Your Sacramento Railyards Fact Sheet.

Last week, hundreds of spectators, residents, and well-wishers gathered to celebrate a seminal moment in the Sacramento’s future: the grand opening of Railyards Boulevard, connecting downtown and the Sacramento Railyards site by joining 7th and Jibboom streets, as well as new extensions to 5th and 6th streets downtown.

Between the photo ops, enthusiastic residents and speeches by city officials, there was a palpable sentiment that, more than just another road, this was really a link between the capital city’s past and it’s promising future.

But if you’re a Sacramentan, you’ll probably get very familiar with grand openings and civic ceremonies, as new landmarks will be unveiled at the Sacramento Railyards frequently over the coming years and decades, transforming the region.

“To get to this point…is a real big milestone for the city,” said Councilmember Jeff Harris. “This project essentially doubles the size of our city center. It’s the biggest infill project right now in the US. This is a big deal.”

A big deal, indeed, since advocates, developers, and city officials have been working tirelessly to make the Railyards project a reality for parts of three decades or more.

In order to keep you abreast of all the exciting happenings with the project, we’ve compiled this Sacramento Railyards fact sheet:

The Vision

The Railyards is a 244-acre site located just north of downtown and south of the River District in Sacramento. Transforming the historic former site of the Union Pacific railroad hub, it looks to develop a state of the art mixed-use urban center, complete with a signature mass transit hub. With plenty of housing, hotels, retail spaces, office space, and entertainment venues like theaters, parks, and museums, the Railyards will be an economic boon for the city and a must-see destination for Californians and tourists alike.

History of the Railyards

At its inception in the 1860s, Sacramento’s rail yards were the central hub of the entire western United States, connecting the country and aiding commerce created by western expansion and the Gold Rush.

The first railroad in the Sacramento Valley was completed in 1856, and The First Transcontinental Railroad was completed in 1869 after several other railroads like the Central Pacific merged.

As early as 1883, Sacramento’s terminal was the primary point of departure and arrival for thousands of travelers, workers, and innumerable goods.

In fact, in the early 20^th century, the Sacramento railroad network was the largest west of the Mississippi River and employed an astounding one-third of all Sacramento workers!

Proposed Project

Plans for the Sacramento Railyards include:

6,000-10,000 housing units

405,741 square feet of retail space

2,757,027 - 3,857,027 square feet of office space

771,405 square feet of flexible mixed use

1,228,000 square feet of medical campus

1,100 hotel rooms

485,390 square feet of historic and cultural uses like museums

33 acres of open space for parks and recreation

A soccer stadium with 19,621 seats, and potential to expand to approximately 25,000 seats.

Once completed, the Railyards is expected to provide housing for an estimated 20,000 people, a community more populous than Land Park and Curtis Park combined.

The keystone of this redevelopment is the refurbishing of the former “Central Shops” buildings that originally served as the Southern Pacific Depot and maintenance facilities.

An expansive public market place will be at that site, as well as a railroad museum and performing arts center.

It’s estimated that new Railyards site will create 19,000 permanent jobs once it’s opened, as well as employ thousands of contractors and construction workers.

Initial Plan

Developer Millennia Associates tried to buy 70 acres in the southern portion of the rail yard in 2003, with hopes of eventually purchasing and developing the entire property. The project stalled until Thomas Enterprises, Millennia’s financial partner, finalized the rail yard purchase in late 2006.

The first version of the Sacramento Railyards redevelopment that was officially on the books was registered as P05-097 and approved by the City Council on December 11 2007. It was a scaled-down version of the monumental project we now are familiar with, encompassing “only” 12,100 housing units, 1.4 million square feet of retail space, 1,100 hotel rooms, 2.4 million square feet of office space, 485,390 square feet of historic and cultural space, and 491,000 square feet of mixed use.

Current Status

That 2007 proposal was updated in June of 2015, when a new proposal was submitted with a much larger scope, including a change of the land use plan that would incorporate two new additions: a soccer stadium and a Kaiser Medical complex with its 14-story hospital

The Railyards redevelopment has been portioned into five phases. The first phase, Infrastructure Building, is already underway.

