Get free daily email updates

Syndicate this site - RSS

Recent Posts

Blogger Menu

Click here to blog

Katy Grimes

Sacramento Arena Deal Ain’t Over ’til It’s Over

“It ain’t over ‘til it’s over,” Lenny Kravitz crooned in the 1990’s. And so goes Sacramento’s publicly subsidized arena deal.

The group of 12 citizens who sued the city under the California Environmental Quality Act, were handed another disappointment last week. Judge Timothy Frawley Friday rejected a pair of environmental lawsuits filed by the citizens over the Sacramento Kings’ new downtown arena.

However, an appeal may keep the environmental issues alive.

The group, led by retired Caltrans director Adriana Gianturco Saltonstall, had filed a notice of appeal seeking to overturn a judge’s refusal to grant an injunction halting construction of the planned Kings arena.

Gianturco was then-new-Gov. Jerry Brown’s 1976 pick for director of the California Department of Transportation, often referred to as “Our Lady of the Diamond Lane.”

Saltonstall’s group has also challenged the constitutionality of SB 743, a gut-and-amend job on another bill, by Senate President Pro Tem Darrell Steinberg, Sacramento’s State Senator.

Steinberg’s bill was introduced at the very end the legislative session, without notice to the public, without public debate or any real scrutiny by media.

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

In March 2013, I called Steinberg and asked if he planned on authoring legislation to streamline or bypass the required environmental process for the proposed Sacramento arena. His office denied any plan to do this. The reason I asked was I knew this was the next step in cramming the publicly subsidized arena through the process, even with legal opposition from citizens.

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 this latest arena deal through at breakneck speed for a reason.

After previously denying this was the plan, this is exactly what Steinberg did.

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

Judge Frawley’s decision does highlight the legislative evisceration of CEQA for this project, orchestrated by Steinberg.

It ain’t over ‘til it’s over

There still are legal issues for the arena project besides the possible CEQA cases appeal.

Another lawsuit charges that city officials offered backroom “secret subsidies” to the Kings as part of the $477 million arena deal approved in May.

Issac Gonzalez, James Cathcart and Julian Camacho, three Sacramento taxpayers, filed a lawsuit that challenges the $255 million taxpayer subsidy to the arena project. Still another lawsuit challenged the purchase price for a now-demolished building at the southeast corner of Downtown Plaza, which was taken through eminent domain proceedings.

The taxpayers’ lawsuit charged that the city contribution to the arena released to the public did not include “secret” gifts to the Kings, including city-owned parking spaces at Downtown Plaza. The suit accuses the city of fraud and is seeking to block construction.

Eye on sneaky deals

Eye on Sacramento, a public policy watchdog group, estimated the real value of the “secret subsidies” as 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.

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 warned the Steinberg’s CEQA exemption bill, which would allow arena construction to go ahead even with anticipated traffic impacts, will leave city taxpayers on the hook when Caltrans sends a bill of $100 million-plus for freeway improvements — after arena construction is already underway.


Plaintiffs Gonzalez, Cathcart and Camacho applied to the court last year to be able to depose the defendants, Mayor Kevin Johnson, City Manager John Shirey, Deputy City Manager John Dangberg and other city officials over allegations of alleged secret deal by city officials and staff.

Attorneys Jeffrey Anderson and Patrick Soluri conducted the depositions of several city officials and other document requests.

Depositions conducted by attorneys Anderson and Soluri revealed testimony from City Council member Kevin McCarty that the city offered to sweeten the deal for the Sacramento Investor Group’s purchase of the Sacramento Kings. McCarty testified that multiple representatives of the Kings Ownership group demanded that the city compensate the Kings investors by $125 million because they were “overpaying” for the franchise.

And now, despite the outcome of the CEQA case, the taxpayer case is appears to be unaffected by the court’s ruling on the CEQA challenges.

Stay tuned for Part ll tomorrow

Tags: , , , , , , , , , , , , ,