Sacramento's downtown Kings arena raises hopes, but is no slam dunk

Academic research has shown that publicly subsidized sports complexes built during the last half-century have not yielded economic benefits (more jobs, income or taxes) greater than their actual costs (higher city taxes and loss of alternative city services). Yet private consultants’ economic-impact reports still assert the opposite. That’s not surprising. These reports are commissioned by those who want to influence the public to get their project built.

Estimates of public cost to construct, maintain and operate sports complexes are underestimated. As Sacramento Taxpayers Opposed to Pork, or STOP, has noted, the final cost to Sacramento citizens of the guaranteed $258 million subsidy to the city’s entertainment and sports complex will be higher, because we may never realize the higher parking-, ticket-surcharge, and property and sales-tax-revenue estimates. Further infrastructure enhancements and environmental mitigation costs, which are currently not included in any calculations, will invariably drive costs even higher.

However, the sport complex’s indirect benefits could still tip the balance sheet in Sacramento’s favor.

Academic literature also shows that new sports complexes can revitalize a downtown business district and generate substantial benefits, if they are done in a certain way: Sports complexes must be surrounded by a host of amenities that will generate additional income and attract more people. L.A. Live, which surrounds the Staples Center in Los Angeles, is a great example, and this model should be adopted in Sacramento.

If we replace a substantial portion of the aging Downtown Plaza and build a complex whose architecture is open to K Street and the rail yards, this will generate the spillover benefits we need. Fans will take public transit, or park in existing lots, and walk to the sports complex—with many restaurant, entertainment and shopping options before and after games and at other times as well. This will revitalize K Street, spur redevelopment and make Sacramento a destination every day. Remember when K Street and Downtown Plaza were once both destinations? An appropriately constructed sports complex will bring that back.