Seattle SuperSonics Thread

[Deleted member 38182]

Ok... 7%... so what does that mean... ?

Means they have taken away Sacramento's opportunity to purchase that minority stake and have the ROFR.

In essence, he blocked one avenue Sacramento could use to block the sale.

But KJ says they will have a counterbid for the 7% still 

 

if its only $15m for that minority share, thats pretty low..

 

[Johnny_Cakes]

This is interesting...

 

[a55a5in11]

Kj says a lot. Haven't seen anything though. Hanson was doing stuff instead of talking.

 

[Deleted member 38182]

Kj says a lot. Haven't seen anything though. Hanson was doing stuff instead of talking.

Very very true.

If the Kings do leave, I will be so mad at him for not having done anything.

Real talk though, Seattle needs to stop leaking out this info. The news of the sale agreement coming out in January was probably the best news Sacramento could have had, giving us this much time to figure out what to do. Same with this 7% sale

@kj_mayorjohnson says local group offer for 7% will come in a few days. "No shop" prevents solicitation of offers, can still review them.
— nickmonacelli (@nickmonacelli) March 27, 2013

 

[dmbrhs]

I have a very hard time believing Seattle is leaking out anything. All it takes is a whisper and a Twitter account. I mean, remember who leaked the news back in January: the daughter of David Faulk. How in the world did she know before everyone else?

 

[lightweight champion]

Jason Ross reported Phil Oates claimed Hansen's 7% purchase is all part of KJ's plan...

 

[dmbrhs]

Jason Ross reported Phil Oates claimed Hansen's 7% purchase is all part of KJ's plan...

I don't even understand the logic.

 

[Deleted member 38182]

I have a very hard time believing Seattle is leaking out anything. All it takes is a whisper and a Twitter account. I mean, remember who leaked the news back in January: the daughter of David Faulk. How in the world did she know before everyone else?

Isn't Falk friends with Hansen 

But I meant more for Seattle's side of things it would help Hansen/Ballmer a lot more if they were able to keep this info under wraps and just railroad the sale thru right under the nose of Sacramento, rather than having this whole spectacle unfold.

This kinda reminds me of the sale the Sonics had to Bennett a few years ago you were telling me about 

We didn't even know the team was for sale 

 and I'm sure if it was up to Hansen/Ballmer, he would have like the news to not even come out till the last possible moment so KJ couldn't do his 'talking' and 'nothing'. 

Damn thats actually pretty shady now that I look at it like that 

 but thats not for discussion here.

 

[Deleted member 38182]

Jason Ross reported Phil Oates claimed Hansen's 7% purchase is all part of KJ's plan...

I don't even understand the logic.

agreed, at this point you just gotta go with whatever KJ 'talks' about

Oates says KJ has a "strategy involved" re: #SacKings 7% stake. Would not offer specifics on exactly what that strategy is at this time.
— Jonathan Santiago (@itsjonsantiago) March 27, 2013

EDIT: nevermind, this is why its part of a plan. Fellow minority owners have 15 days to match

To be clear... Limited partners are minority owners. This is the right of first refusal. Matched or better offere due within 15 days.
— nickmonacelli (@nickmonacelli) March 27, 2013

 

[dakid23]

Kj says a lot. Haven't seen anything though. Hanson was doing stuff instead of talking.

Yup.


I like that Sacramento is showing support though . I still think Seattle ends up with the Kings. Sacramento will get the promise of being the next city in line...

 

[Deleted member 38182]

Kj says a lot. Haven't seen anything though. Hanson was doing stuff instead of talking.

Yup.


I like that Sacramento is showing support though

. I still think Seattle ends up with the Kings. Sacramento will get the promise of being the next city in line...

Real talk, what has KJ not done 

also, I'm pretty sure Hansen/Maloofs are under a gag order with the pending sale agreement...... so Hansen can't talk 

 but what has he been up to since the news of the sale broke?

