professional sports arena, which has been home to the Sacramento Kings since 1985.

Under a preliminary term sheet for the financing of the arena project, approved by the city council earlier this year, the Kings are responsible for acquiring the property for a new arena. The new ownership group purchased most of the Downtown Plaza in May. But Macy’s department store is still located exactly where the group wants the arena to be built.

Legal battle brewing, with a little help from friends

Sacramento Taxpayers Opposed to Pork was formed in 2012 by a group of concerned citizens to oppose a public subsidy to build an arena. STOP favors a privately funded arena, but opposes this multi-million dollar public subsidy without voter approval.

“From the beginning, community activists asking real questions about the City of Sacramento’s arena deal have wondered if they are being attacked by an Astroturf-like opposition fronting for arena developers,” Tab Berg told me; he’s a Sacramento political consultant who also wants the arena project to go before the voters.  “Now they know the answer is: ‘Of course they have.'”

Berg and STOP have been the subject of a full frontal assault by proponents of building the arena. It started with scare tactics over the signature gatherers pushing the public vote. A pro-arena group calling itself DowntownArena.org passed out flyers claiming the signature gathers could be felons and forgers, and may not be bonded or licensed. The group largely is made up of contractors that would benefit from the tax-funded arena, such as Associated General Contractors and the Associated Plumbing & Mechanical Contractors of Sacramento.

“Think about the risks before giving your information to a total stranger,” the flyer said.

According to Berg, “They’ve already carpet-bombed the city with fear-inspiring robo-calls, made up quotes, secret surveillance ‘gotcha’ videos and staged photos,” all in an attempt to discredit the folks working on the arena initiative campaign.

“Opponents of the initiative, most of whom don’t live or vote in the city, are using every trick in the book to stifle local democracy by opposing city residents from having a say on arena subsidies,” Berg said. “In addition to phony claims of secret money, they are fomenting phony fears of voter identity theft and phony claims that the campaign is led by ‘outsiders.’  Even more outrageous are their false claims that signature gatherers are lying about the fact that the arena deal will lead to higher city taxes.

“By diverting over $15 million per year from city coffers to service arena bond debt, the arena deal will hammer city budgets and will almost certainly lead to higher city taxes down the road, or alternatively, deeper cuts in already badly depleted city service levels. The city’s argument that the arena will fund itself through various ‘backfill’ revenue items is specious.”

“Our analysis shows that almost every claimed ‘backfill’ revenue source is unsupported by fact or reason, much like their unsupported, gross undervaluation of city parcels slated to be handed over to arena developers. Even the city treasurer faults city staff for ignoring the value of 3,700 prime garage spaces being gifted to arena developers.”

As Berg and STOP started to gather a head of steam, arena proponents pulled another trick out of their magic bag.

Legal flap

In a carefully calculated distraction, DowntownArena.org even filed a Fair Political Practices Commission complaint on Berg, claiming he broke the law by not disclosing whose money he is spending.

Local media reported Berg was representing the law firm of the former owners of the Sacramento Kings, but had not disclosed this.

But Berg said his role was totally above board: “I’ve been clear on my role: In June, I was asked to help promote STOP’s arena vote initiative.  I provided Taxpayers for Safer Neighborhoods an agreement and an invoice.  They never executed the agreement and never paid me.”

Many of the Sacramento media also favor this publicly-funded arena.

Blighted downtown mall

The blighted problem area in downtown Sacramento is entirely the fault of the city and its 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, 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. It sounds ripe for repeat with the Arena.

Why no debate?

Many voters say they are not opposed to a sports arena in downtown Sacramento, but they are opposed to the  75 percent public subsidy by the taxpayers. 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 do the proponents have to fear from a free and open public debate and a public vote?” Berg asked. “If the deal is such a good deal for the city and taxpayers, proponents shouldn’t have any trouble convincing voters of that fact.”