Sacramento leaders eye Natomas hotel tax to boost ‘recession-proof’ youth sports

Sacramento Councilmember Lisa Kaplan says her constituents frequently ask her the same question: What is the future of North Natomas Regional Park?

Plans for the park first emerged in 2001, envisioning the 207-acre site with a botanical garden, dog park, skateboard park and soccer fields.

Few of those ideas have been realized 25 years later. The dog park was added in 2009, and youth baseball/softball fields arrived in 2013. The North Natomas Aquatic Complex opened in 2022. But a vast portion of the site remains undeveloped.

Now, Kaplan and the city of Sacramento are working on a tax structure to generate money for the grounds. She hopes to establish a Natomas Tourism & Business Improvement District, relying on hotel tax for activities that would boost tourism in the area.

Coaxing tourists to Sacramento remains a high priority for city officials. City revenues have failed to cover expenses for three consecutive years. Repeated funding cuts have left Sacramento officials searching for creative ways to generate more revenue.

Sacramento’s main hotel tax — also known as transient occupancy tax, or TOT — is a 12% percent levy on all stays at hotels, motels or short-term rentals for less than 31 consecutive days. An additional tax — the rate varies across the city but averages 2.4% — funds sales and marketing work by the local tourism bureau, Visit Sacramento. That tax is charged to hotels, but the cost can be passed through to the guests. And a 1% tax on gross room rent was created in 2018 to fund the mortgage for a ballroom project at the downtown convention center.

Kaplan is proposing what she described as a “slight” increase to the tax charged to hotels in North Natomas.

Hoteliers must agree to the tax. Visit Sacramento would hold the money, and form a subcommittee of hoteliers from North Natomas to oversee spending of the funds, Kaplan said.

Mike Testa, president and CEO of Visit Sacramento, said newly built soccer fields in Placer County fill up with tourists every weekend. And parents will spend money on youth sports even amid a faltering economy.

“In some ways, it’s recession-proof,” he said.

There are no other local hotel tax overlays in Sacramento like the one Kaplan proposed, Testa said.

“I think it’s a visionary approach,” he said. “It gives them the ability to drive their own destiny.”

The park’s aquatic complex is the site of Sacramento’s first Olympic-sized pool. The City Council in March accepted a $500,000 grant from California State Parks for improvements there.

Kaplan’s proposal calls for building 10 soccer fields, which could host sports tournaments to help fill North Natomas hotels, she said.

“Soccer is huge all over the city of Sacramento,” Kaplan said. “People are going to Davis and Roseville and Tracy, Modesto and Rancho Cordova.”

She estimated the new tax could raise $800,000 to $1 million per year. There are 10 hotels in the area, according to the proposal.

North Natomas boasts the highest regional hotel room occupancy, Testa said, partly because of its proximity to Sacramento International Airport.

Still, the Natomas area has a high concentration of hotels, and the region needs to boost its tourism draws to fill them, said Safal Mengi, the general manager at Aloft Hotel and Wyndham Garden in North Natomas.

“I’m not selling out,” he said. “I wish I were.”

With even more hotels under construction in North Natomas, Mangi said the area needs a new strategy to attract new tourists and help local restaurants. He said money collected under the current transient occupancy tax at his hotels and others in the area doesn’t return to North Natomas.

“Instead of us just sitting here and taking it, I like that we are able to at least do something else about it,” he said.

Mangi worried some of his customers — such as the airlines whose crews rest at his facilities — might object to the additional cost of a new tax structure. But he still marveled as he thought about the increased tourism new soccer fields could generate.

“We need our own control in Natomas,” he said. “I want those soccer fields. Imagine the community.”