While some NBA players are looking overseas for jobs, one franchise is looking abroad for cash.
Today, the Sacramento Bee reported that the Kings will be looking for funding for its new stadium from a little know federal program that offers green cards to wealthy immigrants who invest in business enterprises in the United States.
The program, known as EB-5, could be crucial in the funding for the proposed $387 million arena. Sacramento Mayor and former NBA player Kevin Johnson has assembled a “task force” aimed at building the Kings a new arena and ultimately keeping them in the state capital. Though the program won’t provide all of the funding for the arena, it could supply a substantial amount of money for the project.
The program, created by the Immigration Act of 1990, has projects in 25 states with 15 in California including the redevelopment of McClellan Air Force Base in Sacramento. The project provided $18 million to transform the base into a business park. CMB Export, the company that found money for McClellan, says it has raised a total of $350 million for projects throughout California.
In fact, the program has already provided $249 million to finance improvements around the new NBA arena in Brooklyn, NY.
In order for the investors to obtain a green card through the program, they must invest $1,000,000 into a project (or at least $500,000 in an employment area) that preserves or creates 10 at least 10 jobs in rural or high-unemployment areas. However, if the project fails within three or four years of the investment, the green cards will be denied.
Money from this program could be key in building the new stadium for several reasons beyond just simple funding. It could soften the political climate around the arena since it would call for less money from the actual city. Mayor Johnson’s task force has proposed selling off several pieces of city owned property that has angered several members of the city’s city hall. Such selloffs could harm the already lowered property values of Sacramento.
The initial money raised by the program could also serve as a bridge loan for the new arena allowing construction to start very soon. Unemployment has lowered in the area from 12.5 to 11.9 percent over the course of the summer but still sits at 12.4 percent in Sacramento. The construction project alone could provide several jobs in the area.
However, this program has failed before in California. Last year, US Citizenship and Immigration Services, which oversees EB-5, ended a project that raised $7.5 million to build a wastewater plant in the Southern California town of Victorville. Officials in the small desert town proposed that the treatment plant would attract a Dr. Pepper Snapple bottling plant. The agency wasn’t convinced of any correlation between project and job creation so the project was cancelled. Subsequently, only one of the investors received a green card, which was a temporary one at that.
Earlier this month, Mayor Johnson revealed a plan that will provide 4,100 jobs and has promised that the area will attract several businesses that will generate millions in revenue. All of this was proposed to Maloof Sports and Entertainment that decided to keep the franchise in Sacramento last May. However, a new state-of-the-art stadium is what will really keep them there.
“Yes, if we get an arena built that meets our specifications, yes we will stay [long-term],” Galvin Maloof said. “Absolutely. We have to have an NBA, state-of-the-art arena. It doesn’t have to have marble everywhere, but it has to be an NBA type of arena. It has to be approved by the NBA and also by us, but obviously it doesn’t have to be a Taj Mahal. We know the [economic] market that we’re in, but it’d have to be an NBA-approved arena and approved by us and our specifications.” (Sports Illustrated)
Johnson’s task force has until next March to complete a financial plan for the arena. Ultimately, it is up to the Maloofs to make the decision on whether or not the Kings will stay but EB-5 could be part of the solution.