 

[dakid23]

RCK The math doesn't add up imo.... if Sac Town does keep them i hope you like parking .

 

[Deleted member 38182]

 I have no idea what you are saying

what math and what parking?

 

[dakid23]

 I have no idea what you are saying

what math and what parking?

IMO if these whales really have the money, they should finance the arena themselves.

In order to build a downtown arena, Sacramentans will have to give up that which they hold dearest: free parking. The funding plan requires expansion of on-street metering downtown, and will increase parking rates at city lots. The arena’s presence dramatically changes the economics of private parking lots, in ways that threaten the main funding source for the arena.

By releasing the term sheet at the absolute last minute, on a Saturday night, followed by a Monday city holiday and a crashed City of Sacramento website, the opportunity for public review is so limited that it is effectively nonexistent. Three days is simply not enough time for a detailed look at the term sheet, but it was sufficient to find a major flaw in the funding plan.

Arena Construction Funded by Parking Plan

The city’s contribution to the arena plan includes $38 million in private land given to the arena developers, the $5 million in Sheraton MOPA Fund money, and $212.5 million in bonds to be repaid by future parking revenues.

What repays those future parking revenues? The city’s public-owned parking spaces downtown, both city-owned lots and street parking. Today, the city owns 5721 on-street parking spaces between F Street, P Street, Front Street and 17th Street, and 8580 spaces in city-owned lots and parking structures, for a total of 14786 city spaces. Of those 8580 lot/structure spaces, 3700 are inside Downtown Plaza and will be given to the developer. Some will be demolished, others will become a portion of a 1000 space “VIP” parking area inside the arena. 181 of the city-owned spaces are on Lot X, the city block between 3rd, Capitol, 2nd and N Street, and Lot Y, at 2nd and O Street near the Crocker Art Museum, with 85 parking spaces. This leaves 4,614 off-street spaces, or a total of 10,335 city-controlled parking spaces—30% fewer spaces than currently exist.

City Parking Supply Will Shrink—But Profits Expected To Triple?

The revenue generated by the city’s parking spaces (not just downtown, but citywide) creates a $9 million profit to the city. In order for the arena financing plan to work, it must generate enough money to pay off that $220 million debt in 35 years, and replace a portion of the $9 million in lost revenue that currently goes to the General Fund. A $220 million bond with a 35-year term and 5% interest requires payments of about $16 million per year. The “backfill revenue” chart on the Term Sheet assumes $3 million from increased parking revenue and $625,000 from parking revenue during ESC events. Thus, in order for the arena plan to break even, parking profits have to increase from $9 million per year to $20 million per year, with 70% as much downtown parking, effectively a tripling of parking revenue profits while losing one-third of the parking spaces that supply the revenue. The only way to accomplish that goal is to dramatically raise parking rates, and increase metered hours for the on-street parking spaces that represent more than half the downtown parking supply.

Metered Parking Hours Must Extend To Pay Debt

Currently, except in a few high-traffic areas like around Music Circus, street parking in downtown Sacramento is unmetered after 6 PM on weekends. This means that no revenue is generated at night or on weekends. In order to increase revenue and pay for those bonds, Sacramento’s street meters will have to run until midnight or later. Otherwise, arena visitors can park on the street without paying—at least, the first 5721 visitors to arrive downtown, minus spaces occupied by the cars of downtown residents. This practice is common in cities with high demand for parking spaces at night. Of course, visitors could always park farther from the arena, such as in Midtown, and walk downtown, if Midtown parking meters stop charging at 6 PM. If Midtown’s parking spaces get overly clogged at night, they might have to charge for late-night parking too, just to make space for Midtown visitors. And because there are more residents in Midtown than Downtown, most of whom do not have off-street parking, arena visitors will have to find spaces among Midtown residents’ cars and the cars of those visiting Midtown restaurants, clubs and theaters. There are only about 4500 street parking spaces in the Midtown business district, and a 2006 City of Sacramento parking study found that Midtown’s street parking at night is almost as crowded as Downtown’s street parking during the day.

