Mayor Kevin Johnson, at podium, has been a driving force behind the downtown arena development. Here Mayor Johnson is shown with, from left to right, City Councilmember Jay Schenirer, Asian Chamber of Commerce CEO Pat Fong-Kushida, City Councilmember Allen Warren and Sacramento Kings President Chris Granger.
Mayor Kevin Johnson, at podium, has been a driving force behind the downtown arena development. Here Mayor Johnson is shown with, from left to right, City Councilmember Jay Schenirer, Asian Chamber of Commerce CEO Pat Fong-Kushida, City Councilmember Allen Warren and Sacramento Kings President Chris Granger.

DOWNTOWN SACRAMENTO – When the National Basketball Association (NBA) was deliberating on what to do about Los Angeles Clippers owner Donald Sterling, after he made degrading remarks about Black people, a nationwide conversation on issues of race, fairness and equity flared up.

Key economic and political questions emerged: Will African Americans — who dominate the faces of not only the NBA, but the entire U.S. sports and entertainment industry — ever leverage their position of power on a larger scale? Does enough leadership-courage exist (among decisionmakers of all races) to help Black Americans evolve beyond running, jumping, aiming and throwing on the courts and on the fields? Will African Americans ever influence or run “the business of sports and entertainment” in a way that measurably helps to improve conditions in the African American community?
Meanwhile, as the Sterling saga unfolded, the City of Sacramento was engaged in moving forward with plans to build a $477 million downtown Entertainment and Sports Complex for the NBA’s Sacramento Kings.

Although the downtown arena has also caused curious debates — as a project wrapped by strategic support and opposition for more than two years — it has placed Sacramento in a unique position. A precedent may be set for ensuring that African Americans receive fairness and equity, both during and after construction, in what will be a major, publicly-funded sports and entertainment venue.

When looking through a lens revealing the leadership driving the arena, African Americans are playing pivotal decision-making roles. Most notably, they include: Sacramento Mayor Kevin Johnson; City Council Member Allen Warren; Cloey Hewlett, an attorney for the Kings and national leader on diversity; and Clint Williams, Business Development Manager of Turner Construction Company.

Historically, for a number of reasons, small business and job opportunities on regional construction sites — even those funded by taxpayers — have practically excluded Blacks.

In Sacramento, some of the examples include the $45 million expansion of the downtown Convention Center; the $50 million construction of the existing Sacramento Kings arena; the $100 million Crocker Art Museum addition; and, the $1 billion construction of Terminal B at the Sacramento International Airport.

All of the latter projects, to name a few, enlisted less than one percent African American participation.

While the odds for Black participation in the Kings arena appear to be favorable, local African American community-based organizations reportedly contend with a late start in efforts to get on the playing field.

When public discussions about using taxpayer money to help build the downtown arena began in 2013, some leaders say that a unified African American arena participation effort and strategy didn’t exist.

At that time, Mayor Johnson had won a long fight to keep the Kings in Sacramento; effectively ending a series of failed attempts by its former owners (the Maloof family) to relocate and/or sell the Kings to other cities.

On May 15, 2013, the NBA’s Board of Governors voted to keep the team in Sacramento, which ultimately led to the Kings being sold for a reported $347 million to the current ownership group led by technology guru, Vivek Ranadive.

A key condition of the NBA vote was that the City of Sacramento would build a new arena for the team by 2016, or else face another threat of losing the Kings.

The Sacramento City Council voted to green light the arena construction on May 21, 2014, committing a $223 million cash contribution for what will be a city-owned arena.

The Kings agreed to invest $254 million.

Some area leaders felt African Americans had then lost a key political opportunity to ensure their maximum participation in the arena project.

“At that point, the stakes became troubling for African Americans in this town. We hadn’t fully positioned ourselves to really play in the (downtown arena project) game,” said James Shelby, President and CEO of the Greater Sacramento Urban League (GSUL), an organization that has provided job training and placement programs to local at-risk populations for more than 45 years.

Shelby indicated that Sacramento’s Black community institutions are faced with a monumental task of ensuring that African Americans get a fair share of jobs, small business contracts and neighborhood investments expected to be generated by the downtown development.

The City and the Kings organization have promoted an arena “stimulus” of approximately $500 million into the local economy. They expect to create numerous small business contracting opportunities, and an estimated 3,000 on-site and off-site jobs during construction, including 200-300 apprenticeship positions.

The arena is also expected to catalyze upwards to $1 billion in economic activity related to building additional private projects, such as new commercial, retail, housing and hotel developments in the heart of downtown.

According to city estimates, the project will ultimately lead to an economic impact of more than $7 billion for the region over the next 30 years.
Shelby says “the door to Black participation in the action wasn’t easy to open,” at first.

“In early July (2013) I recognized that there was no one advocating for jobs in our community,” said Shelby, referring to a Project Labor Agreement (PLA) between the City of Sacramento and local construction trade labor unions.

Studies reveal that Union PLAs have had dismal track records in leading to jobs for African Americans.

Shelby related that he called the City and union officials, and they didn’t seem to want to give him an invitation to participate. So, he convened a meeting with community leaders which included local church pastors and Hispanic and Asian organization leaders.

“I said to them that we cannot allow this PLA with the unions to take place without some assurances that the community is going to be able to participate,” he said.

A precedent had been established in 15 other cities across the country where grassroots leaders blocked major taxpayer-subsidized economic development projects until they worked out a Community Benefits Agreement (CBA).

A CBA guarantees that disadvantaged communities — those most impacted by large development projects — participate in the planning process and accrue certain benefits.

Before the $1 billion downtown Los Angeles Staples Center arena was built, community groups organized their political and legal power to secure a CBA for living-wage jobs, local hiring and training programs, affordable housing and more than $1.8 million in funds for community programs. After being forced by Los Angeles’ Mayor and City Council members to work with a community coalition, the developers won grassroot support for procuring more than $70 million in subsidies from the city.

