May 1

May 1 Sacramento City Council approves infrastructure financing blueprint for Natomas hospital project

Sacramento (April 30, 2024) - The Sacramento City Council Tuesday unanimously approved a non-binding term sheet for a new financing district to build streets, drainage, and other backbone facilities needed to serve a teaching hospital and higher education campus planned for the site of the former Kings arena in Natomas.

The development, called Innovation Park, would also include 2,500 homes, parks, and a K-8 school, along with office and commercial space. The hospital is proposed by California Northstate University, which currently operates five health science colleges at its campus in Rancho Cordova.

Site owner SBH Natomas, LLC ("SBH"), an arm of the Sacramento Kings, has allocated approximately 40 acres for the hospital.

“A decade ago, the City promised to deliver a transformative development on the site of the former Kings arena in Natomas. Today, we will take one big step toward fulfilling that promise,” said Mayor Darrell Steinberg. “What is now an empty field will become a source of pride and prosperity for Natomas and for our entire city.”

Former District 1 Councilwoman and current State Senator Angelique Ashby initially championed the Innovation Park project. Councilmember Lisa Kaplan has since continued the effort on behalf of Natomas residents.

“Today’s action at City Council to approve the non-binding term sheet for public-financing assistance for Innovation Park with SBH Natomas LLC and CA Northstate University (CNU), is an exciting first step in implementing the vision to transform the former sports complex into a vibrant district, focused on health, education and living that will enhance the fabric of North Natomas and the region.” said Councilmember Kaplan.

The draft term sheet was the result of many months of negotiations between City staff, Mayor Darrell Steinberg, Councilmember Kaplan, and the developers of Innovation Park. The draft term sheet outlines the creation of an Enhanced Infrastructure Financing District similar to the one created for Aggie Square. The EIFD would use increased property taxes generated by development on the site to reimburse the developers for building major infrastructure.

The City has no obligation if the funds are not sufficient to cover the cost of these improvements.

Twenty percent of the estimated $103 million generated by the district would go toward building affordable housing in the area surrounding Innovation Park. In addition, the City’s Mixed Income Housing Ordinance requires that 10 percent of all housing built in the district be affordable. The City’s local hire ordinance requires that local workers be hired to build the project.

Innovation Park is expected to generate nearly $2.1 billion in economic impact for the city during construction and more than $2.7 billion for the city in ongoing operational impacts annually. Construction of the hospital and surrounding districts known as Innovation Park is projected to create over 14,000 jobs within the City. Once fully constructed, the development is projected to generate 7,400 permanent jobs within the city.

Matina Kolokotronis, Chief Operating Officer of the Sacramento Kings, celebrated the advancement of Innovation Park in North Natomas.

“This marks another important step in the process of delivering on the community’s vision for this property,” Kolokotronis said. “As the first large-scale, second-generation redevelopment project in North Natomas, Innovation Park offers transformational opportunities for the region, including affordable housing, healthcare services, and thousands of high-quality jobs.”

California Northstate University's President and CEO, Dr. Alvin Cheung, expressed gratitude for the city's backing of the CNU Medical Center Campus.

“We appreciate the city’s involvement and support of the CNU Medical Center Campus. This is an exciting step forward for the project, which will provide extraordinary services and act as a hub for teaching and healing. The campus will be a place to nurture health and lifelong well-being for our region,” said Cheung.

The Sacramento-Sierra’s Building & Construction Trades Council has thrown its weight behind the project, with Executive Director Kevin Ferreira expressing their strong support of the CNU/Innovation Park EIFD.

“The Sacramento – Sierra’s Building & Construction Trades Council STRONGLY supports the CNU/Innovation Park EIFD. This is the beginning of a process towards creating 11,000 Living Wage jobs/careers with benefits for the residents of the city and region,” said Ferreira.

Read more about the Innovation Park project here.