Sacramento Told It Will Cost $172 Million to Get Raiders

SACRAMENTO — “It’s ours to lose,” developer and promoter Gregg Lukenbill said Friday in describing this city’s chances of luring the Los Angeles Raiders to a new stadium Lukenbill and his partners want to build on a flood plain north of downtown.

But Lukenbill told a crowded news conference at the Sacramento Metropolitan Chamber of Commerce that the Raiders would probably come only if the city and county of Sacramento agree to the $172-million deal, including a publicly financed $50-million “franchise inducement.”

“If the city and county step up, the sports association will be there,” he said, referring to the Sacramento Sports Assn., a group of local developers and businessmen that proposes to build a $100-million, 72,000-seat stadium for the Raiders and a hoped-for major league baseball team.

Lukenbill’s group also owns the Sacramento Kings of the National Basketball Assn., and he is the managing partner. The Raider lease at the Los Angeles Coliseum expires after the 1991 season, and Al Davis, managing general partner of the organization, has been discussing a possible renewal with the Coliseum Commission but also has been negotiating with Oakland and Sacramento.

Urges Approval

Lukenbill called on the Sacramento City Council to approve the $50-million payment to the Raiders by Sept. 12, saying “only this stands in the way at the moment.’

The $50 million would come from bonds to be issued by the city and county and paid back from a variety of new and existing taxes. Interest on the bonds would be $122 million over a 20-year period, City Treasurer Tom Friery said, so the total city and county investment in bringing the Raiders to town would be $172 million.

Until recently, Lukenbill and his associates had indicated that they would pay the entire cost of building the stadium and bringing the team to the capital.

But a month ago they decided that this approach “didn’t pencil out,” as Lukenbill told local news media, and they asked the city and county to put up most of the “franchise inducement” money that would go to Davis and his Raiders’ partners. The Raiders, in return, would have to agree to play all their home games in Sacramento for 20 years or return the $50-million cash inducement.

At a City Hall news conference directly preceding Lukenbill’s, Sacramento City Manager Walter Slipe said he and County Executive Brian Richter had concluded that paying the money to Davis and the Raiders was a “good business transaction.”

Slipe said a study by a Chicago research firm that specializes in sports economics found that a National Football League franchise would produce more than $1.3 billion in economic benefits for the Sacramento area over the next 20 years.

More Than Make Up

Friery said the economic gains would more than make up for the $172 million in proposed public spending.

But opposition to the proposal surfaced immediately.

Sacramento Mayor Ann Rudin said in an interview that the offer to the Raiders is “too generous” and added, “I want to be sure they indemnify the city against any possible losses.”

“I want to see the terms; I want to read that contract,” Rudin said. “I don’t want to enter into any agreement with Al Davis without knowing a great deal about what’s in that contract.”

The mayor said Slipe’s suggestion that the city put up its private-plane airport as collateral on the deal was not acceptable.

‘That’s our property; why should we put that up as collateral?” she asked. “I want them (the sports association) to put up the collateral.”

“I think everybody wants the Raiders here, but I’m not willing to mortgage the farm,” the mayor added.

Slipe said the City Council will discuss the $50-million “inducement” next Tuesday and asked for “conceptual agreement” at the council’s next meeting, Sept. 12.

Repayment Plan

The city-county proposal urges that the $172 million in payment and interest be repaid by a new 5% tax on tickets for all “live events” in the city, including professional sports, concerts, plays and rock music presentations; by a 1% increase in both the city and county hotel tax, and by committing property taxes that would be paid to the county by the stadium management for the next 20 years.

He said the debt could be repaid “without affecting any ongoing city programs.”

Lukenbill, whose group brought the pro basketball Kings to Sacramento four years ago, said also that importing the Raiders would enable the state capital to “climb out of the big shadow of the coastal cities of California.”

He said Sacramento would become a “world-class sports and entertainment center” and not “just a rest stop on the way from the Bay Area to Reno and Tahoe.’

Lukenbill said he and his partners in the Sacramento Sports Assn.--developers Angelo Tsakopoulos and Joe Benvenuti and businessman Fred Anderson--are offering the Raiders a $335-million package. This includes putting up $100 million to build the new stadium and also various sources of income to the Raiders.

Revenue Guarantee

For instance, the team is guaranteed $90 million in ticket revenues over the first five years and all income over $105 million from parking, food and luxury seats over a 20-year period. The association also would agree to split the revenue from stadium events such as rock concerts.

They have even agreed to give Davis 22.5% of stadium revenue from baseball games, should they be successful in gaining a major league franchise.

“There are probably better ways to make money than this deal, I can tell you,” Lukenbill told reporters, “but this is for Sacramento.”

The successful developer did not mention that he and his partners have large land holdings in the area where the basketball arena now stands and where the football stadium would be built. They plan large residential and commercial developments in the area.

Lukenbill said acquisition of the Raiders would “provide jobs for the unemployed” and “housing for homeless people,” in an apparent effort to counter criticism that the city and county should spend their money on needed public services, not on attracting a football team.

Reports Reaction

He said Davis has visited the stadium site and added, “I think he believes Sacramento can support an NFL (National Football League) franchise.”

Asked why Sacramento should trust Davis, after his years of battles with other homes and would-be homes of the Raiders, Lukenbill replied that the question could only have been asked “out of fundamental ignorance.”

“Al Davis has never broken an agreement--morally, ethically or legally--in 27 years,” he said, adding that “rhetorical posturing” has portrayed Davis “as the bad guy” when the real blame should have fallen on the “public sector.’

That is why Davis wants a “public commitment” of the $50-million “franchise inducement” before making up his mind, Lukenbill said.

Lukenbill said Sacramento has a good chance of landing the team because “the Los Angeles environment has not proven to work very well--there are too many professional franchises there, and I include UCLA and USC.”

Cites Problems

And Oakland, he said, has “tremendous other problems” that would make it “virtually impossible” to make a bid that would equal Sacramento’s.

Meanwhile, in a Los Angeles development in the Raiders matter, Irving Azoff of MCA Inc., a private management representative of the Los Angeles Coliseum, said a new attempt to resolve a legal dispute that has prevented Coliseum-Raiders talks from getting under way has been unsuccessful.