On the flip side, there was no CBA linked to the $1.2 billion football stadium project under construction in Santa Clara.

Bay Area civil rights and business groups are now threatening to sue the San Francisco 49ers because they claim minority-owned businesses were shut out of the contracting process.

Affordable housing advocates recently filed a California Environmental Quality Act (CEQA) lawsuit against Sacramento’s downtown arena. They want $40 million for affordable housing from the Kings.

In the CEQA suit, the primary groups involved are the Sacramento Housing Alliance, the Environmental Council of Sacramento and the Sacramento Regional Coalition to End Homelessness.

There are no African American organizations involved in the litigation.

Some Black community leaders told The OBSERVER that from the moment Mayor Johnson hailed victorious in the proceedings keeping the team in Sacramento, to the final arena approval vote by City Council, the voices and interests of those in the local Black community were arguably unheard.

There has been great appreciation among African Americans for the successful effort Mayor Johnson made to keep the Kings in Sacramento.

Black community leaders have also heaped high praise on the Mayor for his vision of turning a underutilized K Street Mall into a catalyst for regional development.

There have been some, however, who wanted to see more apparent economic development benefits and opportunities for Black contractors and vendors in the $477 million project — especially with so many African Americans in leadership roles.

The Mayor and the Kings have agreed to award 60 percent of the arena contracting opportunities to local businesses — with 20 percent going to small businesses.

They have also initiated a priority apprenticeship program — at the urging of the Urban League’s Shelby — that is expected to create 70 of the 3,000 construction jobs for hard-to-employ area residents.

Azizza Davis-Goines, the Sacramento Black Chamber of Commerce President and CEO, said that her organization has been “at the table,” hammering out a deal with the City and the Kings for small business contracts.

Ms. Davis-Goines said her Chamber has been working alongside the Metro, Asian, Hispanic and Rainbow Chambers of Commerce, “from the beginning.”

“We’ve been effective in assuring that a portion of the work will be set aside specifically for the businesses that we represent,” Ms. Davis-Goines stated.

She pointed out that her Chamber has played an integral role in establishing local and small business contracting goals for the arena project.
Ms. Davis-Goines was asked if local Black businesses had adequate financial ability and staffs to form an enforceable Community Benefits Agreement (one similar to that connected to the Staples Center arena in Los Angeles).

“I think that many of the players at the table have limited capacity in terms of the work that’s needed to be done. It’s not just the African American community,” Ms. Davis-Goines said.

The Chamber leader wanted to be clear that, while the process of getting a fair share has “been up and down,” the Black community will do all it can, together, “to be sure that our voices are heard, and that some of the decisions being made are based on the need for our involvement.”

Sacramento Kings president Chris Granger declared that African Americans playing an equitable role in the process and outcomes of building the arena “is critical on multiple levels.”

“The commitment we have to diversity, and the commitment we have to African Americans specifically here in Sacramento — given what African Americans mean to the NBA generally — is something that is certainly top of mind for us,” said Granger.

Granger pointed out that during his first month on the job with the Kings, he had multiple conversations with Mayor Johnson and City Councilmember Warren “about a shared vision ensuring that this project is bigger than basketball — not just for the region but for individuals within the region.”

“Whether it’s building the arena, or inside the Kings organization, we are really focused on making sure that we are reflecting the great diversity of Sacramento — which is the most diverse city in the country. So, in everything around the arena it’s critical that we be as inclusive as we can,” he added.

Granger touted the Kings’ hiring of Nossaman Law Firm attorney Cloey Hewlett, a nationally-known diversity leader, to represent the team on business contracting and subcontracting issues.

Moreover, he said jobs for low-income residents of Sacramento, including ex-offenders, will be provided through apprenticeships, “to ensure that people get a fair shake.”

A Community Advisory Council, formed jointly by Mayor Johnson and the Kings, will support a goal of building an arena that provides “transformational economic and community benefits for the Sacramento region.”

Granger was asked if the Kings were able to determine whether this arena planning process was acceptable to local African American stakeholders.
“I think early on; at least the commitment is being well-received,” Granger observed.

“Obviously the proof will be in the pudding over time as we deliver on all the goals we’re laying out right now,” he added.

Co-chaired by Councilman Allen Warren and Ms. Hewlett, the Advisory Council is comprised of 11 members with business, labor, faith-based, civic, government and community backgrounds.

The Council, will meet quarterly, and will end its work when the construction of the arena has been completed. The Council’s meetings are not open to the public.

Mayor Johnson was unavailable for an interview, however, in an emailed statement to The OBSERVER, he said the involvement of Black, community-based stakeholders in Sacramento’s downtown arena is “extremely important.”

“When I was elected Mayor, my vision was to create a City that ‘works for everyone.’ I feel the exact same way about the (Entertainment and Sports Complex) — it must truly be a project that positively impacts everyone. Fortunately, the Kings are committed to the same goal, and we are off to a very positive start,” Mayor Johnson said in his emailed statement.
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EDITOR’S NOTE: This is the first of a three-part OBSERVER series that will continue to explore the significance of Sacramento’s downtown arena for local African Americans.

The next two parts will take an in-depth look at more specific actions and issues impacting small business contracting opportunities, arena construction jobs, and what may or may not happen to transform neighborhoods of interest to African Americans in Sacramento.
The OBSERVER commissioned Malaki Seku-Amen — a 23-year veteran of public policy, economic development and communications — to develop this series. Seku-Amen is the President and CEO of the California Urban Partnership.

The CUP’s mission, in part, is to educate policymakers and the public about community economic development issues, as well as develop tools and partnerships that lead to urban solutions.