Here comes success!
I used to enjoy walking around the end-of-life Downtown Plaza because it was like being an anthropologist, exploring the ruin of a bygone commercial era. We got to watch the extinction of suburban-style enclosed shopping malls in action.
At the end of its life, when it couldn’t compete with newer slicker malls out in the ‘burbs, the Plaza managers started leasing to more offbeat tenants. There was the guy who filled a storefront with his project to beat a Guinness world record for the largest collection of elephant figurines and other elephant themed paraphernalia. There was that Zhug Life, whatever that was, I can’t remember. I think there was a tattoo shop. That’s the kind of stuff you can do in a dead mall.
But Downtown Plaza was always a Deathstar plunked down in the middle of the central city. It broke up the grid, it had little interaction with the streets around it. And as it deteriorated, it took the neighborhood down with it. Long before the new Sacramento Kings arena was proposed for those blocks, I suggested we ought to blow up the mall and start over.
This dead mall effect was only made worse by the perpetual redevelopment of K Street and other blocks near the mall. The city would use its power, and its purse, to assemble properties in order to hand them over to favored developers for various projects. And that caused all kinds of distortions. Some enterprising folks bought up properties and sat on them forever, hoping redevelopment would mean a big pay day. Small businesses were forced out, there were lawsuits. Whole blocks remained vacant, year after year.
So good riddance Downtown Plaza, and the whole jammed up redevelopment mess that persisted there for so long. (For now at least, until the new Golden 1 Center becomes obsolete.) In that sense, at least, it’s easy to call the new arena progress.
Is it $18 million a year in public money worth of progress? That’s a different question, and one I wish would be explored when media outlets publish their stories declaring the arena a success.
We know it’s not a money-maker, despite the perception that it is. In order to build the arena, the City issued about $300 million in bonds, and it has to make annual payments on the bonds, eventually about $18 million a year.
It will generate some new sales taxes, and new property taxes from new development around the arena, etc. But any new tax revenue is split by the city and the county and that state. And any additional tax increment that the city gets is still way below what it needs to make the bond payments every year. City officials don’t claim that city will make money on the arena. But they’re not always clear about the economic benefits either.
But there are other ways to think about whether the City’s investment is paying off. To help frame the issue, I talked to an urban economist that I know, Dr. Rob Wassmer, who teaches public policy at Sacramento State, and is the director of the Master’s Program in Urban Land Development. I asked how we can measure success, and what the City should do know to make sure we can get the biggest bang for our buck in new economic development. Whether you’re a supporter of the arena plan, or a skeptic, I think there’s something in this interview for everyone to disagree with, and to think about.