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EARLY ANALYSIS - HIGHLY PRELIMINARY

I-SAC:RAMIENITO

U S E R F E E S R E P O R TThink BIG Executive Committee Meeting

August 18th, 2011

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YOverview of Regional Public Benefits ~BIGSACRAMENTO $7B in revenue to region over 30 years

4,100 new jobs

$556MM in spending during construction

3.1MM new visitors to downtown each year

$6.7MM in annual fiscal benefits

Sources: Threshold Report, Economic Engine Report, Capitol Corridor Impact Report. 2

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YChecklist to Create Funding Plan ~BIGSACRAMENTO~ Determine cost (February 8,2011- May 26,2011)

o Propose menu of funding options (May 30,2011-September 6,2011)o Select funding options (September 7,2011- December 31,2011)o Secure funding sources (January 1,2012 - February 29,2012)o MARCH 1, 2012 RELOCATION DEADLINE

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YOverview of Public-Private Partnership (PPP) ~BIGSACRAMENTO New ESCwill cost $387MM

Financing will require public-private partnership- P R IV A T E P A R TIC IP A T IO N

Kings as anchor occupant Third party investors in operator and/or developer roles

- U S E R F E E S Revenue generated by users with a direct nexus to facility

- P UB LIC P AR TIC IP AT IO N ESCwill be public asset owned by taxpayers Multiple revenue streams required

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YConceptual Model for PPP ~BIGSACRAMENTO

. . . . ~, ,, ,, , ,, , ,, ,

Vl Anchor Tenant Third Party Land(]) lease payment Investment Acquisitionu,_: : : : l0Vl(])..QVl Other private Personal Seatl Concessionaire0 participation Licenses,

tPrivate

tUser Fees Public

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YConceptual Model for PPP ~BIGSACRAMENTO

tPrivate User Fees

Vl(])u,_: : : : loVl(])..QVlVloc,

Arena Fee Naming Rightsicket Fees

Public

BusinessImprovementDistricts (BID)

Parking

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YConceptual Model for PPP ~BIGSACRAMENTO

tPrivate

;f f ~Vl(])U,_: : : : l0 Revenues froml(]) assets directly..Q Public LandVl enhanced byVl0 ES Cc,

tUser Fees Public

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YU ser F ee S ou rc es ~BIGSACRAMENTO P ub lic su pport for u sers fees is stron g

Examples:

Naming Rights (74%) Parking (71%) Ticket Surcharge (57%) Arena Fee (57%)

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EA RL Y A NAL YS IS - H IG HL Y P RELIM IN AR YUser Fees: Ticket Surcharge ~BIGSACRAMENTO Consist of a predetermined surcharge for all events at facility

- Fixed $ amount or % of ticket value

Ticket Fees are common:- AT&T Park- Staples Center

100 Day analysis will estimate size of revenue opportunity

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EA RL Y A NAL YS IS - H IG HL Y P RELIM IN AR YUser Fees: Arena Fee ~BIGSACRAMENTO Arena Fee could be applied to goods sold in the facility

- Food and Beverage- Merchandise- Other items

Poll showed 57% supported this type of fee

100 Day analysis will estimate size of revenue opportunity

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YUser Fees: Naming Rights ~BIGSACRAMENTO

Orlando: Amway Center Memphis: FedEx Forum Kansas City: Sprint Center Opened in 2010 Opened in 2004 Opened in 2007

$195M over 30 years Average $6.SM annually

$90M over 20 years Average $2.SM annually Average $4.SM annually Reduces to $1.7M without NBA/NHL

Sacramento: TBD Market Conditions suggestcomparable range ($2.SM - SSM)

May amount to $SOM - $100Mover 20 year period

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YUser Fees: BIDs (Related to Tourism/Facility) ~BIGSACRAMENTO Additional 3.1 million tourists/visitors will visit downtown each year

BID could be designed to capture added tourists/visitor revenue with connectionto facility

Additional visitors and accompanying consumption (e.g. accommodations, food,and car rentals) can create additional user fee revenue

Examples- Portland: BID contributed $21.5 M ("'20%) to construction of streetcar system

- Seattle: $26 M for streetcar project

- San Francisco: 11 BIDs funding variety of downtown revitalization project

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EARL Y ANA L YSIS - H IG HL Y PR ELIM IN AR YUser Fees: Illustrative Case Study ~BIGSACRAMENTOParty of Four From Outside City Attends Kings game or Lady Gaga Concert

(75% of Event-goersl (4) Average Priced Tickets $4 - $12 (2) Small Draft Beers $2 - $4 (4) Small Soft Drinks $0 - $2 (4) Regular-Sized Hot Dogs $0 - $2 Could generate$SM - $20M/ year (1) Parking $2 - $5 (2) Game Programs $0 - $1 (2) Merchandise $2 - $4

$10 - $30

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EA RL Y A NAL YS IS - H IG HL Y P RELIM IN AR YConclusions ~BIGSACRAMENTO1. Finance plan will require support from three areas: private

investment, user fees and public participation

2. User fees represent a key contribution as these revenues areprovided by those benefiting from the facility and bear adirect nexus to the complex

Ticket surcharges Arena fees Naming rights Business improvement district revenues Parking revenues

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