Comstock's magazine 0118 - January 2018 | Seite 47

That mall, the Downtown Plaza, was 60 percent vacant
and worth about one-tenth of its original value when arena
construction started in May 2014. The Golden 1 Center is
worth $353 million, according to a 2017 valuation by Sacra-
mento County. Additionally, the Sacramento Kings has 1.5
million square feet of space to build across six square blocks
on the west end of K Street, arguably transforming the basket-
ball organization into one of the most prominent real estate
developers in California.
It may be a decade before Capital Region residents under-
stand the full economic impact of the Golden 1 Center and its
surrounding development, but early indicators suggest a me-
teoric rise of demand for commercial space in the central city.
The makeover of downtown’s west end has arrived at the same
time as people rapidly flee soaring prices from the Bay Area, a
convergence that’s radically shifted public discourse on hous-
ing, business climate and what it means to live in Sacramento.
“We’re one of the hottest real estate markets in the coun-
try,” says Vivek Ranadivé, chairman and majority owner of the
Sacramento Kings. “We have the opportunity to do something
really special."
Ranadivé, his developer peers, economic development
proponents and city officials have all proclaimed this new
arena as the signature project to revitalize downtown Sacra-
mento. They promised this state-of-the-art stadium would
make us a world-class city.
WHAT THE PUBLIC GAVE
Not long after Ranadivé completed his campaign to keep the
Kings in Sacramento in 2013 and was hailed a hero, public
comment turned ugly during City Council meetings address-
ing public investment in a new arena. Ultimately, the Council
agreed to provide ongoing public subsidies for the NBA team
without a public vote, and ultimately approved $255 million in
land and cash toward a $477 million arena. Because the City
obligated itself to a flat rate, the Kings absorbed any increase
in cost, and ultimately the City paid 45.6 percent of the $559
million Golden 1 Center.
In August 2015, the City issued $273 million in bonds to fi-
nance its share. Over the course of a 35-year repayment term,
the total obligation will have cost $626 million by 2050. At a
January 2016 Council meeting, then-City Treasurer Russ Fehr
outlined in his presentation that the Kings will pay roughly
60 percent of that amount through lease payments over the
term and through property tax. The rest of the debt service
will come from new revenue from city-owned parking meters
and garages — meaning the City won’t dip into its general
fund, Fehr said during his presentation, stressing, “If people
don’t come downtown and park, they literally don’t pay for the
Golden 1 Center.”
This statement, however, doesn’t account for “opportuni-
ty costs,” which refers to the loss of potential gains for other
services and projects the lost parking money could have gone
to, including libraries, parks, bike trails and law enforce-
ment, says Dr. Robert Wassmer, director of the Master’s in
Land Development Program at Sacramento State.
In considering the value of the Golden 1 Center, Wassmer
says the question to keep in mind is: How much economic
activity would