Sacramento's parking revenues will pay for the city's share of the arena construction loan.
After years of controversial negotiations, the city of Sacramento has finally completed its share of financing for the $500 million basketball arena that will house the Sacramento Kings. The downtown sports complex will include bars, restaurants, and other retail shops intended to revitalize the neighborhood and draw thousands of new visitors to the area. Financing for the complex comes from both public and private sources.
The $272.9 million bond will be paid off with the city's parking revenues, which are expected to increase. Proposals for increasing parking revenue include a hourly rate increase, more restrictions on the hours of no-cost parking, and event-specific pricing. However, according to Dale Kasler, "officials have said the rate hikes would have taken place regardless of the arena debt."
At 5.67 percent interest, City Treasurer Russ Fehr calculates an annual debt service of $18 million. "The Kings will pay an estimated two-thirds of the debt service through lease payments and property taxes generated by the new arena," writes Kasler. Although the Treasurer says the city got a deal, they could have potentially got the loan at 5 percent back in February but were delayed from proceeding by a citizen's lawsuit, which alleged that the city was providing additional unapproved subsidies to the Kings project.
FULL STORY: Sacramento completes Kings arena financing with $272.9 million bond sale
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