Projected Sacramento City Taxpayer Cost of Creating Each Local, Temporary Arena Construction Job: $993,850

The City of Sacramento released yesterday its draft environmental impact statement on the proposed sports arena.  As reported in the Sacramento Bee, the city’s EIR finds that 1355 temporary jobs will be created by the construction of the arena.  With 60% or 813 of those jobs expected to be local jobs according to recently approved City hiring goals, the cost to city taxpayers of each temporary local construction job created by arena construction, based on a total public cost of $808 million, comes in at a shocking $993,850 per temporary local job created.

The $808 million total public cost of the arena represents: (a) total arena bond payments of $770 million, per Goldman Sachs March projections of total payments on a $304 million arena bond; plus (b) the City’s own $38 million lowball estimate of the value of its give-aways to Kings owners. EOS estimates that the value of City give-aways to the Kings owners amount to $92 million.  If EOS value estimates of the City give-aways are used in the calculation, the taxpayer cost of creating each local temp job rises to $1,060,000 per job.

In other words, if the proposed arena deal moves forward as planned, each temporary local construction worker on the project could be accurately characterized as a “million dollar temp” in terms of taxpayer costs.

According to a statement from Stanford economist Roger Noll earlier this year, the average public cost per permanent job created by an urban renewal project is between $10,000 and $15,000 per job.  The public cost of creating each temporary local construction job under the arena deal is therefore 54 to 81 times higher than the average public cost of permanent jobs created by urban renewal projects.

*  *  *

The Mission of Eye on Sacramento is to work for integrity, transparency and effectiveness in Sacramento local government by educating the public and promoting the broad public interest.