Large Sacramento downtown property owners to vote on streetcar tax

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A ride on the Portland streetcars shows that streetcars are not fast, but they are faster than walking.
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A ride on the Portland streetcars shows that streetcars are not fast, but they are faster than walking.

Sacramento will attempt to kick-start plans for a downtown streetcar line and come up with the elusive last dollars to pay for it by asking hundreds of downtown commercial property owners this spring if they’d be willing to kick in $2 million a year.

Under the new plan, owners of 350 large properties will be asked to vote in late May on forming themselves into a tax district to help pay the project’s operations costs once it is built.

It will be the second attempt in three years by city officials to win a downtown vote that they say is needed to pull together the final pieces of funding to get the long-stalled street rail system up and running.

Sacramento and West Sacramento officials proposed the 4-mile streetcar line a decade ago as an economic development tool and as a way of allowing future generations of downtown residents, workers and visitors a way around town and across the river via Tower Bridge without using cars. The project costs continue to rise, though, and are now estimated at $200 million.

The Sacramento City Council on Tuesday gave its streetcar project staff the go-ahead to set up the May vote to create the “Sacramento Streetcar Community Facilities District.” The council will hold a public hearing on March 7 to talk about the upcoming vote.

Unlike a previous failed vote that included all properties within three blocks of the rail line, this year’s effort will involve only larger commercial properties downtown in that three-block radius. Those mainly would be parcels that are either 12,600 square feet in size or some smaller parcels that have buildings that are 40,000 square feet or larger, city planner Fedolia Harris said.

No downtown residential properties will be involved in the vote, nor will their owners or residents pay the annual tax, Harris said. The failed 2015 vote would have required all property owners within three blocks of the line, both residential and commercial, to pay the tax.

The new vote, Harris and streetcar advocates say, is focused on private businesses that stand to benefit the most financially. The closest properties will pay a higher rate based on an economic analysis that concluded those property values will increase because of proximity to the streetcar line.

The proposed tax district includes parcels in the downtown railyard, the Golden 1 Center arena and adjacent Downtown Commons development, Macy’s, the Kaiser Permanente site under construction on J Street, the Hyatt, Sheraton and Citizen hotels, as well as offices and other retail buildings.

Proposed streetcar tax district

If they approve the tax district, owners of these 350 downtown and midtown properties would collectively pay $2 million per year to help fund ongoing operations of the streetcar line.
Map of tax district and streetcar route 
Source: City of Sacramento

If approved, the district tax collection would begin in December and sunset in 2042.

The overall streetcar construction financing is expected to come from a variety of sources, including state, county, and Sacramento and West Sacramento city funds.

The biggest expected contribution, which would come from the federal government, is not yet nailed down.

Sacramento previously won federal OK to provide $75 million to help build the project, although no formal grant agreement can be signed until Sacramento can secure local match money. This year, proponents say they plan to amend that request, asking the Federal Transit Administration to increase its contribution to $100 million.

Local officials have said they do not anticipate major changes in the federal program under the new Trump administration, but have not received any word from the new Washington, D.C., leadership on its plans. At her Senate confirmation hearing two weeks ago, the Trump choice for transportation secretary, Elaine Chao, offered no detailed information about potential funding priorities.

The cities of Sacramento and West Sacramento will act as joint owners of the streetcar system. They will set up a governing board that is expected to hire Regional Transit as streetcar operator.

The planned line would stop at Raley Field and the Bridge District in West Sacramento, as well as Old Sacramento office buildings, Golden 1 Center, the Capitol, the Sacramento Convention Center, and hotels and nightspots in downtown Sacramento.

A ride on the Portland streetcars shows that streetcars are not fast, but they are faster than walking.

Tony Bizjak: 916-321-1059, @TonyBizjak