Cali Venue Bill Keeps Rolling

A bill to encourage California cities to build more performance facilities is still alive and kicking. State Senate Bill 4, which is designed to defray taxes on venue construction, is expected to go to a vote on the State Assembly floor in the next couple of months.

The bill would create the California Public Performance Authority and its members would sell a facility’s naming rights, sponsorships and premium seat licenses, rather than a city or private entity selling them. That makes cash from naming rights or the other revenue tax exempt because of the State of California’s preferential tax status.

The CPPA would also be able to sell tax-exempt bonds so that additional financing would be cheaper.

As it stands, a $100 million naming rights deal is actually worth about $55 million after Uncle Sam takes a 40 percent chunk. State Sen. Kevin Murray, who sponsored SB4, believes the creation of the authority will motivate communities to build new theatres, arenas and stadiums.

Murray, a former William Morris agent, says local governments are increasingly reluctant to pay for performance facilities. Not only would SB4 change that, but Murray recently told Pollstar private investors would also see more money.

“[The facility] could very well be privately owned,” Murray said. “Any of the promoters that you know could go to the Authority and say, ‘Here is a package for building a new theatre or arena,’ and if the package makes sense, the Authority will make a deal with the private entity as well.'”

The state might get into the deal, too. Currently, the State of California operates only a handful of venues but would obviously get the tax exemption if it decides to delve further into the business.

The bill recently passed the State Assembly Policy Committee on a vote of 7 to 1. It is now expected to go to the Assembly Appropriations Committee to see if it fits into the state’s budget before heading to a full vote on the Assembly floor. It then returns to the State Senate for another vote on the Assembly’s amendments before landing on Gov. Ahnold’s desk, possibly in August.