Sacramento might host the NBA All-Star game in 2022 or 2023. Just ask Vivek Ranadivé, the owner of the Sacramento Kings, and Christopher Lehane, Airbnb’s head of global policy & public affairs.
“It is a chance for Sacramento to continue its transformational economic development and showcase world-class sustainable efforts and the loudest fans in the NBA,” they opined in The Sacramento Bee. “We think it is a slam dunk.”
Why are their hopes high? The gravy train is rolling and the duo like that. The Kings, a perennial NBA Western Conference cellar dweller, received a robust hand from the taxpaying public to build the Golden 1 Center, the team’s downtown arena that opened in 2016.
The economics and politics of this sports arena opening reveals the vital role of government in private wealth-creation. Former two-term Sacramento Mayor Kevin Johnson, a retired NBA guard and full-fledged member of what Black Agenda Report editor Glen Ford calls the African-American political mis-leadership class, led a campaign to prevent a public vote on this public subsidy for a basketball arena. It was a success—for some, not so much for others.
Consider this. “Eye on Sacramento (a budget watchdog group) calculated that the city taxpayers’ total subsidy of the new arena amounted to $333 million – not counting $350 to $400 million of future interest payments on the city’s $300 million arena bonds,” according to Craig Powell, the group’s president.
This public subsidy to an NBA franchise has in part helped Ranadivé to amass a net worth of $700 million. It is nice work if you can get it.
Meanwhile, downtown and the adjacent Midtown Sacramento is gentrifying. New apartments and restaurants are open. Taxpayers invest in non-public real estate such as the Golden 1 Center that reaps private profits. A Forbes reports details the proverbial bottom line.
“Downtown property sales have totaled nearly $885 million since Golden 1 Center construction began. In the last year, 11 downtown properties with more than 1.3 million square feet of space sold, totaling approximately $359 million.”
What preceded this? The answer is displacement of low-income people. Take the closing of a single-residency occupancy rental property such as the downtown Senator Hotel. On paper, the former SRO tenants there were to move into other rental units; however, there were tenants occupying them, according to Veronica Beaty, policy director for the Sacramento Housing Alliance. Did someone say shell game?
Meanwhile, downtown and Midtown Sacramento renters are struggling to find affordable housing. When supply drops, demand and prices rise. This is not theoretical physics, folks.
“We have seen the highest rent increases in the nation,” Beaty said. “It’s not fully attributable to the Golden 1 Center, but that has put pressure on our affordable housing stock.”
Welcome to the economics and politics of neoliberalism. The well-heeled demand and receive via government public dollars for private wealth-creation. The Sacramento City Council “attracts” investment of multi-millionaires like Ranadivé through taxpayer-funded projects such as the Golden 1 Center where the NBA Kings play.
Low-income people get higher rents. What is not to like for real estate investors? Such “transformational economic development” profits them to no end. Call it a slam-dunk.