Think Big task force expands menu of possible projects for downtown Sacramento

07/04/2012 12:00 AM

07/04/2012 1:35 PM

His quest to construct a new sports arena in Sacramento now on hold, Mayor Kevin Johnson said Tuesday he was broadening the focus of his Think Big arena task force to explore other large projects throughout the city's downtown.

That committee – which raised roughly $500,000 over the past year in its effort to build a new arena for the Sacramento Kings – will begin by focusing on development ideas for the downtown railyard. While an indoor sports arena remains a possibility, Think Big will also examine the feasibility of a long list of concepts that includes a major league baseball stadium, corporate headquarters and an entertainment district.

Think Big will also explore how best to redevelop the city's riverfront, continue the revitalization of K Street and work on a plan to revamp the Westfield Downtown Plaza. Johnson said the committee – made up of local elected officials, business representatives and union leaders – would continue to operate with private funds.

Johnson announced Think Big's new focus after AEG, an international arena operator, informed the city that it was withdrawing from a fleeting effort to build a new downtown sports arena without the Kings' involvement.

AEG had previously agreed to contribute $58.75 million toward a proposed $391 million arena in exchange for operating the facility and receiving a large share of the profits.

But company officials determined that project does not make economic sense without an anchor sports tenant, the mayor said. The Kings pulled out of the plan earlier this year, citing financial concerns.

"I have to move on," Johnson said.

City officials were also concerned that Johnson's "Plan B" – to build an arena without the Kings' help – would have harmed the city's finances. The Kings owe $67 million to the city, and a clause in their contract could have allowed them to walk away from that debt if the city helped finance a basketball arena competing with Power Balance Pavilion.

Michael Ault, the executive director of the Downtown Sacramento Partnership, said officials "need to be looking at other opportunities and not standing still."

"The day the arena issue fell apart, it started this what's-next moment," he said. "There are a lot of other projects and priorities that we need to focus on. So much was put on the arena being a game-changer, but ultimately, waiting for one project can't be the answer."

To begin with, the mayor and his task force will work with Inland American Real Estate Trust – the Illinois firm that owns most of the railyard – on options for developing the 200-plus acres of vacant land north of a proposed transit center on the site.

Jared Ficker, a spokesman for Inland, said the company welcomes the help of Think Big.

"What they can do is imagine what's possible (for the railyard) and then essentially connect that vision with someone who can come in and execute on that," Ficker said. "Think Big helps build community support for a project of this magnitude; they have an understanding of what the community wants."

The railyard project is entering a pivotal stretch.

Infrastructure development is continuing inside the site – described as the largest urban infill project in the nation. Two bridges have been constructed to extend downtown streets into the land, and officials are close to relocating rail tracks to open up space for road expansion.

City officials have also obtained key funding to rehabilitate the existing train depot.

In April, an option for the previous owner to buy back into the project expired, giving Inland more freedom to either find a master developer or sell the land. Ficker said Inland has received "a tremendous amount of interest" from firms who want to act as the project's developer and others who may want to purchase the land.

The mayor is seeking to have Think Big play a hands-on role in the railyards' immediate future.

The key to Think Big's work is a proposal to generate roughly $250 million out of the city's downtown parking operations, a plan that would have represented the city's contribution to the failed arena project. Under plans that would require City Council approval, the city would either lease out parking spaces and garages to a private vendor, or form a public finance authority to issue bonds repaid by future parking revenue.

City officials have not abandoned those ideas, despite the arena project's demise.

"Those parking dollars are something that's in play," the mayor said. "We don't want to do anything with it that doesn't have a long-term investment and a huge impact. To justify a public investment, it has to have a return, and that return can't be one-time. And the railyard certainly has an ability (to generate a long-term return)."

Johnson's use of a committee operating outside of City Hall is not new.

The mayor has used a similar model for initiatives focusing on education, homelessness and the arts. But Think Big – armed with corporate donations and led by the mayor's former chief of staff – will take on a more high-profile role as Johnson prepares to begin his second term.

Johnson said the city does not have the money to do the work on its own.

"When you don't have enough resources, you need an entity looking at public-private partnerships, you need an entity that's out exploring options that typically are broader than what the city can do," the mayor said. "Think Big should complement what the city is doing."

Kunal Merchant, the committee's executive director, said Think Big had raised roughly $500,000 over the past year. That money largely came from sponsors who also contributed to the effort to help keep the Kings in town last spring.

Merchant said the committee would continue seeking donations from the private sector and foundations interested in funding economic development initiatives.


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