This design is for entertainment purposes only
Sacramento Mayor Kevin Johnson spoke about the progress on the arena project at his weekly press conference on Tuesday and one factoid in particular caught the ear of this author:
“Design work for the new arena has yet to begin.” Say what???
That bit of information was so striking to me I thought it must have been a misquote. Once I saw it reported in two separate media outlets though, I knew it was true. As reported on KCRA:
“Johnson said, in addition to the March 1 deadline set by the NBA, the city also faced a sense of urgency to begin designing a new arena within the next 30 days to have it completed in time for the 2015 NBA season.”
And on Sacpress:
“In order to complete the arena by 2015, Johnson said design work must begin within 30 days.”
MUST BEGIN. With that information in hand I ask that you consider this; how can anyone possibly know how much the construction of the arena will cost when all is said and done? Is the widely touted $387 million dollar figure even realistic? What happens if there are cost overruns? Who would be responsible for making up the difference?
Before you decide that I am being pessimistic for thinking that cost overruns will occur, I would like to point out a statement made by Marcos Breton on his Facebook page this week:
Yes, we have reported the price tag going from $387 million to $407 and I guarantee you it will go up even higher, I’ve written that.
And;
I think it could be good for Sacramento, but I do feel – and have written – that the city cannot be expected to use its general fund to back up any cost overruns.
So, let me summarize my points here:
- The proposed arena which has been advertised to cost $387 million has yet to be designed, bring into question how realistic that figure can even be.
- One of the writers closest to the project, Mr. Breton, has guaranteed that the costs will go higher.
- No one yet has said who would be responsible for those inevitable overages.
These might not be such big deals, if not for the fact that the NBA deadline is now only a week away and the public has yet to be made available a copy of the financing plan. As Charlie Brown so often said, “Good Grief!”
Comments
Powered by Facebook Comments
Related posts:
Pardon me while I put my teeth back in…. SAY *WHAT*?????? YOu mean all those pretty pictures and such AREN’T the design, and David Taylor’s cost proposal — the deliberately lowballed one that lacks infrastructure, Maloof debt, and contingencies — is based on NOTHING????
This reveals why Taylor’s proposal was eschewed by banks — when anyone, even a big dig developer, seeks bank funding, one MUST provide working drawings, and not just a few sketches in color from an AUTOCAD machine….
I realize that Taylor’s costs lacked infrastructure which the banks are keenly aware of, but THIS????
IS THERE NO END TO THE LIES BEING TOLD BY THINKBIG AND KJ AND HIS BANDWAGON OF SCIENTOLOGY FOLLOWERS????
Yeah, I wrote about that last week too:
http://devinlavelle.com/2012/02/16/what-to-look-for-in-the-arena-term-sheet-to-know-if-its-a-rip-off/
The arena will end up costing north of $400 million. Probably not to far north, but I guarantee it, the $387 million number is not going to hold. How that is dealt with is one of the key details I’m looking forward to seeing laid out.
http://www.capitolpfg.com/The%20Threshold%20Report.pdf
Read the above document starting around page 17 to see where the cost estimates come from.
Thanks Geoff. That helps to clarify why the estimates, while not unjustified, are probably low. You’ll notice that the more recently they were built, the higher the inflation adjusted cost per square foot is. Construction materials and energy costs, that are a huge portion of the cost, have increased at greater than the rate of inflation over recent years.
Another factor is that is missing is the increased cost of doing business in California, mostly due to a higher standard of living and increased demand in our great state, but also partially due to regulations and tax policy.