Today, I saw an unbelievable story. Did everyone see that the NBA’s Sacramento Kings Arena, the Golden 1 Center, was continuing “to stand as a powerhouse contributor to the economic vitality of the Greater Sacramento region metropolitan area”? This report included all sorts of massive numbers that really stunned me. Who knew that the team and arena had contributed in 2022-2023 alone about $665 million to the city? Who could have imagined that the arena would today be an “economic boon” to the local business community? The answer is nobody. Nobody could have seen the arena doing this. Why? Because it isn’t. Whatsoever.

First, the report is a laugh. The high economic success numbers are not backed up with any hard facts. The report discusses all of these fantastic additions that the arena has created yet does not explain where they actually are in today’s world. Massive job growth? Where? These insane contributions? Where? Simply showing that the city was one of the 40 best for concerts and events does not prove economic greatness. Go read the report yourself if you are curious.

Second, Applied Economics wrote this report. You remember Applied Economics, don’t you? The same group who routinely tell cities that whatever sports venue they are thinking of building will be a gigantic success! No matter what! This company’s track record is terrible. One city Chamber of Commerce member admitted that what Applied Economics wrote for them was “fairly limited” and did not include basic research, like including any indirect economic benefits. So the Chamber of Commerce asked another company to write their report. Or how about when 22 actual economists wrote an article in an Oklahoma City newspaper laying out just how poorly the Applied Economics study was from a numbers’ perspective.

Third, this report claims that the arena was created an “economic ecosystem” due to “significant contributions”, job creation and “growth to the Greater Sacramento region”. As I said at the beginning of this article, nothing that was just written was shown to be actually true in the report.

• They do not show that jobs went skyrocketing upwards from the arena.
• They do not show what or where these “significant contributions” are due to the arena.
• They do now show what growth they are referring to with the city.

So what has the arena actually done for the city? Let’s find out.

Let’s start with who must pay what every year. Currently, both the city and team have yearly bond payments to make that total $18 million. The city is obligated to pay $10 million and the team must pay the remaining $8 million. The city uses money from parking revenues to pay for this payment. Yet, several months ago, the Sacramento Bee found out that the city was “forced to use money from (the) general fund to pay off Golden 1 Center bonds”. What happened? When the city was trying to get the arena approved for construction, they promised taxpayers that parking revenues would cover the arena construction payments.

Guess what?

“The city of Sacramento’s plans to use parking revenue to pay off $273 million in construction bonds for Golden 1 Center has developed funding cracks, forcing officials to use money from the city’s general fund, a pot of money that also pays for homelessness services, libraries, and parks.” — Sacramento Bee, 10/19/23

It isn’t just this year, either. The city has now used almost $6 million dollars from the general fund to pay off arena bills the last two years. This isn’t the only time that the city has dipped into the general fund for the Kings. In 2020, due to the Kings not playing a full home schedule, the city was allowed to lower its bond payment to the team. Yet even that lower amount that the city gave the team included $800,000 from the general fund. Don’t blame COVID-19, either.

As the Sacramento Bee found out, a parking revenue shortfall existed for the city “even prior to the pandemic”. Thankfully, the city did come out and claim that there was an ending in sight to this parking issue…and that will happen at some point in 2029. But the future must look bright, right? I mean, the arena is creating economic salvation for those around the building according to Applied Economics.

“More diversions from the general fund to pay for the bonds are likely to take place over the next several years. The city projects a parking revenue deficit as it relates to the bonds of $7.12 million between fiscal years 2023-24 and 2027-28.” — Sacramento Bee, 10/19/23

Didn’t arena critics foresee this exact issue in 2013-2014 when the deal was being discussed publicly? Why yes, they did. Not to worry, though, as “city officials…insisted it wasn’t likely” that the city would ever need to dip into their general fund since parking revenues would always cover the yearly bond payments. You see, the arena deal “protects the general fund” as arena supporters claimed in 2013. How could they say this? Because the city claimed that parking revenues are “almost certain to grow and generate more money over time”. Nailed that prediction.

Hopefully, the city can keep their head above water. And hopefully the Kings won’t forget to pay rent…again. Last thing, if you lived in Sacramento during 2013-2014, a lot of these economic glory promises should sound familiar. As one site in 2013 wrote, how much was the city going to generate from a new arena? “Billions and billions”. $7 billion over 30 years to be exact…at a minimum.

“$7 billion is probably a conservative number. It will absolutely transform Sacramento” — Joshua Wood, Region Builders Director (a group formed by the team)

Even better, if the new arena was built in 2013, the city would see $100 million in new revenue annually. At the end of the day, building this new arena will “provide a lot of money to the city” along with “massive financial returns”.

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