Business & Real Estate

Sacramento is either ‘unknown or misunderstood.’ Will that change in 2017?

Darrell Steinberg sworn in as Sacramento’s 56th mayor

Six months after winning a decisive victory in the June primary, Darrell Steinberg was sworn in as mayor on Tuesday night.
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Six months after winning a decisive victory in the June primary, Darrell Steinberg was sworn in as mayor on Tuesday night.

After a year focused on opening the Golden 1 Center, Sacramento’s civic and business leaders have their sights on 2017 initiatives, from reeling in technology startups from the Bay Area to examining proposals for an expanded convention center. The real estate market is to continue its red-hot streak as the area’s population rises in part because of the 15,000 to 20,000 people expected to migrate in 2017 from the Bay Area, according to the Greater Sacramento Area Economic Council. Here are a few things to look for in 2017:

JOBS

Mayor Darrell Steinberg has vowed to make Sacramento a center for jobs. The former president pro tem of the state Senate said he is lobbying companies to look at Sacramento. The mayor plans to travel to the Bay Area, for example, in a bid to ask high-tech startups to consider the capital region before moving out of state.

“Sacramento has long been a proud government town … but that’s no longer enough,” Steinberg said in a recent interview.

The “real test,” he added, is whether a “young person who graduates from school either in or outside Sacramento chooses Sacramento as their home.”

Steinberg, along with Barry Broome, president of the Greater Sacramento Area Economic Council, are trying to change Sacramento’s historic reputation as a government and military town.

“Nationally, we’re either unknown or misunderstood,” Broome said. “People in the Bay Area still think it’s 1978 in Sacramento.”

The misunderstanding is causing people to shy away from the city as a viable jobs center, but Broome and Steinberg emphasize that Sacramento is part of a much-larger Northern California market that also counts San Francisco and Silicon Valley.

“We’ll take any job we can get,” Broome said, though noting that the council is going after “lifestyle, privately held companies.”

Describing Sacramento as “young, smart, talented” and “on the rise,” Broome hopes the council’s marketing campaign will yield dividends in 2017.

REAL ESTATE

The real estate market will continue to boom in 2017, according to Pat Shea, president of Sacramento’s Lyon Real Estate. He predicts continued strength in the resale market, which has been squeezed by soaring demand and low supply.

“We’ve been on this trajectory for an extended period of time,” Shea said. “I can tell you that every area of our region is in high demand.”

For 2017, Shea thinks the market will remain relatively “slow and steady,” after a few years of feverish growth. Last year, home prices in the Sacramento region appreciated by about 8 percent. According to Shea, the pace will probably settle to around 5 percent this year.

The dearth of available units has some homebuyers looking at new lots. Builders are cautiously optimistic this year, though they acknowledge the pace of development still won’t recover to pre-recession levels.

“All indicators are really strong,” said Aren Bazzocco, division president for Taylor Morrison, a homebuilder in Sacramento.

Collectively, about 4,400 new homes were constructed last year, a far cry from the 18,000 units at the peak before the market crash.

“There’s caution, definitely. We’re not in a super growth mode,” Bazzocco said.

Taylor Morrison is forecasting a 10 percent increase in new home sales for 2017 over last year, when it sold more than 500 houses in the Sacramento market.

Taylor Morrison forecasts a 10 percent increase in new home sales for 2017 over last year, when the company sold more than 500 houses in the Sacramento market.

DEVELOPMENT

The city is to unveil plans for an expanded convention center that would fuel ancillary businesses such as restaurants and hotels in the downtown core. Steve Hammond, head of the Sacramento Visitors & Convention Bureau, said in November that he expects new hotels to be built in downtown only after the city’s convention center is expanded.

Development of the riverfront district on both sides of the Sacramento River is a hot topic among civic and business leaders. Sacramento Mayor Steinberg has nominated the riverfront district as a key priority for his administration. West Sacramento Mayor Christopher Cabaldon said in November that “interest remains high” for a new luxury hotel on the Yolo County side, adding that his city is still in periodic discussions with developers and Marriott International. Previous attempts to bring a waterfront hotel to West Sacramento have ended up failing because of funding problems.

Aside from the riverfront, Steinberg said he wants the city to refocus its efforts on cultivating the historic business corridors, whether it’s Del Paso, Franklin or Stockton boulevards.

“I didn’t show up to the City Hall on the first day. I showed up to the neighborhoods,” Steinberg said.

Richard Chang: 916-321-1018, @RichardYChang

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