I'm here for one last blog today to talk about this article, which touches on just how important certain real estate can be to the welfare and identity of a city. The article talks about the groundbreaking of a new arena for the Sacramento Kings, the only professional sports franchise in the city.
The history behind the building of the new arena is complicated and dramatic, but an integral part of the reason this new arena is under construction in downtown Sacramento. Before 2013, the Kings were owned by the Maloof family. The Kings have played in the Sleep Train Arena since 1988, but in the late 2000's, the Maloofs began to become very unhappy playing at what they considered to be an aging, ugly liability of an arena. They began to threaten the city that they would move if they didn't get massive amounts of public funding for a new arena immediately. The city council dragged their feet on that demand, to the point that the Maloofs sought permission from the NBA to immediately relocate to Anaheim at the end of the 2010-11 season. Although the NBA denied the petition for relocation, the Maloofs then began the process of selling their stake in the team. The first serious bid to become public was from hedge fund manager Chris Hansen, who intended to move the team to Seattle should he end up buying the team. Seattle was offering a good amount of public funding for a new arena. However, the NBA denied the sale to Hansen, and the team ended up being purchased by a group led by Silicon Valley tycoon Vivek Ranadive, who promised to keep the team in Sacramento, but insisted upon building a new arena in town. In fact, the agreement with the NBA said that they had until the 2017 season to build a new arena, or the NBA would buy the team and immediately move it out of Sacramento, so obsolete is the Sleep Train Arena.
I like to think that at that point, the city of Sacramento realized the lesson they needed to take from what happened to Seattle. The SuperSonics lobbied for public funds for a new arena for years, but never got it. Unsatisfied with their prospects in the city, the SuperSonics were sold to a new group that immediately moved them to Oklahoma City to become the Thunder. Since then, Seattle has been trying to get any NBA franchise they can, luring them with the money they never wanted to give the SuperSonics. Presumably, Sacramento didn't want to become the next Seattle, and thus decided to give $255 million to the Kings for a new arena in order to keep them.
Sports franchises, and especially their arenas, have a huge financially impact on the areas in which they are located. I know that the sports bars and other restaurants around the Quicken Loans arena in Cleveland lost a noticeable amount of business when Lebron James left in 2010. Additionally, Irving, Texas lost a good deal of jobs and several Cowboys-centric businesses folded after the Cowboys left Texas Stadium for the new AT&T Stadium in Arlington. Thus, Sacramento likely didn't want to willingly inflict such losses upon themselves by effectively driving away the Kings.
Additionally, the construction of the new arena will directly add 3,000 jobs to the city. With all of the new retail and food service businesses that will be going in to the plaza around the stadium, many hundreds of other jobs will be created as well, with those jobs being more long-term than the construction jobs. Lastly, the new arena is being touted as the jumping off point of a much larger-scale revitalization of downtown Sacramento, meaning that many many more jobs will be created in the coming years, amongst other economic benefits. It will be interesting to see the new arena, as well as its overall economic impact on Sacramento, in the coming years and even decades.
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