Over the past several years, nothing has evoked more controversy in Sacramento than whether the city should do what it takes to keep the Sacramento Kings in town or let them go. The issue is whether the city of Sacramento should provide substantial funding for a new Sacramento Kings arena, without which the Sacramento Kings would move. Very adamant people came down on both sides of the issue. Articles on the topic resulted in tens of thousands of comments from readers of Sacramento area news publications. Whether or not it is a good for the Sacramento or not I believe a downtown arena is now quite likely. With that said, how will a downtown arena effect the Downtown Sacramento real estate market?
I have looked into the effects downtown arenas have had on other cities, but I think the most relevant case is Arco Arena. Arco Arena was not built in a downtown area, but it was built in Sacramento and this case study shows us a great deal about how Sacramento residents will respond to a new arena. Do the people of Sacramento want to live near an arena? I say YES. Let’s take a moment to look at the facts. Arco Arena was built in the agriculturally dominated area of Natomas. During the life of the Arena (by the way it is not dead yet) Notomas has become one of the most heavily developed residential areas in the region. Despite having extremely rapid development during the housing bubble and a fairly high rate of foreclosures after the housing bubble burst, Natomas maintained its market value and desirability better than many areas of Sacramento. Furthermore businesses have seized the opportunity to develop near the arena. Prior to Arco Arena, Notomas did not have much more than a few gas stations and a handful of fast food restaurants. Because of Arco Arena, Natomas has one of the nicest shopping, dining and entertainment experiences in the Sacramento area.
Downtown Sacramento is not Natomas. I am not saying that a downtown arena will bring on the wild development of previous undeveloped land. Surely there is not much bare land to develop in the downtown area. Based on what Arco Arena did for the Natomas area however, it is easy to see that a new Downtown Sacramento arena will not only stimulate urban redevelopment of downtown sacramento and nearby areas, but also drive up the value of downtown homes and apartments.
What do you think? We would love to read your opinions on how a new Kings arena in Downtown Sacramento would effect home values in the Downtown area.