Sacramento’s proposal to leverage parking to help pay for a new, downtown entertainment and sports complex is mostly uncharted territory. It would become the third major US city to outsource its parking. So far, the experiences have been vastly varied.
In Chicago, the city outsourced its parking on a 75 year lease in exchange for a one-time payment of $1.17 billion. With that money already spent, the private company making more than $32 million per year, and the city waiting 74 years before it receives any additional revenue from parking, that deal is largely viewed as a mistake. However, Indianapolis’s parking program is viewed as a success.
In 2010, the city outsource its parking services for a one-time fee of $20 million, plus a revenue sharing scheme for the length of the agreement.
Sacramento hopes that the two cases can help guide it in its process, which the city hopes will raise as much as $200 million towards the financing of the new arena.
From Atlantic Cities.com:
The Sacramento City Council voted recently to approve a plan to build a new downtown arena to replace the current suburban home of the Sacramento Kings. It’s seen as a major victory for Mayor Kevin Johnson – himself a former NBA player – and for the city’s downtown. But with tight budgetary times facing the city, a $391 million arena project is also a particularly costly venture. To pay for it, the city’s going to have to get creative.
The city’s share of the project – roughly $255 million – is expected to come mostly from revenue generated by city-owned parking. But waiting for parking meters to collect $255 million in quarters would take far too long to enable the quick development of the new arena, which officials need to get moving in order to prevent the team from pulling the trigger on a long-brewing plan to leave town. They’re hoping to have the new arena open for the 2015-16 season.
Read the full article here.