The downtown arena under construction on Friday, June 12, 2015, in Sacramento, Calif. Randy Pench rpench@sacbee.com
The downtown arena under construction on Friday, June 12, 2015, in Sacramento, Calif. Randy Pench rpench@sacbee.com

Arena

Councilman says no secret subsidy in Sacramento arena deal

By Tony Bizjak

tbizjak@sacbee.com

June 25, 2015 05:39 PM

UPDATED June 26, 2015 06:56 AM

Sacramento City Councilman Steve Hansen on Thursday called the allegations that the city gave the Sacramento Kings a secret subsidy “outlandish” and “a little bit of tinfoil.”

Testifying on the fourth day of a Sacramento Superior Court trial into the inner workings of the city’s half-billion-dollar 2014 downtown arena deal, Hansen offered a markedly different take than one provided on the stand the day before by a former council colleague, Assemblyman Kevin McCarty.

McCarty, the council’s harshest critic of the city’s plan to subsidize the new downtown arena, said he suspects the city secretly helped an investor group buy the Kings by throwing sweeteners into the arena deal without telling the public about their value.

At issue are billboard rights and underground parking spaces the city gave the Kings as part of the complex deal to keep the team in town, in addition to $255 million in cash and land value. McCarty and the plaintiffs in the lawsuit, three city residents, argue the city should have put the estimated value of those assets on paper when the deal was made public.

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City officials say they hid nothing, pointing out that they listed those deal points in public documents prior to council votes, and described them in public meetings. They say they did not place a value on what likely will be 2,700 underground parking spaces next to the arena because, according to a consultant’s report, those garages are in need of so much repair that they would not have generated any value to the city in the coming decades if they remained in place serving the failing Downtown Plaza.

McCarty, who said he did not recall the details of that analysis, said it is “preposterous” that the parking spots don’t have value. Hansen and Councilman Allen Warren, who also testified Thursday, said they read and accepted the consultant’s analysis.

The city did not put a price on entitlements it gave the Kings to erect six billboards near freeways because the city was not using those sites and did not have plans to do so, city officials said.

Hansen, Warren and McCarty all testified that they never heard anyone at City Hall or with the Kings say that there was a secret deal.

Hansen, a deal skeptic early on, said he had concerns about the deal terms, but dismissed McCarty’s worries about hidden value.

“In the forest of this deal, that question was one tree,” he said. “I discredited this one .. it did not align with the facts presented to me. It seemed outlandish, to be honest.”

Hansen said he was more worried about how much bond debt the city would be taking on to finance its part of the deal, and the effect the deal might have on arts funding. He ultimately voted in favor of the plan.

The plaintiffs’ attorneys, Patrick Soluri and Jeffrey Anderson, continued to focus attention Thursday on whether the city failed to protect the public interest by allowing an outside attorney into the inner workings of the deal.

That attorney, Jeff Dorso, initially worked with Think Big, a group that Mayor Kevin Johnson helped form to galvanize public support for keeping the team in town. Dorso worked frequently with city officials working on the arena deal. Dorso later took a job as attorney for the Kings while final negotiations between the Kings and city were still going on.