City treasurer says new development around arena will only generate $2.7 million in tax revenue

“Duhhhh.” That’s Sacramento Bee columnist Marcos Breton at his bullying, name-calling best last week, mocking those oldsters who are pushing for a public referendum on the city’s arena subsidy. “Einsteins,” he called them.

“Duh,” is, of course, the official all-purpose comeback for arena bros in most circumstances. The four h’s just give it the extra dickishness called for on that particular occasion, which was the Sacramento city clerk’s decision to reject more than 22,000 signatures in support of an arena vote, due to technical errors in the petitions.

Equally classy was city Councilman Steve Hansen’s taunt of an irritated District 4 resident on Twitter around the same time: “yeah, too bad following election procedures and the law got in the way… #whoneedsstinkingrules.”

Hansen’s zinger shows a real flair for constituent relations—it was retweeted like crazy by his supporters in Citrus Heights and Roseville. But Bites isn’t so sure about his claim regarding “the law.”

In fact, as Nick Miller reported here, the city attorney found that the petition errors by Sacramento Taxpayers Opposed to Pork are likely not a solid justification for the keeping the measure off the ballot. But the petition rejection is the best shot city brass have at keeping voters sidelined. The city clerk’s decision was really more about strategy than “the law.”

Hansen knows all that, but when asked, he said it would be “illegal” to discuss the city attorney’s analysis.

Bullshit. And when the city starts disenfranchising people based on election law, the people ought to hear the full version of the legal advice we paid for.

It’s OK, it’ll come out. Lawsuits have a healthy way of churning this stuff up. For example, attorneys suing the city over the arena subsidy are circulating an interesting email from Kings attorney and Kevin Johnson bud Jeffrey Dorso, sent to Assistant City Manager John Dangberg last spring.

Dorso sent Dangberg a document with several bullet points describing the economic benefits of a downtown arena. Dorso’s document was then used, almost word for word, in the arena term sheet approved by city council last year.

Bites knows that the term sheet was more advertising than analysis. And by now we all know that maintaining a line between private interests and the public’s business is kind of an old-timey notion for the would-be world-class city of Sac.

But are the relationships maybe a little too cozy when the Kings organization is literally writing policy for the city council to approve? And since we’re paying Dangberg $189,000 a year just to work on this arena thing, why does he have to crib from the Kings lawyer?

A while back, SN&R asked the city for estimates of how much new tax revenue the promised, ancillary downtown development around the arena would generate. The answer was no.

When city Councilman Kevin McCarty asked for the same information, City Treasurer Russell Fehr decided to oblige.

Fehr’s memo indicates that if all of the ancillary development promised by the Kings surrounding the arena is actually built, it will generate approximately $2.7 million in additional tax revenue every year.

That includes an additional $1 million in property taxes, $1.1 million in utility tax and $845,000 in hotel tax.

The estimate also includes a net loss of $255,000 in sales tax. Surprising but true, all of the development that we’ve been told will absolutely transform our downtown will actually generate less sales tax than the crappy dead shopping mall that is there now—according to the city treasurer. But what does he know?

Without the additional promised development, of course, the sales-tax hole will be deeper. Either way, the new taxes still won’t come anywhere close to the $20 million or so it will cost to pay the arena bonds annually.

There has been a lot of speculation about all the additional downtown projects that might one day be catalyzed by the arena. But there aren’t any plausible scenarios in which the city recoups its investment in additional taxes.

And since spurring development around the arena is the city’s No. 1 most important stated policy goal for the building arena, Bites keeps asking why, why, why on Earth would we not get a written guarantee of what development is going to happen and when it is going to happen?

“Because we didn’t get it,” Dangberg replied last time Bites asked, as if it were the dumbest question ever.

We didn’t get it because the Kings don’t think it’s in their financial interest to put that promise in writing. So, no promises.

But please, if you find yourself debating arena subsidies online or with friends, don’t bring any of this up. It only reveals that you are old and you hate jobs and want downtown to remain a bombed out, urine-soaked—mildly tax generating—eyesore. Duhhhh.