New Sacramento Kings arena: AEG, for the win?

From NBA fans to business elite to Mayor Kevin Johnson and even state Senate President Pro Tem Darrell Steinberg, fingers are crossed that global sports and entertainment powerhouse AEG will finance and operate a proposed new Kings arena in Sacramento. And why not? After all, AEG and owner Phillip Anschutz are big-time players who’ve been credited with single-handedly revitalizing downtown Los Angeles.

Sure, the multinational firm recently—some say brazenly—took a bite out of a 40-year-old California environmental-protection law. But the economy’s boxed out, and Sacramento’s leaders say AEG’s arena involvement would be a slam-dunk win.

But it’s uncertain if the city holds any bargaining chips with AEG, or if Anschutz’s fouls are just too flagrant. The evangelical Christian billionaire was a major supporter of former President George W. Bush, funded Colorado’s anti-gay-rights ballot measure, produced the film version of Ayn Rand’s Atlas Shrugged, and spends hundreds of millions on the Foundation for a Better Life, a nonprofit group that runs right-wing public-service campaigns.

This past legislative session, AEG also flexed its brawn at the Capitol and ushered through two last-minute bills that some call “unconstitutional” and “AEG on steroids.”

Kathryn Phillips remembers when it all went down. The Sierra Club’s California director was inside the Capitol on a Thursday in September, the penultimate day of this year’s session, in a room full of environmentalists. Steinberg was set to introduce Assembly Bill 900, an eleventh-hour offering that would provide meaningful changes to the California Environmental Quality Act.

Actually, it was a bill very similar to Senate Bill 292, which exclusively granted AEG unique environmental streamlining for its proposed $1.2 billion NFL stadium, Farmers Field, in downtown Los Angeles.

But Steinberg was running late. In fact, he was around the corner at Mayor Kevin Johnson’s Think Big Sacramento arena press conference, explaining how “in these extraordinary times” the state must “do everything possible to focus on job growth and economic development.”

Phillips and others say S.B. 292 and A.B. 900 do just this—and at the expense of the environment.

Specifically, L.A.-based state Sen. Alex Padilla’s S.B. 292—everyone calls it “The AEG Bill”—gives the firm a special process for environmental review of its planned NFL stadium. The most contentious point is that it allows AEG to bypass the California Superior Court and bring all CEQA lawsuits and challenges in front of the court of appeals.

AEG argues that this is necessary to get the project done on time, avoid frivolous lawsuits and remain competitive in moving a team to Los Angeles. Sierra Club’s Phillips says it severely compromises CEQA and the public’s ability to enforce the state’s environmental laws.

A.B. 900 takes “The AEG Bill” a step further, and gives Gov. Jerry Brown authority to select a couple of dozen $100 million, high-job-growth eco-friendly projects from an applicant pool for similar CEQA exemptions. The law also charges developers a fee to expedite a project’s administrative record, most say this is good and allows the public a real-time peek at an environmental-impact report. The bill passed the Legislature, but its doubtful most lawmakers had time to read it.

“I don’t think that bill was seen at all, in any draft form, more than 24 hours before the end of session,” said Planning and Conservation League director Bruce Reznick.

“And the more I learn about A.B. 900,” Phillips told SN&R, “the more I realize it has some major problems.”

Reznick also says the two bills “very possibly are unconstitutional,” because of the Legislature’s infringement on the judicial process. The bills become law January 1, 2012, but so-called clean-up legislation won’t be passed until next session.

Meanwhile, the governor’s office will issue guidelines in the next month to clarify what projects will be eligible under A.B. 900. A Capitol source noted that it won’t be big oil refineries or power plants, but instead clean-manufacturing facilities and renewable-energy projects, such as solar and wind projects.

And, yes, possibly even infill projects like the proposed Kings arena in Sacramento’s downtown rail yards.

AEG and other Anschutz subsidiaries ramped up their political contributions in the past 10 years, giving more than $8,000 to Steinberg and $10,000 to Padilla, according to the Secretary of State’s website. He has given more than a half-million dollars to California lawmakers and ballot measures since 2008.

Surely, it can afford the lobbying. AEG is the largest sports firm in the world. The company owns part of the Los Angeles Lakers—and the team’s home court, the Staples Center—plus multiple soccer and hockey teams and arenas worldwide, including London, Turkey and China. AEG also puts on events—such as the world’s largest festival, the Coachella Valley Music & Arts Festival—and is the second-biggest concert promoter in the world, after Live Nation.

Phillip Anschutz first became one of the 50 richest people in America off of land and oil. In addition to AEG, he also owns or partially owns Regal Cinemas, Union Pacific, Forest Oil and the Weekly Standard. The billionaire is a far-right conservative philanthropist, and as a political donor helped fund President Bush’s election and Colorado’s 1992 anti-gay constitutional amendment, which passed but was later overturned by the U.S. Supreme Court (he did not give in support of California’s 2008 measure Proposition 8).

AEG and sister company AEG Live are privately held and apparently do quite well; it produced the top-grossing concert tour of 2010, Bon Jovi, with revenues of $201 million. AEG Live was supposed to produce Michael Jackson’s 2009 London comeback shows and tour; Jackson’s mother is now suing AEG for causing his death.

Here in Sacramento, the mayor, Think Big Sacramento co-chairman Steinberg and others are currently in talks with AEG to operate and be a lead investor in a proposed new sports and entertainment arena on the rail yard property near H and Fifth streets. AEG paid Kansas City more than $50 million in upfront construction costs to operate its Sprint Center for 35 years in 2005.

A new downtown arena would cost nearly $400 million to build, according to Think Big estimates, and would need the use of both public money and land. And maybe even A.B. 900.

Should Sacramento be wary of using taxpayer dollars to partner with AEG?

“Yes,” offered PCL director Reznick. “It’s pretty brazen when folks come in and say, ‘My company doesn’t have to comply with the law.’”