Sacramento City Council unanimously approves 3 tourism-boosting proposals

The Sacramento City Council on Tuesday unanimously approved a trilogy of projects aimed at revitalizing the Old Sacramento Waterfront and boosting tourism in the City of Trees.

Mayor Darrell Steinberg unveiled the proposals last week during a press conference at the waterfront. Flanked by city and state leaders, he presented a plan that includes building a new multi-million dollar hotel and upgrades to boardwalks, docks, buildings and other infrastructure in Old Sacramento. The plan would also give Visit Sacramento, the city’s tourism bureau, $2 million to attract more festivals.

City leaders announce new plan to revitalize Old Sacramento waterfront

And he spoke positively about all three proposals before they were presented to the City Council on Tuesday: “Sixty years ago was the last time the City of Sacramento put together a plan to develop the Old Sacramento Waterfront,” he said. “The biggest opportunity we had 6 years ago — where we were going to invest $45 billion — was halted by COVID.” 

He added that this iteration of the plan is still bold, and “maybe it’s even better because last time we didn’t really think as much about how we were going to induce more private investment.”

Sacramento Mayor Darrell Steinberg speaks at a City Council meeting on Tuesday, Nov. 19, 2024.Gerardo Zavala/CapRadio

All three projects are expected to cost $47 million in city funds. Many of these projects will be funded by the city’s Transient Occupancy Tax (TOT), also known as the hotel tax. The 12% tax is charged to anyone who has booked a hotel room or other short-term occupancy within the city. 

Dozens of business owners and community leaders spoke in favor of the proposals Tuesday night, pointing out that the revitalization projects would draw in more tourists — and therefore bring more economic growth to the region. 

“We’ve got about 160 property and business owners in Sacramento that I think, over the years, would tell you they’ve waited for an opportunity to see this type of investment,” said Michael Ault, Executive Director of the Downtown Sacramento Partnership. “We’re excited about it, and we’re excited about the momentum in Sacramento.”

Other Sacramentans said they were supportive of the plan, but encouraged the city to continue investing in local infrastructure. That included Bobby Moreno of the Sacramento United Soccer Club.

“We are in favor of this project and this initiative that revitalizes Sacramento,” he said. “I want to remind you and emphasize the significance of Granite Regional Park facility upgrades, not just for the Sacramento United Club, but for the entire Sacramento region.”

Steinberg suggested the incoming Mayor and City Council set a meeting to discuss other infrastructure projects that could become future economic drivers.

Bobby Moreno of the Sacramento United Soccer Club speaks at a Sacramento City Council meeting on Tuesday, Nov. 19, 2024.Gerardo Zavala/CapRadio

Very few community members showed up to speak against the proposals, but one Sacramentan expressed concern over how the city handled the demise of Rio City Cafe, a restaurant that had operated on the docks of Old Sacramento for over 30 years. Now that the restaurant has closed, the city is planning to hire a consultant to find the best tenant to fill the space.

“Why is the city spending money on a consultant, as well as spending money for improvements to the Rio City Cafe site after essentially forcing the owners from the site?” Bill Motmans asked council members in a written public comment. “Rather than spending money on a campaign to attract a different vendor, the city should seek to bring back the Rio Cafe [in] all its splendor, as well as providing, belatedly, the upgrades they were required to complete.”

The approvals come exactly a week after City Council members also unanimously approved the construction of a new Sacramento Republic FC soccer stadium in the Railyards. 

Sacramento City Council unanimously approves Railyards soccer stadium plan

Old Sacramento revitalization proposal

The first of the trilogy of proposals approved Tuesday tackled refurbishing Old Sacramento. A city report identified six improvement projects that would transform the historic district into a “vibrant entertainment district.” 

• Development of public market buildings: Two buildings in the historic district will be rebuilt or reimagined as “a unique, Sacramento-sourced shopping experience.” One market will have art and specialty goods, and the other will serve food and beverages. This project is still being developed, and city officials did not give a timeline for when it will be complete. 
• Boardwalk replacements: Old Sacramento has roughly a mile of wooden boardwalks that have not been repaired (outside of emergencies) since 2005. This project is expected to begin immediately and wrap up in October 2025. 
• K Street Barge hull repairs: The K Street Barge provides ADA access to the lower portion of the docks in Old Sacramento with its elevator. The barge’s hull has deteriorated, city officials say, and argued “allowing the barge to continue deteriorating would also impact the Delta King’s ability to operate.” This project is expected to begin in May 2026 and be completed by October of the same year.
• River dock maintenance: City officials said the Old Sacramento dock system requires “deferred maintenance to ensure continued safe public access to the docks and waterfront.” This project is also expected to begin immediately and be completed by June 2032.
• Redeveloping restaurants along the waterfront: A large restaurant building in Old Sacramento has sat empty since Rio City Cafe closed in August. “Given the site’s prime waterfront location and the City’s goal for quick activation, staff has engaged a consultant to attract the highest and best user for the site,” city staff wrote, and added that they are considering repairing the building to attract a new tenant. This project is expected to begin in May 2025 and be completed by October 2025. 
• Building a new kids play area: In partnership with the Shingle Springs Band of Miwok Indians and Wilton Rancheria, the city has designed a play area inspired by the Native people who’ve lived on this land for decades, complete with a “riparian corridor” theme. This project is expected to begin in June 2025 and be completed in December of the same year.