Private Parking Competes with City Parking

Under the proposed arena plan, private parking lots will not have to pay any additional fees. At Thursday’s meeting at City Hall, City Manager John Shirey said that the term sheet will not include a tax on private parking lots. This means that, while an arena will bring much revenue to downtown Sacramento’s private parking lots, none of that revenue will go to pay off the new debt for the arena. Since public parking will become more expensive, private lots that charge less than city lots will draw customers. Because this plan makes parking lots much more profitable, property owners in the central city will have more incentive to convert their downtown properties into parking lots or parking structures, vs. new amenities like housing, retail or offices. Parking lots are a poor generator of city revenue, and a dreadfully poor use of premium downtown land, but if they bring the most immediate profit, parking will become the “highest and best use” for many downtown lots.

The term sheet also gives the new arena operators several downtown Sacramento properties for development, including 8th and K Street, the aforementioned Lot X, Lot Y at 2nd and O Street, and part of the 3700 Downtown Plaza spaces (presumably, about 1000 will not be demolished.) The instant profitability of downtown parking means that, rather than developing these lots, the ESC development team could create an instant, untaxed revenue stream by converting these areas into parking lots.

How Will Nighttime Metered Parking Affect Downtown and Midtown Businesses?

Few subjects in Sacramento are as delicate as the issue of parking. Businesses in downtown and midtown Sacramento generally do not have their own parking lots, and consider free street parking in the evenings essential to draw visitors downtown at night. Past plans to extend metered parking hours or restrict parking in residential areas near business districts inevitably meet enormous resistance from the business community, business associations, and downtown visitors used to parking on the street at night without charge. This would all change with an arena. Yes, there would be many more downtown visitors coming to the arena, but many who may have come to downtown or midtown events might choose to visit other neighborhoods if parking downtown (or midtown) at night means paying $20-30 in a parking lot, or even parking at a meter on the street.

How Can The City Limit Its Economic Risk?

The funding plan depends on people using city lots, rather than private lots, to generate revenue, but does nothing to ensure that those city lots will be used. It gives the developers large plots of downtown land but does nothing to ensure that these lots will not become new parking lots, as much a blight on the urban landscape as a vacant lot. There are three simple modifications of the term sheet that can increase city revenue, create a new funding stream, and help ensure that the lots given to the arena team have a higher and better use than parking.

First: Add an event surcharge to private lots within 1 mile of the arena, and place a moratorium on new parking lots. The arena will create massive new numbers of nighttime visitors and an enormous new income stream for private parking lot owners. In addition to the city’s spaces, there are about 30,000 spaces in privately owned lots and structures. Many sit vacant at night, but this new opportunity for evening business will open their doors. A 5% surcharge, like the surcharge proposed for arena events, means that parking operators that benefit from the arena’s presence will also contribute to its financing.

Second: Add a requirement that the ESC investors do not use properties given by the city for new parking lots. If these investors already plan on uses other than parking, adding the requirement that they not use them for parking is no loss to them. The lots closest to the arena site will become prime real estate for adaptive reuse or new construction, and a simple restriction on the site will help ensure that construction there goes vertical instead of remaining horizontal. The exception to this rule could be the three lots (Downtown Plaza lots, Lots X and Y) that are currently in use as parking structures. Charging the same 5% surcharge to the ESC operators mentioned in my first point will contribute to paying off arena debt—under the current agreement, the arena operators are not obligated to pay any new fees for use of these spaces.

Third: To protect Downtown and Midtown businesses and facilitate parking for their customers, create a citywide validation program for city lots and street spaces. This would work similarly to validation programs at Downtown Plaza: buy something at a Downtown or Midtown store or restaurant, and receive hours of validated parking at city lots. A citywide program will create uniformity and simplify a validation program. This will encourage people to use city lots or street parking, allow visitors to avoid some or all parking charges if they patronize central city businesses, and limit displacement of downtown business patrons by arena visitors.

