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I think the "small" thing is pretty much imaginary--personally, I know we are a "big" city and have been a big city for a long time. But I also want to keep the city "fiscally solvent," and see borrowing money from Goldman Sachs as a tad risky. As to driving out artists, it isn't the presence of sports that drives out artists (vs. arena size concerts or political rallies) it's the effect that the arena is already having on nearby rents--places that rented for $900 a month are jacking their rent up to $1200-1500, without bothering with property improvements or anything, just because they're near the arena and figure it makes their property more desirable. Artists generally aren't wealthy, so they are being priced out of downtown. We're seeing the same effect on business rents.
I think the "small" thing is pretty much imaginary--personally, I know we are a "big" city and have been a big city for a long time. But I also want to keep the city "fiscally solvent," and see borrowing money from Goldman Sachs as a tad risky. As to driving out artists, it isn't the presence of sports that drives out artists (vs. arena size concerts or political rallies) it's the effect that the arena is already having on nearby rents--places that rented for $900 a month are jacking their rent up to $1200-1500, without bothering with property improvements or anything, just because they're near the arena and figure it makes their property more desirable. Artists generally aren't wealthy, so they are being priced out of downtown. We're seeing the same effect on business rents.
Exactly. That is what I meant. I hope the gentrification doesn't drive out some of midtown's character. I have a feeling it won't though. Midtown is so dense and there are so many apartment buildings that there should still be plenty of affordable options. It may turn out that artists/working class folks continue to move further out into Oak Park, Tahoe Park and Curtis Park, but that is not necessarily a bad thing.
It is funny, I actually got into a passionate discussion about the arena with an older woman at 58 degrees. She said we don't have the infrastructure, why are we spending tax dollars on this when we have a homeless problem. I said I understand we have a homeless problem, but we have no real industry in Sac to bring in money to clean it up. The arena is attempting to create some sort of private investment and micro economic boom in downtown to generate money that can be used to do just that. You have to spend money to make money, period.
I applaud the mayor for having some sense of civic pride and actually caring about this city. His I-ST bridge proposal is great, creation of mini districts like the "R" is awesome. He has a vision for this city and he is at least pursuing it with fervor. A far cry from the stagnant feel Sac had under Fargo. Lol even her name was dull.
Gentrification of older housing occurs when the demand to live in the area out paces the ability of the neighborhood to build new housing. If you build a bunch of new housing all at once, you can oversupply the neighborhood and rents will even fall.
But new housing construction isn't a cause of gentrification its an effect of gentrification. If you look at North Sac/Del Paso Heights you don't see a lot of new housing being built in those neighborhoods because there isn't a lot of demand to actually live there.But if downtown didn't build the new housing that wouldn't stop the gentrification, it would make it a lot worse as the wealthy people out bid the poor and middle class for the right to rent or own that housing.
The issue with the new arena is whether it actually makes living downtown a more or less desirable place to live. If it does, it will gentrify the area, if not it won't. Huge block wide single use buildings tend to kill street life during the times when they are unoccupied and aren't bringing people to that block. The Capitol Area East End Project is a bunch of new pretty buildings, but the neighborhood immediately surrounding them is pretty dead after all the state employees have left for the day and basically I think the Arena Project is repeating this mistake in the middle of downtown.
While the East End Project built many new pretty buildings, I am not sure it made downtown nor the immediate neighborhood where it went in a more desirable place to live. Similarly, I have my doubts about putting the arena in downtown. The Kings only play 41 home games a year and that only happens for a couple of hours of the day. The rest of the time, building is going to be mostly empty most of the year and that will tend to kind of dampen activity in the neighborhood immediately surround the arena in the same way that East End Complex kind of creates a dead area downtown after dark when all of the state employees go home.
Now I know right now developers and landlords are raising rents under the assumption that new arena will make living downtown even more desirable. During past efforts at redeveloping downtown when and while the redevelopment project was going in there was tremendous enthusiasm and people thought putting in the tank traps on K Street or remodeling the K Street Mall was also going to make that area a more desirable place to live and work and rents were raised then too. But good intentions don't always result in good projects. After the new arena goes in we will see what happens. But if your a business that thrives on foot traffic from the Kings games, you probably will be incredibly busy on the days when the Kings have home games with pressure to add capacity to your shop or restaurant, but how do you keep your employees on the payroll and cover the cost of that extra capacity on the other 324 days a year when there are no Kings games going on at the arena? Chris Webber opened a restaurant in Natomas based on the premise that people would naturally want to go to his restaurant before and after Kings games, but that restaurant failed not because it wasn't popular before and after games when the Kings had home games, but because when the Kings didn't have home games, the restaurant was pretty dead which was most of the year.