City staff said the public market project, boardwalk replacements, K Street Barge hull repairs and redeveloping restaurants on the waterfront is expected to cost $25 million in total, and will be funded by the city’s Transient Occupancy Tax.

“The projects we’re bringing forward fit very well into [how TOT is supposed to be used,] focusing on the local economy and tourism and economic development,” said Leslie Fritzsche, Economic Investment Manager at the city. “Each of the projects will amplify and grow Sacramento’s tourism industry, and further diversify our local economy.”

The river dock maintenance project will be funded through a $1.6 million grant from the US Department of Housing and Urban Development and $4.6 million from the state. The kids play area will be funded through a $1 million grant from the California Natural Resources Agency.

‘City of Festivals’ proposal

The second of the three approved proposals focused on drawing tourism to Sacramento through “iconic” events like festivals. The city will give Visit Sacramento, the tourism bureau, a one-time payment of $2 million “to sustain its efforts to support iconic events production” in the next fiscal year, a city report reads. 

“It’s clear that over the years Sacramento has established itself as the ‘City of Festivals,’ drawing attention as a tourism destination through events such as the Farm to Fork Festival, Aftershock, Golden Sky, Sol Blume and more,” said Megan Van Voorhis, Director of Convention & Cultural Services at the city. 

Van Voorhis added that these festivals have generated substantial economic benefits to the city. The 2024 iterations of festivals Aftershock and Golden Sky — both held at Discovery Park on consecutive weekends in October — contributed an estimated $44.6 million to the economy, she said.

Not everyone who attends these festivals are Sacramentans. Many attendees come from the Bay Area, Los Angeles and even other states and countries. Those far-flung attendees end up booking hotels or other short-term rentals here in the City of Trees, therefore boosting revenue gathered from the Transient Occupancy Tax. 

“Again, I just would like to draw that this is data from only two of the iconic music festivals that have called Sacramento home,” Van Voorhis said. “The richness of Sacramento’s festival scene reflects the city’s diverse cultural landscape and serves as a home for cultural expression and cross-cultural understanding.”

Funding for the one-time $2 million payment will come from the city’s Community Center Fund, which is supported by the Transient Occupancy Tax.

New hotel proposal

The final approved proposal outlines a plan to build a new 350-room Hilton hotel connected to the SAFE Credit Union Convention Center on J and 15th streets. 

The convention center recently underwent a $245 million expansion project, which began in 2018 and was completed in 2021. The project gave the convention center the ability to host bigger conferences and events, but city staff wrote the expansion “generated the need for additional hotel rooms to fully utilize the additional capacity of the center” in the proposal to build the new hotel. 

Fritzsche, the city’s Economic Investment Manager, said Visit Sacramento reports that challenges with hotel inventory is cited 34% of the time as the reason it loses convention business. That equates to almost half a million hotel nights along with related visitor spending in losses. 

“It’s not conventions alone that we miss,” Fritzsche said. “We miss the ability to attract events such as the NBA All-Star Game, or something I’m particularly fond of, Women’s NCAA basketball playoffs and special meetings and seminars.”

She added that the city has the opportunity to change that situation and attract those iconic events and activities by building the new hotel.

Altogether, hotel construction is expected to cost $241 million. Hilton Worldwide Holdings Inc. has agreed to contribute $4.5 million for the project, and the rest of the funding could come from the city’s Transient Occupancy Tax. However, the Council must create a formal agreement before that could take place. 

The city report also projects that the hotel would generate between 200 and 225 construction jobs and another 200 hotel operations jobs once construction is complete. The hotel is also projected to generate $680,000 in sales taxes annually, the report says, in addition to $1.9 million in property tax revenue. It would also boost the city’s TOT fund, but city officials did not provide an estimate of how much.

It’s also unclear when construction of the hotel will take place. The city report says the development team is in “initial stages of the project” and requested “an indication of support from the city” before they make solid plans.

Gerardo Zavala contributed to this report.