 

[Deleted member 38182]

 I have no idea what you are saying

what math and what parking?

IMO if these whales really have the money, they should finance the arena themselves.

A few things

1) I was just questioning what KJ has yet to do since you cosigned the guy.

He found an equity group for the city of Sacramento to partner with.

He got a term sheet approved. 

He's going to hit a grand slam again with the BoG coming up.

2) If the whales were to finance the arena themselves, the NBA would throw Sacramento and KJ out the window and Hansen will have completed his railroard relocation job. They are looking to set precedence for publicly subsidized arena for the future. (But glad you found read the Sacramento Press article 

 easily the most anti-development/Kings media in Sacramento).

Why isn't Hansen/Ballmer paying for the arena themselves? They surely have more money than any of our whales.

3) I probably won't be parking at the games when the new arena is built since I live pretty close to it already, I'll probably take the RT to the game! 

I peruse thru the Sonics sites too 

 

[dakid23]

A few things

1) I was just questioning what KJ has yet to do since you cosigned the guy.

He found an equity group for the city of Sacramento to partner with.

He got a term sheet approved. 

He's going to hit a grand slam again with the BoG coming up.

2) If the whales were to finance the arena themselves, the NBA would throw Sacramento and KJ out the window and Hansen will have completed his railroard relocation job. They are looking to set precedence for publicly subsidized arena for the future. (But glad you found read the Sacramento Press article 

 easily the most anti-development media in Sacramento). Why isn't Hansen/Ballmer paying for the arena themselves? They surely have more money than any of our whales.

3) I probably won't be parking at the games when the new arena is built since I live pretty close to it already, I'll probably take the RT to the game! 

We have a plan in place that works for our city , It only effects the people that go to the arena... but If you don't like the NBA but like going to Downtown Sacramento i will feel sorry for you.

 

[Deleted member 38182]

A few things

1) I was just questioning what KJ has yet to do since you cosigned the guy.

He found an equity group for the city of Sacramento to partner with.

He got a term sheet approved. 

He's going to hit a grand slam again with the BoG coming up.

2) If the whales were to finance the arena themselves, the NBA would throw Sacramento and KJ out the window and Hansen will have completed his railroard relocation job. They are looking to set precedence for publicly subsidized arena for the future. (But glad you found read the Sacramento Press article 

 easily the most anti-development media in Sacramento). Why isn't Hansen/Ballmer paying for the arena themselves? They surely have more money than any of our whales.

3) I probably won't be parking at the games when the new arena is built since I live pretty close to it already, I'll probably take the RT to the game! 

We have a plan in place that works for our city

. If you don't like the NBA but like going to Downtown Sacramento i will feel sorry for you.

We have a plan that works for the NBA and our city... but I really do appreciate you looking out for Sacramento. But I trust our city council and elect officials to make the right decisions.

Also, the Chicago/parking issues have already been dispelled 

You still haven't even touched on what KJ hasn't done tho 

 

[dakid23]

We have a plan that works for the NBA and our city... but I really do appreciate you looking out for Sacramento. But I trust our city council and elect officials to make the right decisions.

Also, the Chicago/parking issues have already been dispelled 

You still haven't even touched on what KJ hasn't done tho 

This is the Supersonics thread.... lets talk about them RCK

 

[Deleted member 38182]

We have a plan that works for the NBA and our city... but I really do appreciate you looking out for Sacramento. But I trust our city council and elect officials to make the right decisions.

Also, the Chicago/parking issues have already been dispelled 

You still haven't even touched on what KJ hasn't done tho 

You'll see in april

Honestly can you just inform me 

 I don't want to be blinded with my Sacramento blinders on, seriously. 

 

[dub 253]

Thus, in order for the arena plan to break even, parking profits have to increase from $9 million per year to $20 million per year, with 70% as much downtown parking, effectively a tripling of parking revenue profits while losing one-third of the parking spaces that supply the revenue.