Since the Railyards site contains soil and groundwater contaminants that are harmful for humans, environmental remediation has been underway since the 1980s in compliance with the California Department of Toxic Substances Control (DTSC) and the Environmental Protection Agency.

Who is involved?

The Railyards land is owned by IA Sacramento Holdings, L.L.C., under the umbrella of InvenTrust Properties Corp. The project was master-planned by the Jerde Partnership firm. A local development team includes Larry Kelly, who was responsible for turning the MCClellan Air Force Base into a thriving industrial park.

Of course there are many city and municipal agencies and departments involved, but if you have any questions about the Sacramento Railyards or want more information you can contact Associate Planner Teresa Haenggi:

THaenggi@cityofsacramento.org

(916) 808-7554

Next Steps

With the Golden 1 Center opened the fall of 2016, the Sacramento downtown revitalization is in full swing, and that includes the Sacramento Railyards project.

As well as continuing to develop the infrastructure at the Railyards and connect more streets, the city will look to finish construction on nearby F and G Streets, finish new retail and housing projects on the 7000 block of K Street, and break ground on a new county courthouse building.

Now that our downtown is linked to the Railyards by the new boulevard, the first hosing units are expected to be completed sometime in 2018.

The new 20,000-seat soccer stadium could be built as soon as 2018 or 2019 in hopes of attracting a MLS pro soccer team.

The Kaiser Permanente major medical campus is expected to take six to nine years to open.

The proposed Superior Court building at the Railyards does not yet have a firm timeframe for construction.

In the short term, the city of Sacramento is expecting to finish their rehabilitation of the train station that sits at the entry of the railyard some time this winter. The $34 million revitalization of the block-long former station will mark the start of the process to attract retail and office tenants, as well as establish a new Amtrak station.

 “We are seeing a lot of momentum,” said Sacramento city official John Dangberg who oversaw the downtown arena. “But it still takes time for markets like Sacramento to mature.”

While we’d love to see that maturity come to fruition in the Railyards sooner than later, patience will be a virtue as the project marches on towards its epic finale, that will surely reenergize Sacramento.

Will Sacramento soon be known for THIS iconic building?

There is the Empire State Building in New York City, the Gateway Arch in St. Louis, and even the Transamerica Building in San Francisco. In fact, most major cities have an iconic architectural marvel that comes to define them. Will Sacramento be getting its very own architectural marvel?

Sacramento’s signature building could soon be gracing the city skyline, as a new project downtown is in the works – and it’s not the new King’s arena.

A proposed new tower on Capitol Mall and 3^rd Street, now site of the infamous eyesore “hole in the ground” city block, would rise a statuesque 30 stories above the city streets, a modern complex with glass facing, open pedestrian walkways, landscaped terraces and balconies. It would include a mix of office and retail space, restaurants and café, and 100 luxury apartments.

This may sound familiar, as the same site was home to another ambitious project almost ten years ago– developer John Saca’s duel Towers, which fell apart infamously along with the real estate crash. The site has sat vacant and in disrepair ever since, with concrete pylons “like gravestones” the only remnants of its demise.

But now, with the new King’s Golden 1 Center and other development projects revitalizing downtown, the 420-foot single tower could become a reality. Last week, Los Angeles developer CIM Group released a rendering of what the tower could look like – and it is stunning. The building would instantly be in the running for the tallest building in Sacramento (plans have not been finalized yet, but right now the building would only be the second tallest in the city, just a few feet shorter than the nearby Wells Fargo tower) and help Sacramento’s horizon rival that of any city in the country.

Designed by renowned global architectural firm Gensler, the building would feature a seventh-floor outdoor landscaped terrace that would be open to the public and provide spectacular views of the Capitol and Sacramento River. Two more landscaped terraces will adorn the tower further up, probably one for office tenants and the other for apartment residents. The building would also have parking for 1,260 cars on the ground floor, lower floors devoted to retail and modern office space you might see at tech firms, with open floor plans and high ceilings. In fact, offices are expected to take up about two-thirds of the 1.1 million square feet of the building.

