Sacramento leaders: Sac State project will be ‘transformative’ for downtown
AI-generated summary reviewed by our newsroom.
- Meta pledges $50 million to fund demolition and abatement of three Capitol Mall buildings.
- Sac State plans downtown campus with housing, hotel, AI center and public affairs school.
- Legislative tools and EIFD rules aim to leverage tax increment and attract development.
City and state leaders cast Meta’s $50 million donation to demolish and abate three hulking downtown buildings as a turning point for Sacramento’s urban center.
The effort marks “one of the most ambitious and transformative redevelopment plans in downtown Sacramento’s history,” said Jason Kenney, chief deputy director of the California Department of General Services, at a news conference Friday morning. Michael Ault, who has led the Downtown Sacramento Partnership since 1997, said it could be “the most significant change for the future of downtown Sacramento that we’ve seen.”
Sacramento State aims to convert the three excess government buildings along Capitol Mall into a downtown campus with housing, a mixed-use performing arts space, a boutique hotel, a dedicated AI center, and a school of public affairs that offers courses in public policy, criminal justice and international relations.
The project has been discussed publicly for months, but funding was unclear until Thursday, when the governor’s office announced Meta’s $50 million contribution. The tech company’s grant will fund the first steps of the development: the abatement and demolition of the buildings.
Barry Broome, who leads the region’s main business attraction group, framed the project as a stroke of ambition for a city that needs it.
“We’re a little bit of an underdog town,” said Broome, president and CEO of the Greater Sacramento Economic Council. “If we get the right attitude and we punch above our weight, people are going to be telling the story about the rise of Sacramento.”
University President Luke Wood said the school isn’t ready to release projections for the total price tag of the project yet, because there are other “industry partners” who may want to join the effort.
“That may change the calculus,” he said.
‘Serving our students’
Broadly, he said, the university is becoming more enterprising, looking to generate revenues through the hotel and event space that the project will include.
“When we do something, it’s about serving our students, but it’s also about generating revenue. So that when the state budget goes up, the state budget goes down, we’re able to be more consistent as a university serving our students,” Wood said.
Senate Majority Leader Angelique Ashby, D-Sacramento, recently passed Senate Bill 516, which will lift some of the barriers to establishing a certain type of special taxing district in the city and in Sacramento County. Ashby confirmed, Friday, that the bill was passed with Sac State in mind.
“It was really about this project, and other projects that could be in this area,” Ashby said, referencing potential development in Old Sacramento, or the establishment of new hotels.
‘Never seen this kind of investment before’
The mechanism, an enhanced infrastructure financing district, or EIFD, uses expected increases in property tax to repay developers’ costs for building infrastructure. Sacramento has created EIFDs previously for UC Davis’ Aggie Square development, and for the new Sacramento Republic FC stadium in the Railyards.
Projects in Sacramento and elsewhere in the region have been held back, in the past, by the high cost of demolition, Ashby told onlookers Friday on the Capitol Mall median, who had gathered between the towering, surplus state buildings.
“The money from Meta gives us a fighting shot,” Ashby said. “Sacramento has never seen this kind of investment before… today it is our turn.”
She touted the recently-formed Capital Caucus, a group of legislators from the Sacramento area who plan to advocate on the region’s behalf.
“Sacramento,” she said, “will no longer be left behind.”
This story was originally published January 30, 2026 at 12:56 PM.
