Meet the new boss

Sacramento’s new top bureaucrat, John Shirey, is still unpacking his boxes. But he’s already elbows-deep in some of the toughest challenges that have ever faced the city.

Shirey is a strong advocate for redevelopment—he was head of the California Redevelopment Association when it sued Gov. Jerry Brown’s plan to eliminate redevelopment agencies this summer. The case is headed to the California Supreme Court.

He was also an outspoken critic of Kevin Johnson’s proposed “strong mayor” initiative, a stance that likely lost Shirey the mayor’s support for the city manager job, at least at first.

But Shirey and Johnson have been working closely together on the latest bid for a new, publicly subsidized, Kings arena. We sat down to talk about the costs and risks of the arena project, as well as Sacramento’s ever-shrinking budget, and his hopes for a better future.

The city council last month approved more than $500,000 for consultants to help with a new Kings arena. You recommended that. Are we ever going to see that money again?

I’m not going to kid anybody; it’s a difficult project. We don’t have enough of a corporate base here. If we had a much stronger corporate base, that would be a much easier project. But because we don’t have projects like that, we don’t have a strong corporate base. So this is a chicken-or-the-egg situation. You never know which comes first. But I think that for businesses and economic drivers to want to be here, you’ve got to offer more. One of those things might be an NBA team, one of those might be a venue where you can go see concerts. One of those might be a stronger downtown shopping area with more life and more housing. All of those things go together to make a destination. We’re not quite there yet. I can’t tell you yet whether it’s financially doable or not. But we owe it to ourselves to find out.

Is there any real possibility those consultants are going to say, “No, it won’t work?”

Yes. We’re not hiring people to tell us just what we want to hear. We’re hiring people to get at the answer. Is it feasible? Is there a way to get this done, given the limits in which we have to work?

Its purpose is to weigh the risk and decide whether that risk is worth taking. That’s what “due diligence” is all about. It’s not about somehow ginning up information that confirms what you’ve already concluded.

A lot of the arena process happened before you got into the job. But what do you think about how we got here?

I’m not second guessing it. In some respects, I don’t think we could do better than we’ve done. We should be grateful that [Anschutz Entertainment Group] is interested in doing a project here. They are one of the most impressive entertainment companies in the world.

We don’t have to be too grateful, do we? Presumably, AEG is interested because it could make some money.

Everybody is. Yeah. That motive is always the same. But they actually have the wherewithal and the expertise to pull it off. Whereas maybe others aren’t as capable.

Why is the city of Sacramento the only local government looking to kick in any of the “public” costs of an arena?

I would like nothing better than to see all the cities and the counties in our region come together and form an entity and everybody share in the public costs of this project. But I don’t see any willingness to do that.

Can’t you push for that? If that would better protect the city, and increase the chance of success?

I think all the other entities in the region are cheering for us for to be successful—while they are in the stands and we are out on the court beating it up and down the floor. They want us to be successful, but they aren’t opening their checkbooks.

One criticism you hear is that we don’t have $100 million to spend when we’re laying off cops and closing parks. Also, if we have $100 million to invest, is an arena really the only way to create economic activity?

First of all, I know it’s confusing to the public because to the public all money is money. They don’t distinguish between types of dollars that can only be spent certain ways and other dollars that can only be spent in other ways.

The general fund is where we pay for police and fire and parks and recreation and all those things that are normal city services. The council has made it very clear we’re not going to harm the general fund in order to do this project.

That’s why we’re looking at the parking option. That’s not going to be a capitalized asset that would allow us to hire more police officers. It’s one-time money.

The other part of it is, we’re trying to invest in order to get a return. So that we do have general fund expenditures for police and fire and parks and pools and all those things that people are unhappy about right now. There’s an old saying about how you have to spend money to make money. Well, when it comes to localities and governments, you have to invest in order to grow your tax base. You can’t harvest in the fall if you don’t plant in the spring.

As for the other part of your question, no, this is not the only option. Some could argue it’s not even the best option. But as we look at these different revenue options, that’s not wasted research—even if we decide not to do the arena project—because that’s information we have learned about out resources that could be applied to other projects. I don’t know what those other projects might be. Maybe a world-class theater project. Maybe it’s a new zoo. Maybe it’s another museum for our community.

I’m not going to say the arena is the only way to grow and to gain recognition as a place to be and a place to go to. But right now it’s the opportunity we have sort of partially in hand.

Sticking with economic development, do you know how to fix the Downtown Plaza?

I have ideas about that. I think a couple things are possible. I really do think that if we can do the arena project, that really will lead to different opportunities for the Westfield Plaza. I can’t say what those are, I don’t know yet. But I think there will be a catalytic effect there.

I also think we can’t think of Westfield Plaza as just, “How do we make that current shopping center prettier?” We have to rethink the uses of that land and that location. I think people smarter than me will come up with ideas about how to reuse that property, if we can get a few things to happen.

What does the next budget look like? More of the same?

We have more heavy lifting to do. We’re in this for another two years, at least. We have about a $25 million issue that we still need to address. I’m not seeing any signs that there has been any turnaround in revenue. No manna has fallen from heaven yet.

What else is there to cut?

Much of our budget is driven by personnel costs. Important parts of personnel costs are the costs of pensions and the costs of health care. We have to reduce those cost factors. I think it’s inevitable that we’re going to be looking at how it is that our employees are going to pay a larger share of their retirement. We’re going to be looking at retirement options, and we have to look at new ways of providing health insurance. And that’s going to mean negotiations.

The mayor did not initially support your hire. Does that bother you coming into this job?

If it bothered me a lot, I wouldn’t have taken the job. I certainly wish it had been a 9-0 vote. But it wasn’t. He’s been very clear that it wasn’t personal. I don’t know what his reasons were. But since I’ve been here we’ve worked together. Obviously, he cares about the arena project, and we’ve worked on that.

It is what it is. It’s my intention to work with him and all members of the council.

You asked for a provision in your contract that lets you out if the form of governance at city hall changes. So if the city adopts a strong-mayor system, do you anticipate not being here anymore?

I wanted to give myself an option, which is why it’s in the contract. If there’s a change in government, then that’s not the job I signed on for. So I’ll have to evaluate the situation at the time as to whether I stay or go, but I thought it was important that I at least give myself the option.