The Sacramento Kings have vowed to keep more dollars from the arena project local, pledging to buy enough local materials to generate $1 million in sales taxes for the city.
Such revenue would come from many of the big purchases made early on, such as steel, seating, glass and audio-visual equipment, according to the team.
“This is our commitment,” said Kunal Merchant, the team’s vice president of strategic initiatives. “A lot of parts of this project are difficult. But whenever we find an opportunity to expand on the local benefit, we pursue it. It’s always going to be worth it.”
Both the Kings and principal arena contractor Turner Construction, along with subcontractors working on the arena, will use a program approved by state legislation in 1999 letting contractors determine their own taxable transactions and submit them to the state. The downtown arena site will serve as the business address for such transactions to make sure sales taxes go to the city of Sacramento.
Tax consultant MuniServices, which has past experience with similar projects, will work with the city to make sure sales and use taxes move from the state to local coffers.
Merchant said the $1 million figure is an estimate, based on contractors buying about $100 million worth of materials. Normally, if those sales weren’t all listed as derived from Sacramento, the city’s share would be less than a third as large.
“At this point, that’s how much we think we’ll spend on construction,” Merchant said. “It’s very possible that we may buy more than we expect.”
The commitment isn’t in reaction to any recent gripes aired about the project, such as concerns by affordable housing advocates that displacement of downtown housing units means the arena isn’t benefitting the community as a whole.
As with other commitments covering sustainability, funding for transportation and local hiring, Merchant said, the sales-tax pledge is an ongoing chapter in a series of public benefits the arena project will provide.