I don't see the arena as being any help in bringing "industries" to Sacramento--as mentioned elsewhere, the entertainment industry tends to be pretty static in total size and dependent on population, adding entertainment amenities mostly moves money from one part of the region to another. The same goes with tax revenue etc. from those amenities--and because the city is giving up the parking revenue from downtown Sacramento for the next 35 years to pay for the arena, the idea that "it takes money to make money" is questionable--if you borrow more money than the new revenue can pay back, then it just plain takes money away. I like the K Street location more than any other proposed location for an arena, and don't think traffic is going to be as serious a problem as people make it out to be, especially once there are new connector roads on 5th, 6th and 7th to let people take those streets to the Richards Boulevard ramps to I-5 instead of just via I Street and L Street/Q Street. It's the financing that has me worried--and the potential hole in the city budget.
The issue of rent is a little more complex: I don't see it as gentrification so much as it is a temporary real estate bubble. The arena is generating short-term buzz, but it isn't even built yet, the efforts to draw short-term profit from an amenity that isn't even built and generating revenue yet implies that this is essentially a little real estate bubble, not sustainable long-term economic growth. I could understand raising rents once the arena is built, but the thing that will supposedly make downtown more desirable does not actually exist yet. The foot traffic that will supposedly help bring more customers to downtown Sacramento is not there yet but landlords are pricing rents as though there are already Kings games happening on K Street. And the problem with real estate bubbles is they tend to pop dramatically.
Regarding R Street, the R Street project had very little to do with Mayor Johnson--it is the result of battles that took place more than 20 years ago, between residents who wanted more housing and neighborhood serving amenities and developers who wanted more office complexes that would close down at 5 PM. The plans and decisions were primarily made during the Fargo and Serna administrations, and led primarily by CADA, not the city of Sacramento.
The proposal to replace the I Street bridge isn't Johnson's idea either, not by a long shot. And please note that the existing I Street bridge won't be replaced--the new bridge will be several blocks north, connecting to Railyards Boulevard. The existing bridge will still carry trains--just not auto traffic or (most likely) pedestrians.
I don't see the arena as being any help in bringing "industries" to Sacramento--as mentioned elsewhere, the entertainment industry tends to be pretty static in total size and dependent on population, adding entertainment amenities mostly moves money from one part of the region to another. The same goes with tax revenue etc. from those amenities--and because the city is giving up the parking revenue from downtown Sacramento for the next 35 years to pay for the arena, the idea that "it takes money to make money" is questionable--if you borrow more money than the new revenue can pay back, then it just plain takes money away. I like the K Street location more than any other proposed location for an arena, and don't think traffic is going to be as serious a problem as people make it out to be, especially once there are new connector roads on 5th, 6th and 7th to let people take those streets to the Richards Boulevard ramps to I-5 instead of just via I Street and L Street/Q Street. It's the financing that has me worried--and the potential hole in the city budget.
The issue of rent is a little more complex: I don't see it as gentrification so much as it is a temporary real estate bubble. The arena is generating short-term buzz, but it isn't even built yet, the efforts to draw short-term profit from an amenity that isn't even built and generating revenue yet implies that this is essentially a little real estate bubble, not sustainable long-term economic growth. I could understand raising rents once the arena is built, but the thing that will supposedly make downtown more desirable does not actually exist yet. The foot traffic that will supposedly help bring more customers to downtown Sacramento is not there yet but landlords are pricing rents as though there are already Kings games happening on K Street. And the problem with real estate bubbles is they tend to pop dramatically.
Regarding R Street, the R Street project had very little to do with Mayor Johnson--it is the result of battles that took place more than 20 years ago, between residents who wanted more housing and neighborhood serving amenities and developers who wanted more office complexes that would close down at 5 PM. The plans and decisions were primarily made during the Fargo and Serna administrations, and led primarily by CADA, not the city of Sacramento.
The proposal to replace the I Street bridge isn't Johnson's idea either, not by a long shot. And please note that the existing I Street bridge won't be replaced--the new bridge will be several blocks north, connecting to Railyards Boulevard. The existing bridge will still carry trains--just not auto traffic or (most likely) pedestrians.
Eh, bogus. You cite these projects that are hit and miss with demand. Things like Piers, Malls etc do not have a quantifiable demand. A stadium does. Especially when its primary tenant has an established, predictable attendance. The Kings currently hold several of the top 10 longest attendance streaks.
