Sacramento clears way for hospital at former Kings arena in Natomas. Will it get city money?
The Sacramento City Council Tuesday cleared the way for a $1 billion hospital and medical school in North Natomas to start construction, but a hefty request for city funding could be on the way.
California Northstate University plans to build a hospital and so-called innovation campus at the former Sleep Train Arena.
The move fulfills a promise local officials made to North Natomas residents that a big, quality development would replace the arena, which has sat vacant since the Kings moved downtown in 2016, Councilwoman Angelique Ashby said.
“I refused to cave to anything less,” Ashby said before the council voted 9-0 to approve the rezoning. “I need to thank my community for trusting me and giving me 10 years to get to this solution.”
She said the project will create over 1,500 local union construction jobs, followed by 6,000 permanent ongoing jobs at the hospital and medical schools.
The Sacramento Kings donated 35 acres of the 170-acre site to the hospital, Ashby said. On the remaining acreage, hundreds of new housing units will be built, Ashby said. Some of the housing units will be for students, faculty, senior citizens, and some will be open to the general public, Ashby said. At least 10% will be designated as affordable housing.
The project would also include a new Natomas Unified School District campus, retail space, medical offices, a childcare center, and a care facility for seniors, officials said. It would include a sprawling 25 acres of open space with parks and bike trails, Ashby said.
The Kings plan to demolish the former arena within six months, Ashby said. The hospital — which will be 11 to 14 stories and include 250 to 500 patient beds — will take eight years to build.
Sacramento incentives coming?
California Northstate, a for-profit medical school, plans to ask the city for incentives based on the number of jobs it creates, similar to the deal the city gave Centene to locate its headquarters to North Natomas.
Under the Centene deal, the city will pay up to $13.5 million to the health insurer — $9,000 per job that is new to the region. Most of the new 6,000 hospital jobs will be new to the region, Ashby said. So if the city gave California Northstate the same amount it gave Centene, it would be $54 million.
The hospital also plans to ask the council to create a so-called enhanced infrastructure finance district, Jeff Dorso, senior vice president and general counsel for the Sacramento Kings, told the council.
Under that mechanism, new property tax revenue that would normally go toward city coffers is redirected toward helping the developer fund the project — paying for infrastructure such as roads, storm water and sewer improvements. The city recently approved a financing district of up to $30 million for the UC Davis Aggie Square project.
Dorso did not give a rough figure for the North Natomas proposal, but said it would include a long and transparent public process.
Questions over Medi-Cal, workforce
Council members Jay Schenirer and Katie Valenzuela pressed California Northstate to commit to accepting MediCal patients at its planned hospital.
Dr. Alvin Cheung, president and CEO of California Northstate, said the hospital will accept its “fair share” of MediCal patients.
“You have my promise we will do exactly what other members of the health care hospitals in this region,” Cheung said.
While Valenzuela lauded the hospital for using unionized construction workers, she pushed him to allow unionized hospital workers.
“I am very open to a unionized workforce,” he said.
The hospital is currently a private, for profit company. Cheung said it could become a nonprofit. Schenirer and Valenzuela said they will want to know more about that process.
Councilwoman Mai Vang and Schenirer encouraged Cheung to commit to hiring a certain number of employees from certain zip codes, such as nearby Del Paso Heights, under a “community benefits agreement.” The city signed a similar agreement for Aggie Square.
Hospital almost went to suburbs
California Northstate initially looked to Elk Grove to build a new hospital in the Sacramento region. It scrapped that plan about a year ago, after the Elk Grove Planning Commission rejected the hospital project. Many nearby residents and environmental groups, including the Sacramento Sierra Club, opposed the hospital, which would have been near the Stone Lakes National Wildlife Refuge.
Rancho Cordova was also floated as a possible location for the hospital, but the university chose Sacramento instead.
Mayor Darrell Steinbeg said the project signals the city is coming farther in its mission to shed its image as just a “government town.”
“Let us not forget thousands of people are moving to this community from all over the state, including the Bay Area,” Steinberg said. “Investors are putting our resources in the heart of our city, in downtown, in Natomas and elsewhere, and we are a city on the rise.”
This story was originally published February 16, 2022 at 3:25 AM.