Is this foreal? How can anybody be cool with this?

 

[niketalker23]

Ok... 7%... so what does that mean... ?

Means they have taken away Sacramento's opportunity to purchase that minority stake and have the ROFR.

In essence, he blocked one avenue Sacramento could use to block the sale.

But KJ says they will have a counterbid for the 7% still 

 

if its only $15m for that minority share, thats pretty low..

Hansesn cant have ROFR nor does it take away the other minority owners ROFR since everything is pending league approval and Hansen is 0% owner right now.

 

[niketalker23]

A few things

1) I was just questioning what KJ has yet to do since you cosigned the guy.

He found an equity group for the city of Sacramento to partner with.

He got a term sheet approved. 

He's going to hit a grand slam again with the BoG coming up.

2) If the whales were to finance the arena themselves, the NBA would throw Sacramento and KJ out the window and Hansen will have completed his railroard relocation job. They are looking to set precedence for publicly subsidized arena for the future. (But glad you found read the Sacramento Press article 

 easily the most anti-development media in Sacramento). Why isn't Hansen/Ballmer paying for the arena themselves? They surely have more money than any of our whales.

3) I probably won't be parking at the games when the new arena is built since I live pretty close to it already, I'll probably take the RT to the game! 

We have a plan in place that works for our city , It only effects the people that go to the arena... but If you don't like the NBA but like going to Downtown Sacramento i will feel sorry for you.

The arena is only home to the Kings games which is 40% of arena usage. So an arena isn't just for people who like the NBA.

 

[Deleted member 38182]

Thus, in order for the arena plan to break even, parking profits have to increase from $9 million per year to $20 million per year, with 70% as much downtown parking, effectively a tripling of parking revenue profits while losing one-third of the parking spaces that supply the revenue.

Is this foreal? How can anybody be cool with this?

Naw man it ain't real, just your local conservative PORK folks who reach on every ounce of doom and gloom they can get. Sonics Rising folks are grasping onto anything right now to poke holes at Sacramento's plan right now.

The $9 mill existing profits is from having the parking lots at only about 10-40% capacity, depending on the day of the week and time of year. Without the benefit of having a downtown attraction or entertainment and sports center. Hell I remember reading the parking usage after 6 pm is in the ~5% 

With a year-round event center, one can expect the parking usage to go thru the roof. 

While city-owned parking is going to lose about 30%, private parking lots are also expected to start running their lots well into the night to alleviate any parking shortage (although it shouldn't be a problem).

On top of that, the new ESC guarantees the city $1m up to $10m that will go into the backfill, if not profit for the city.

The thing I'm glad the city of Sacramento isn't doing, is straight up loaning money. They are leveraging already existing city assets, something that can't be said for Seattle 

Why don't you guise just have Ballmer pay for the whole project? 

 

[Deleted member 38182]

Ok... 7%... so what does that mean... ?

Means they have taken away Sacramento's opportunity to purchase that minority stake and have the ROFR.

In essence, he blocked one avenue Sacramento could use to block the sale.

But KJ says they will have a counterbid for the 7% still 

 

if its only $15m for that minority share, thats pretty low..

Hansesn cant have ROFR nor does it take away the other minority owners ROFR since everything is pending league approval and Hansen is 0% owner right now.

You are correct there.

Doesn't matter since Hansen's bid for the 7% will be matched by the other minority owners anyways.

 

[niketalker23]

Ok... 7%... so what does that mean... ?

Means they have taken away Sacramento's opportunity to purchase that minority stake and have the ROFR.


In essence, he blocked one avenue Sacramento could use to block the sale.


But KJ says they will have a counterbid for the 7% still 

 


if its only $15m for that minority share, thats pretty low..

Hansesn cant have ROFR nor does it take away the other minority owners ROFR since everything is pending league approval and Hansen is 0% owner right now.

You are correct there.

Doesn't matter since Hansen's bid for the 7% will be matched by the other minority owners anyways.

Pretty much..