Now, ignoring the facts stated prior that the stadium WILL in fact host events yr round, the idea that businesses will not survive due to the ebbs and flow in foot traffic is total BS. Is rhis just yiur guess, or do you have any actual proof to back that theory up? The area around Giants AT&T park sprung up because of the baseball stadium, and it has thrived ever since. In contrast, the reverse happened in Seattle after the Sonics left. Many of the businesses in the Seattle Center area packed up and left, and that entire micro economy crumbled. And lastly, as I noted, Denver's downtown was completely revitalized by Coors Field.
The effect that this stadium will have is not really debateable. In fact, we have already seen it. Private investors have purchased dormant buildings in downtown. Construction companies are getting paid. As noted, landlords are experiencing gains. I am not sure how or why people try to deny simple economic principles and facts that are right in front of us, but reading these hokey theories is getting old. There is no debating that the stadium will have a noticeable economic impact in the area. It will.
Also, gentrification occurs with FAR more volume via the purchase/renovation of older properties than it does via new construction. In fact, that is almost implied by the definition of the word "gentrification". Pearl District, Downtown L.A, Denver, SF's Soma district (on and on) are perfect examples. Again, we've already seen this ALL over Sac (Wal project on R ST, Berry Hotel downtown, etc) and there is no reason to believe it will not continue in downtown. In fact, it's already started.
There are plusses and minuses associated with this project. I get it. But what you are suggesting will happen is nearly impossible. In fact, it is impossible.
But the question is how many events will the arena host year round. The reason that neither the Maloofs nor Ranadive did not want to own any arena is that the arena is a money loser because its empty most most of the day, most days of the year. Sleep train advertises what events are coming soon. Its mostly the 41 Kings home games. The rest of the time there really isn't much going on.
Yes people are speculating on what will get built on K Street, but there was a mall remodel in the 1990's that people speculated in the past about, there was light rail line going down K Street which was supposed to bring the area back and there were the tank tracks which also was supposed to bring back the area. When all of these previous projects were announced people initially bought into the the hype and while the project was announced there were people who speculated on real estate in the area. But speculative hype isn't a turn around. The time we will know how successful the project is about a year and half after it opens. If the businesses that open around the new arena last the first year, then it will be a success if they start dying the way Chris Webber's restaurant did in Natomas, it will be a failure. I hope for the sake of the region I am wrong. But I don't think I am.
Eh, bogus. You cite these projects that are hit and miss with demand. Things like Piers, Malls etc do not have a quantifiable demand. A stadium does. Especially when its primary tenant has an established, predictable attendance. The Kings currently hold several of the top 10 longest attendance streaks.
Who said anything about Piers and Malls? (Piers? Who mentioned piers?) The Kings had a long attendance streak when they were doing well, but so does pretty much any sports team that does well--or any sports team where there isn't much competition for the public's attention.
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Now, ignoring the facts stated prior that the stadium WILL in fact host events yr round, the idea that businesses will not survive due to the ebbs and flow in foot traffic is total BS. Is rhis just yiur guess, or do you have any actual proof to back that theory up? The area around Giants AT&T park sprung up because of the baseball stadium, and it has thrived ever since. In contrast, the reverse happened in Seattle after the Sonics left. Many of the businesses in the Seattle Center area packed up and left, and that entire micro economy crumbled. And lastly, as I noted, Denver's downtown was completely revitalized by Coors Field.
I'm not denying that there will be events besides games around the field. I'm not saying they won't survive--but question whether the increased business will live up to expectations, and allow businesses to remain (or attract new business) in the face of increased rent.
Been to downtown Denver. Coors Field was the most boring part, across the street was an empty parking lot, and it was the only place in Denver I was spare-changed by a street person. Same goes for downtown Los Angeles--all the action and interesting stuff is on the end farthest from the sports center and its gaudy tourist attractions, the interesting parts are the areas where old office buildings were converted to condos and people moved in.
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The effect that this stadium will have is not really debateable. In fact, we have already seen it. Private investors have purchased dormant buildings in downtown. Construction companies are getting paid. As noted, landlords are experiencing gains. I am not sure how or why people try to deny simple economic principles and facts that are right in front of us, but reading these hokey theories is getting old. There is no debating that the stadium will have a noticeable economic impact in the area. It will.
Of course it's debatable, there have been a lot of studies about the effects of sports stadiums on downtowns, and the most positive ones say "they sometimes have a positive effect, under certain circumstances." The circumstances most likely to be positive are places where there is only one team, vs. multiple sports, and places where less public money is involved in comparison to private money. So we're in an "okay" position on the first, not so much on the second--that's why I remain merely skeptical about the arena, not an active opponent. But expressing anything other than rah-rah cheerleading is seen as heresy by arena supporters, which is just silly. Just because you don't want to hear a debate doesn't mean it isn't debatable.
