Yesterday, Sacramento Press contributor Tony Sheppard challenged fellow readers and contributors to share what they would do with a theoretical $250 million, in a way that might bring a greater return than a basketball arena. I started writing a comment but, as often happens, it ended up being an article in itself. So here it is.
Step 1: Build the Downtown/Riverfront Streetcar: $130 Million.
Streetcars are often called "development-oriented transit" because they promote growth of transit-oriented neighborhoods along their right-of-way. Portland is the canonical example of a new city streetcar line spurring growth in the "Pearl" District, a mostly vacant industrial district until installation of a streetcar line, and today Portland’s most densely populated neighborhood. Their investment of $89 million prompted $2.5 billion in private development. Tampa, Florida’s TECO line has spurred $600 million in additional public projects and $700 million in private investment.
The cities of Sacramento and West Sacramento cooperated on a draft streetcar plan in 2008, and revised that draft plan in 2011, approving a route from West Sacramento’s city hall over the Tower Bridge, north to the Sacramento Valley Station and the edge of the Railyards, back down K Street through the heart of Downtown, and ending up at 19th and K Street in Midtown Sacramento. The project had an estimated cost of $125-135 million. The Memorandum of Understanding between the two cities was updated at the most recent Sacramento City Council meeting, but was kind of overshadowed by other items on the agenda. One of the funding mechanisms suggested for building a streetcar line, used in Portland and other cities, is a parking management plan. Parking revenue is used to repay construction costs for streetcar lines, and market-priced parking encourages streetcar use and "park-once" parking by providing a way for people to get around a neighborhood without a car. This plan is ready to go, the city of West Sacramento has collected extra sales tax revenue for years in anticipation of a streetcar line, but Sacramento has not backed up our neighbor city with construction funds. By funding the process locally, we don’t have to wait for future rounds of federal funding that might never arrive. By partnering with the city of West Sacramento, the city of Sacramento won’t have to come up with those funds alone.
Step 2: Add market-rate housing along the right-of-way: $70 Million.
We’re not the only city with a troubled downtown mall. Providence, Rhode Island’s "Providence Arcade" was in even worse shape than Downtown Plaza–it closed completely in 2008 due to a lack of tenants. Providence Arcade was originally built in 1824 (older than Sutter’s Fort) and is a National Historic Landmark, so rather than knock it down for a new project, they decided on a different strategy. With an investment of $7 million, they built 48 small-scale urban lofts (between 300-500 square feet) and 14 small shops, aimed at local businesses instead of conventional mall chains. Before the mall reopened, they had a waiting list of tenants twice as long as the number of available spaces.
Assuming we want to think larger than Providence, but use the idea as a model, a fund of $70 million could be used to create 10 times as many market rate small apartments and shops in existing buildings along the streetcar alignment. So they have a National Historic Landmark? So do we–in Old Sacramento. Most of Old Sac’s ground floor shops are full, but about half of the upstairs offices are vacant. Old Sacramento’s residential buildings, however, are almost always at capacity, suggesting a greater unmet need for housing. Old Sacramento’s restored historic buildings and reconstructed buildings can fill vacant spaces with residents, bringing economic activity to the district and "eyes on the street" A streetcar that lets Old Sacramento residents easily serve basic needs without a car would also address concerns about lack of parking access and permits in their neighborhood.
Outside of Old Sacramento, there are many other downtown buildings along the streetcar alignment that sit vacant, including city-owned properties like the Plaza Building, or privately owned upstairs rooms currently sitting vacant like those above Procida Florist on J and 12th or Hamburger Pattie’s on J and 17th, that could be reactivated by adding residents interested in small, efficient places to live in the downtown core. Today’s generation of professionals actively seek homes in the heart of downtown, and new high-tech companies choosing headquarters look for facilities in emergent downtowns. They prefer urban neighborhoods where their prospective employees can find the amenities they seek, including housing within walking distance of the office.
In addition to 480 apartments, this project would pay for 140 small stores, with priority for locally owned businesses, to open along the streetcar right-of-way. These stores could go into the ground floor of currently vacant buildings, especially long-vacant and blighted spaces like the ground floor retail space of the Renaissance Tower at 8th and K Street, vacant for over a decade.
Complete the 800 K Project: $30 Million.
Across K Street from the Renaissance Tower is a vacant quarter-block at 8th and K Street, and three buildings at 8th and L Street, including the Bel-Vue Building. A proposal for this block was cut short by the end of redevelopment, but a portion of the $250 million (along with existing funding sources like the $5 million MOPA fund held by the City of Sacramento) could reactivate the dormant 800 Block project, to construct a new mixed-use building at 8th and K and rehabilitate the Bel-Vue. This project included both larger market-rate housing and smaller mid-income housing on the site. A recent article in the Sacramento News & Review mentioned the hesitance of banks to fund urban infill projects that don’t meet the standard suburban mold, but a city fund to create these projects could provided needed construction dollars in a way that meets contemporary market needs.
Each new downtown resident spends a much larger proportion of their disposable income within the downtown district than a commuter or suburban visitor–at an approximate ratio of 20:1. 500 downtown residents, spending money in their own neighborhood, have an economic effect equal to 10,000 visiting suburban residents. But, in addition to their own spending power, the presence of an additional 500 or more new downtown residents will draw visitors. The stores opened to serve the daily and occasional needs of downtown residents will also serve the needs of visitors and commuters. Friends and family visiting downtown residents will also become patrons of downtown businesses, and recreation/entertainment venues will draw both local and regional customers. And these downtown residents are far more likely to work downtown, meaning they won’t add more cars to our highways at rush hour.
Some may have noticed I haven’t mentioned the Downtown Plaza property in this plan. That’s because, geographically, it is probably the best spot for a sports arena and entertainment complex of some type. But a more economically healthy downtown, one based on mixed use instead of solely focused on drawing suburban visitors, will be much better suited to draw increased private investment and make a downtown arena economically feasible with a smaller ratio of public investment to private expenditure.
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