Although the architectural drawings that were just released are reason for grand optimism, CIM Group and city officials preach patience, as construction probably wouldn’t begin until 2018 even under the best circumstances.

“This is a very preliminary vision,” said Avi Shemesh, co-founder of CIM Group. In partnership with CalPERS on the project, they still don’t even have a target price tag, yet alone a feasible budget. Not coincidentally, CalPERS was a partner on Saca’s Towers a decade ago.

“We’ve waited since 2007,” said CalPERS chief investment officer Ted Eliopoulos, who mandated funding be pulled from Saca’s Towers for cost overruns in the then-failing economy. “We’ve been patient. The economic conditions in Sacramento are improving. ... There’s a window opening.”

Reportedly, Shemesh is hesitant to fund and commit to a project that isn’t fully occupied. But bolstered by the Golden One Center only a block away slated to open this October, Shemesh thinks that “there are a lot of stars that are aligned here.”

But before we start penciling in the epic ultra-modern building into Sacramento’s skyline, the project still needs building permits and vetting in the city’s entitlement process. Attracting an anchor office tenant that could commit to 400,000 of square feet of space is probably the keystone that would allow construction to begin.

“While it’s not as pie-in-the-sky as the previous project, this is a beautiful project,” said City Councilman Steve Hansen. “This is a realistic project we can get built.”

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What do you think about the proposed design? And what should we name it?

How much will the new downtown arena really benefit Sacramento's economy?

If you’ve drive through downtown Sacramento lately, it’s impossible to miss the area’s signature construction project, a downtown arena to host the Sacramento Kings, called the Golden 1 Center and set to open in 2016. This ambitious $507 million arena build is already changing the look of Sacramento’s skyline, but will it have the same impact on the economic horizon? It’s hard not to welcome the arena to a city that desperately needs it on several levels – a new home for the Kings that ensures they won’t bolt to Seattle or Las Vegas, a chance to revitalize a shabby and underutilized downtown, and a chance to shed a reputation as a second city, despite being the capital.

But past all of the banner waving and encouraging rhetoric, what are the cold, hard, facts that display how the Kings new arena will affect the local economy?

Of course we can analyze the financials, but a better way to predict the economic impact of the new arena is to look at how similar arena projects across the nation have flourished – or floundered. .

First, the prognosis through rose colored glasses; despite a Sacramento city $258 million subsidy left on the books, Mayor Kevin Johnson and the Kings predict the new downtown arena – will spark the local economy to the tune of a $11.5 billion windfall, revitalizing the downtown and bringing renewed prosperity to the city’s business climate and citizens.

Critics of the arena deal, however, point to the imbalanced and somewhat ambiguous financials of this particular deal, as well as numerous studies that reveal that sports arenas help communities far less than thought. In fact, they say writing a blank check for the arena like that can even jeopardize the city’s budget and actually set the region back in the long run.

So who is right?

Only time will tell, but here are some key points to consider:

The city isn’t shy about citing an $11.5 billion economic impact, but it’s important to note that those numbers project over 35 years.

The fine print on the arena studies reveals that approximately 50% of that projected economic benefits is expected to come from bars, hotels, shops, real estate values, taxis, tourism, convention business, and other commercial development. Together, all of these are called “ancillary developments” and aren’t guaranteed.

Critics of the arena deal – not necessarily the arena – point to the uncertainty of those ancillary developments, as the term sheet approved by the City Council only guarantees the Kings will spend $189 million on the arena – not a cent to develop the rest of the Downtown Plaza or surrounding neighborhoods.

The city’s financing plan is largely based on borrowing against future parking garage revenue below the arena.

The huge bill pushed to the city’s side of the table after dinner will include $19 million a year in principal and interest payments. However, City Treasurer Russ Fehr predicts that the city will receive $2.7 million in new tax revenue once the project is completed –a meager return on investment that would have any first year economics student shaking their heads.