Construction companies are getting paid--with money borrowed at high interest, without a clear and low-risk path to being able to pay those construction companies back. There is no debate that there will be a short-term impact on this area--but the long-term risk is what I'm concerned with, creating a sustainable downtown economy. That doesn't happen solely with an entertainment attraction or the restaurants and parking structures that surround it.
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Also, gentrification occurs with FAR more volume via the purchase/renovation of older properties than it does via new construction. In fact, that is almost implied by the definition of the word "gentrification". Pearl District, Downtown L.A, Denver, SF's Soma district (on and on) are perfect examples. Again, we've already seen this ALL over Sac (Wal project on R ST, Berry Hotel downtown, etc) and there is no reason to believe it will not continue in downtown. In fact, it's already started.
Neither the WAL nor the Berry were the product of the arena's presence (since, as mentioned, it does not exist yet.) They were both designed and approved before the arena deal was in place--and used public funding sources. Nor do they represent gentrification: the Berry Hotel served extremely low income residents before its rehab, just as it does now. The WAL will include low-income housing as well as market rate. What we're seeing is real estate speculation--maybe you remember what happened 6 years ago as a result of real estate speculation outstripping people's ability to pay?
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There are plusses and minuses associated with this project. I get it. But what you are suggesting will happen is nearly impossible. In fact, it is impossible.
I think you have very different definitions of "fact" and "impossible." There are pluses and minuses. There are risks, and one of those risks is a failure to generate city revenue from parking and other sources sufficient to repay the bonds. It's not certain--nor is it impossible. It's a sizable risk, and your unwillingness to acknowledge that risk doesn't mean it is not there.
I'm sure that K street will look much different and downtowns are an important part of a city's identity and culture, but actual economic studies consistently note that arenas are no engines of economic change for metropolitan regions as a whole. Here's a quote from a UBS report on the Vikings billion dollar stadium:
"The upshot from UBS: “Independent academic research studies consistently conclude that new stadiums and arenas have no measurable effect on the level of real income or employment in the metropolitan areas in which they are located. Feasibility studies for professional sports facilities often fail to account for the substitution effect. Individuals generally maintain a consistent level of entertainment spending so money spent on sporting events typically comes at the expense of cash spent in restaurants, on travel, and at movie theaters.”
I have no doubt that if you remove a sports team, the immediate area's restaurants and entertainment will suffer--how could it not if you lose your customers? But the research suggests that local economies as a whole are not driven by sports teams. Seattle as a whole, without the Sonics, has a major building boom underway. There are construction cranes everywhere. Traffic on Denny way is ridiculous. There's money flowing in a way that makes Sacramento seem very small town. They'll buy a new team eventually. When they do it will be because they have money not because they need more money.
But the question is how many events will the arena host year round. The reason that neither the Maloofs nor Ranadive did not want to own any arena is that the arena is a money loser because its empty most most of the day, most days of the year. Sleep train advertises what events are coming soon. Its mostly the 41 Kings home games. The rest of the time there really isn't much going on.
Yes people are speculating on what will get built on K Street, but there was a mall remodel in the 1990's that people speculated in the past about, there was light rail line going down K Street which was supposed to bring the area back and there were the tank tracks which also was supposed to bring back the area. When all of these previous projects were announced people initially bought into the the hype and while the project was announced there were people who speculated on real estate in the area. But speculative hype isn't a turn around. The time we will know how successful the project is about a year and half after it opens. If the businesses that open around the new arena last the first year, then it will be a success if they start dying the way Chris Webber's restaurant did in Natomas, it will be a failure. I hope for the sake of the region I am wrong. But I don't think I am.
Well most owners of professional sports franchises are not in the business to turn a yearly profit. They are in for the longterm appreciation/gain. This is similar to rental property, where landlords lose money yr after yr but can experience big gains when they sell the property. So, the moral is that Ranadive and other owners of pro sports teams want newer stadiums because they increase the overall value of the franchise.
Now again, a mall does not have a predictable or stable level of demand. It just doesn't. That is an apples to orange comparison to a sports stadium which you can say with 95% confidence will bring in 20,000 - 25,000 people 41 nights per yr. We have already seen real investment dollars spent in downtown as a direct result of the stadium. There is no guesswork here. Money is and will continue to flow in. It is a fact. And people should stop trying to deny facts. It is getting old.
Will there be "enough" private investment and variable income spent in downtown to transform it into what Majin wants? Who knows. But whatever the case, the economic current has already shifted in downtown.
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