Quote:
Originally Posted by wburg
Yes, public-funded arenas can cause excitement, activity and a sense of euphoria. So does cocaine. But there are some unpleasant side effects to that substance.
Those who pay attention to things in cities other than Sacramento will note that there's an economic boom going on, our closest urban neighbor is undergoing an unprecedented economic cycle that pushed its land values above New York, and there is also a nationwide shift back to urban centers, especially in second-order cities like Sacramento. So yeah, I'd suspect these larger economic factors have a bigger overall effect on the local market, but the arena has given it, well, let's call it a "bump."
As to relaxed parking requirements and historic rehab, well, a lot of the projects generating the most excitement are due to the recently enacted zoning code, that made a lot more urban projects possible (through things like eliminating parking minimums) including the arena, which, as you may recall, has a very small parking lot. Some are due to other subtle changes, like three-lane one-way streets being converted to two-lane streets with bike lanes--resulting increase in bike and pedestrian activity made businesses flourish along those routes, since nobody wants to stop and shop on the pseudo-highway. And some of the most exciting projects in the city are taking place in historic properties being rehabbed. These are projects facilitated through changes in code. They have contributed to the central city's overall economic health, mostly through projects entitled before the arena plan was finalized, by adding new housing--we're already up about 2000 housing units since 2010, which, considering there were 20,000 units then, means about a 10% population increase in 4 years, not counting units vacant in 2010 due to foreclosure that are now largely occupied. The cocaine has resulted in banks being a bit freer with money--again, we'll see if the long-term difference pans out. We were largely on an economic upswing.
It's not an all-or-NOTHING thing, but, at best, the arena is one of many factors occurring right now, some healthy, some not-so-healthy. I'm not of the "make no small plans" school of thought--cities are made up of thousands of small plans, that add up to far more than the sum of their parts, and things like code changes or having the existing urban fabric to rehab can make a large systemic difference, even if it's not one Big Shiny Thing everyone can point to. The potential problem is, what happens when we get to the bottom of the arena cocaine bag and the buzz wears off? Buy another bag, or crash?
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Well, despite an original bitter first couple of sentences (which apparently compared the new arena to meth-heads (really Bill?), there's a good point in this angry little diatribe. There are a myriad of factors that contribute to a city's development and prosperity. Many of them are small and subtle, but some are big and clear and even flashy.
The foundation of them all is the business cycle and overall health of the economy, which wburg references is other posts as well. One of the things I was most proud of with The Village at Sacramento State was how we were bucking the economy by bringing a funded $500 million project to Sac State in the middle of a crippling recession (remember, that was 2008-2010).
If the project is superb, it can overcome a weak market, but it really has to be incredible with a ton of factors going its way to attract capital. Most projects, even the good ones, don't meet that standard.
So if we were still in the depth of the recession, it is unlikely we would see the catalystic, economic impact we are seeing now from a downtown arena. The ancillary development in downtown Sacramento as a result of the new arena undoubtedly benefits from a growing economy.
It also benefits from the confidence such a project shows for Sacramento. Don't underestimate this. Developers and investors want to be part of energetic and frankly, "cool" communities that reflect a swagger (if you will) and confidence by citizens who believe in themselves and their city. Kimpton doesn't come to Sacramento without it no matter what the pro formas say (the pro formas wouldn't be believed without it).
I think Sacramento was severely damaged by a lack of confidence in the last boom. It started to believe in itself about six months too late, and it cost them.
With the new arena, or any other catalyst development, the question is "How much of the development in this new cycle would have happened anyway? How much of it would had been completed without the additional debt?"
Those are completely legitimate questions that posters here like wburg and snfenoc are absolutely right to ask.
In San Diego, we saw two distinct periods of growth downtown as a result of catalyst development. The first was in the late 80s/early 90s in the Gaslamp and Marina with the completion of the convention center (and don't believe those who cite Horton Plaza. It did nothing to spark development downtown. Still a nice project mind you, but very few people moved downtown because of it.). The second has picked up (with the economy) in East Village following the completion of Petco Park.
When you ask planners, city officials, developers and residents what impact these two projects had on Downtown, the common thought seems to fall in a net increase of between 30-40% (in terms of investment) in the adjacent neighborhoods than what would have occurred without the projects.
Based on my own experience, I think this is pretty accurate and probably the range you can expect in Sacramento. Catalysts like a new arena can't produce fundamental changes unto themselves (nether can zoning changes or relaxed parking requirements et. al.), but if the timing is right, they can super-charge a community and produce investment results significantly superior to any other single factor and/or what would have occurred otherwise.
As to the sneering little comparison of new arenas to vicious drug abuse. Well, there are wburgs in every community. There is nothing unique about them. They often proclaim lofty goals and desires to work together to find solutions, but after they lose a couple of rounds and their resentment reaches constipation anger levels, the mask inevitably comes off. It's never pretty.
Sacramento is in outstanding position for an absolute renaissance that will be unmatched for several generations. The downtown you will thrive in in 10 years will be unrecognizable from what you see today.
I envy you...
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