The Sacramento City Council is being asked to spend up to $555,000 over the next six months to advance a plan to finance and build a downtown arena, according to a city staff report issued Thursday.
The money – scheduled for debate at Tuesday's council meeting – would pay for outside consultants to explore potential funding sources, plan for the construction of a sports and entertainment facility and help represent the city in negotiations with the Sacramento Kings and the National Basketball Association.
The funding would come from the city's parking division budget and from unused money in the city's budget for capital improvement projects. The capital improvement money otherwise could be available for transfer to the city general fund, which pays for basic services such as police, parks and fire.
Among the contracts up for approval is a $125,000 agreement with Barrett Sports Group, a sports facility financing consultant.
The company head, Dan Barrett, already has been serving as a city consultant on the issue. The most recent request would expand Barrett's duties as head of a team of financial and legal experts to review proposed financing methods for the $387 million project and help with potential upcoming arena negotiations.
The staff report points out that the city manager does not need council approval to sign consultant contracts of less than $100,000, and that only one of the proposed contracts – the Barrett deal – is above $100,000.
The other contracts would involve parking experts, legal advisers, municipal financing and banking consultants.
Barrett has stressed to the council that the city should hire a parking consultant quickly. A menu of possible arena financing options developed by Mayor Kevin Johnson's arena task force said millions of dollars could be generated for the project by leasing city-owned parking spaces and garages.
All of the $180,000 earmarked for the parking experts would come from the city's parking division budget. The remaining consultant fees – $375,000 – would come from a pool of funds left over when capital improvement projects such as new parks and community centers are finished under-budget.
Councilman Steve Cohn said he would prefer that the private sector pick up the tab for the consultant work, but that the city "owes it to everyone involved to put together the best plan we can."
"If we're serious about doing our due diligence and trying to come up with a workable plan, there's no question we need the expert help that we don't have in house," he said.
Councilman Kevin McCarty said the "$500,000 price tag obviously gives me and residents a little heartache, but the research and analysis is really needed for our due diligence to make a well-informed decision."
McCarty added, "The analysis for the parking proposal is really intriguing since the insight could be helpful for another investment if the arena plan doesn't pan out."
The City Council will also be asked Tuesday to allow city staff to move forward with an exclusive right to negotiate with developer David Taylor and arena builder ICON Venue Group of Denver to act as the arena development team.
Taylor and ICON then would have the authority to solicit a business partner to invest in the arena and likely operate it once it is built, officials said. The agreement would run through March 1, 2012, the deadline for the city to come up with a workable arena plan or risk losing the Kings.