Numerous studies have analyzed the economic impact of new sports arenas and stadiums on their surrounding communities, including arenas in Atlanta, Boston, Brooklyn, Chicago, Denver, Indianapolis, and Cleveland, Milwaukee, San Francisco, and Oklahoma City.

Here is the short version of what they found: stadiums can and often do benefit the cities they’re built in, but so much depends on context.

For instance, NFL football stadiums, with only 8 regular season home games per year, offer the least economic returns for cities.

However, a well-placed baseball stadium in a downtown or industrial area in need of revitalization can provide a “major” benefit, probably the most of any sport. With 81 home games and 40,000+-seat attendance, baseball stadium builds provide the greatest immediate economic benefit.

However, basketball arenas sometimes provide the best combined returns, as there are at least 41 home games played in cold weather months when people usually otherwise stay indoors and don’t spend as much. Most importantly, the facility can be used for other venues like concerts, shows, events, and hockey and other sports.

Studies show that for a basketball arena to be a cash cow to the community, annual attendance needs to be at full capacity. The Kings only attracted 680, 049 people to their home games last year, one of the lowest in the NBA, although that could be a symptom of a bad arena and a bad team, not an indicator of a potential attendance cap. But the new Golden 1 Center is going to be one of the NBA's smallest arenas, with a capacity of 17,317 seats and only 30 luxury suites.

The Brookings Institution and Heartland Institute both back up research that shows that new pro sports facilities have “little impact or even a negative impact on net personal income of residents in the surrounding area.”

That’s because most of jobs created are minimum or low-wage jobs, the increase in real estate values prices many average people out of the rental and housing market, and dollars spent on sports games takes away from other events.  In fact, some research found that per capita income in cities with new arenas actually dropped by about $2,430.

Huge gains are expected for already-wealthy restaurateurs (Randy Paragary), hotel, commercial, and real estate developers – not the average Sacramentan.

Notable sports economist Roger Noll at Stanford University, thinks that a city the size of Sacramento can expect only $10 million to $15 million a year in new revenue from the arena.

Other comprehensive studies, such as the one conducted by Geoffrey Propheter of George Washington University and published in The Journal of Urban Affairs, indicates a half empty, half full glass when it comes to the question, “Do basketball arenas act as catalysts for economic development?”

According to Propheter, “The results suggest that basketball arenas do not add economic value on their own but instead are highly dependent on the local economic, social, and cultural context where they are located.”

Within that open door of “context” is where hopes for the King’s arena can enter.

Considering that Sacramento is the capital of California yet still just a big town compared to metropolitan areas like San Francisco, San Jose, Los Angeles, and San Diego, the city is sorely in need of a thriving professional sports franchise, a revitalized downtown, and a signature project to rally around.

The arena is expected to be a shot in the arm for the struggling hotel industry in Sacramento, which declined to an all-time low of 50% vacancies six years ago, but already on the uptick to a normalized average of 62%. Already, several luxury and big-money hotel projects are underway, and analysts predict a 6% increase over the next few years as the arena is built.

Along with a huge boost to hotel business comes unlimited potential to Sacramento’s convention and conference business and increased revenues for the region’s Sacramento International Airport, which is already planning expansion and a beautiful new hotel complex.

One independent study found that the Sacramento arena will attract 1.6 million new visitors a year to downtown, spending $230 million parking, eating, drinking, shopping, and yes – watching Kings games.

But more than just the arena, Mayor Kevin Johnson is most excited about the four-block, one-billion-dollar real estate development that will bring restaurants, new offices, hotels, and family entertainment downtown, bolstering his city.

"We’re in a new era called Sacramento 3.0,” says Johnson. “Where we do things differently and where we control our own destiny. It’s bigger than basketball. We’re revitalizing our downtown. It’s about civic pride."

So what’s the answer to the burning question, “Will the arena really benefit the economy of Sacramento?”

We’d love to hear your thoughts, opinions, and concerns, so email us or comment below: