King's New Arena

Sonya Wall

Professor Ellerman

Business 345

March 23, 2014

Sacramento King’s New Arena

How much will the new Sacramento King’s Arena cost to build?

• The arena will cost roughly 448 million dollars.

What will happen moneywise after the arena is built?

• The entertainment and sports complex, when located downtown, is expected to bring over 7 billion dollars of economic impact to the region over the next 30 years.

• It will generate just over 157 million dollars in revenue for the entire region on an annual basis.

• Including 100 million dollars in downtown Sacramento.

• Also, 116 million dollars in the City of Sacramento.

• And, 131 million dollars in the County of Sacramento.

An Entertainment and Sports Complex can also help other business with financial issues, for example it will attract 3.1 million new visitors to Downtown Sacramento on an annual basis which causes hotels located within walking distance of the facility in Downtown Sacramento to see an increase of over 300,000 guest who choose to spend at least one night in a downtown hotel.

• This increases the money going into these hotels.

Fiscal benefits for government agencies created by 3.1 million new visitors will include approximately 6.7 million dollars annually generated by 5.8 million dollars in sales taxes and over 900,000 dollars in transient taxes.

Additional revenue would be expected to be generated by increase in other sources of revenue such as property taxes.

How will they receive that money?

Who they will get the money from?

• $448 million: estimated cost of construction for the new downtown Sacramento arena.
• $190 million: amount the Kings' new owners will pay for the construction of the arena.
• $258: estimated amount the City of Sacramento will pay for the construction of the new arena. The city has agreed to pay for the arena by selling real estate and leasing its parking operations.

Thats about 58 percent of the 448 million dollar price tag for the new arena.

In order to get the $212 million in cash, the city will have to sell bonds. All of the money will be paid back from the revenue the city collects from its parking meters, tickets and garages.

The remaining money needs will be covered by advertising, sales of public lands, and sponsorship campaigns.