"The CEAV Amendments" - augmenting arena financing potentials.

[note: The CEAV Project takes no position regarding the design, location or financing of a proposed new sports-arena for Sacramento. However, since Cal Expo has repeatedly conjoined arena proposals with opening its land to private development, some discussion of arena issues can not be avoided. CEAV's first concern is that no land currently held by Cal Expo be offered for private development. To that end, CEAV has suggested two methods which could be used in conjunction with arena planning that might remove the need to add public commons land as a means of financing the arena project. These are briefly outlined on this page.]

[The CEAV Amendments have been sent to 'Sacrament First', the Mayor, and City Council members. You can do your part and also contact them and let them know these options for financing should be seriously considered.]

1. "The National Sports Education Center" (NSEC) -

Enhancing the value and financing potentials of a sports-arena/entertainment-complex
for Sacramento.

Applicable to any proposal, the addition of a 'National Sports Education Center' * could enhance both the public interest value and the financing potentials of a new Sacramento sports-arena/entertainment-complex.

The NSEC would be a multi-use facility for showcasing a variety of sports-related activities, products, services and practices. New/advanced products and product ergonomics, films, general sports exhibits, sports-medicine exhibits and clinics for sports-health, physical fitness education programs and clinics, general sports-education and promotional showcasing and presentations could all be hosted at such a facility. A 'sports-jobs bank' could be included, where people could seek jobs and get advice on careers in the sports industry.

Envision a facility for showcasing the entire range of sports in ways as exciting and forward looking as, say, the new California Academy of Sciences does for science and technology. Conceived as a world-class, world-hub of sports-related interests, the NSEC Would offer a number of opportunities for enhancing and extending the potentials of any of the sports-entertainment proposals that have been submitted:

a. It opens a second and complementary underwriting potential to traditional private-development financing. Major national and international commercial sports enterprises (Nike, Jaypro, Wilson, etc.), sports-accessory manufacturers, sports-fitness equipment, many of the sports franchises and similar ventures, would all have a decided interest in underwriting its development and exhibiting/participating at such a facility. There are many sports-trade shows around the country; however, to date, there is no single, major permanent facility that is identified with the leading edge offerings of the industry.

b. As a multi-sport facility, introducing and selling new products, offering-sports related classes and clinics, hosting sports films and special events and hosting a variety of other activities it could make well become a 24/7 year-round destination for all types of sports-related interests. The NSEC could easily be a natural destination for anyone visiting other nearby facilities and would serve to invite a significant pedestrian population to use it and to visit other downtown venues.

c. Revenues from the NSEC could substantially enhance the general revenues anticipated by any proposal. In addition, if the NSEC and the main arena complex were physically conjoined in concept and design, underwriting for the NSEC would simultaneously underwrite at least part of the build-out of the arena complex. Not only could the inclusion of a major NSEC facility in an arena proposal enhance the interests of the specific plan-associated financing structure, but could serve to interest many other investors and funding sources in the project. An NSEC facility adjunct to the main complex might, indeed, catch the interest of investors who would not otherwise be interested in underwriting sports-complexes.

d. The NSEC considerably broadens the base of public interest by serving the general public interest in all areas of sports and does not tie a proposal to only one or two sports activities. It not only engages the interest of the public as spectators, but as consumers and participants in sports-related activities as well.

There is much more that could be said about the NSEC concept. For now, we think it would be a win-win-win accessory to any of the main proposals and ought to be given serious consideration. For that reason, CEAV releases this idea to all and any who are engaging the matter of arena development, in whole or part, and in any way they see fit. We have suggested, very briefly, this same idea to the 'Sacramento First' task force. We do plan to follow up by sending them this description as well; and hope that they will find it interesting enough to take special interest in any proposal which includes similar concepts in its offering.

[*note: there are several existing facilites that use the name "National Sports Center" which was our first name choice. We use 'National Sports Education Center' here only as a working-title that will likely have to be changed. The NSC venues appear to be of two types: 1) a compendium of sports venues, soccer fields, tennis courts, ball parks, etc.; or, convention and meeting facilities. There seem to be none, that we have found, which include the type of facility described above. And none, as far as we can tell, that have actually become identified with being the global-hub and destination of a general sports education/advanced-product technology and exhibit center of world-class reputation that we think this amendment can become. We believe that the NSEC description is a market vacancy that is, to date, empty and waiting to be filled. - The CEAV Project ]

 

2. "Financial Planning and Large-Scale Urban Projects"

"A brief look at an alternative to traditional financial planning processes which risk having financial-packages adversely impact concept,design and location considerations.

The CEAV Project suggests that financial planning and underwriting of large scale projects is often done at the wrong time in a project's history, conjoined with decisions about the plan itself or, sometimes, done before project goals and design plans are even considered. In either case, we believe this distorts the development process and impairs selection of the best-project/best-design in the final decision. Often, it may lead to an outcome of the tail (financial packages) wagging the dog (the actual project mission, location and design). As important and critical as financial underwriting is, it is really a separate issue. Once the desired goals, site and other design elements are in place (which may describe multiple possibilities and be arranged in choice-priorities), the search for a financial package to realize the project can be undertaken with far more opportunity and confidence, and with far less dependence on a single developer's contacts and alliance with potential investors.

This certainly seems to be the case with the selection and financing of a sports arena for Sacramento. As a case in point, Cal Expo's failure to bring its initial plans to fruition were largely the result of designing a financial concept with the NBA before any mission or design statements had been finalized and, only then, trying to hammer a conceptual plan into a shape that would fit their financial package. It was, indeed, the tail wagging the dog, and their plans collapsed for that very reason. In fact, their current 'land-swap' offering is, in reality, a continuation of that process.

Regarding the 'Sacramento First' selection process, winnowing and ordering the top arena plan choices before financial plan review would not only allow focus on the best design choices from the outset, but also might considerably open the field for investor potentials to realize the project. Indeed, any or all of the original candidates might be invited, after project plan selection, to consider and offer their individual financial plans as adjunctive support to whatever design is selected. The developer for the chosen plan would, of course, enjoy the profits of actual development. However, the others - those not selected - might still earn attractive commissions for securing and reassigning their investment sources/plans as adjuncts to the chosen plan.

In addition, treating financial support as a second step in the process permits a whole new draft for investment interest and the crafting of a final financial package that supports the best design and siting, rather than the other way around. This would seem to be a win-win way to approach the matter; certainly one more likely to result in a final plan that is not only the best, but also has the strongest backing and support possible.

True, this is not the traditional way of doing development. Still, the weaknesses resulting from traditional processes that consider financing and design within the same framework from a single developer can be easily seen. We would also point out that the processes Sacramento is using (e.g. 'Sacramento First') to get this project done are not exactly traditional. They were created to overcome obstacles that had accompanied traditional planning and bidding processes on several previous occasions . The method of treating design and financial aspects of a project separately should also prove to be way of avoiding some of the obstacles that have been encountered in the past.

- The CEAV Project