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Sacramento’s city council advanced a proposed special taxing district for the former Sleep Train Arena site in North Natomas, Tuesday evening, which would reimburse developers for infrastructure work for a proposed medical school and housing complex.
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The Sacramento Kings played their last game at the arena in 2016, and the building was demolished in 2022. That year, California Northstate University announced plans to build a 13-story, 400-bed teaching hospital there, and in 2024 a Costa Mesa developer acquired another large portion of the property to build housing. Natomas Unified School District owns a smaller parcel, where it plans to build a school.
But the property hasn’t seen major construction in the intervening years. These days, the parking lot is known among locals as the site of the monthly Sacramento Antique Faire.
Officials have argued that the site should be occupied by a major player that would bring jobs and economic vitality to the area. Councilmember Lisa Kaplan, whose district includes the arena property, has described the city’s commitment as the “Natomas Promise,” a contract with residents that the former arena site would become a source of jobs and investment.
“Yeah, you can come out to the Antique Faire once a month on Sundays,” Kaplan said. “But we need more of an economic driver.”
‘A long process ahead’
In a memo to constituents Friday, Kaplan urged residents to support the taxing district, and assured that the funding is contingent upon “real, verifiable progress.”
“If private stakeholders stall, bicker, or try to rewrite the rules to favor themselves, the public risk remains entirely safeguarded,” she wrote.
Mayor Kevin McCarty called the agreement a “good deal for the taxpayers.” Weeks earlier, he said, the council was slashing positions and programs to fill a budget deficit. The Natomas project, in contrast, marked “an opportunity to grow.”
Still, he stressed that the project must be worthy of the property tax dollars promised by the special taxing district.
“It’s your taxpayer dollars,” McCarty said during the meeting. “We need to be very, very wise and make sure we get our bang for our buck.”
If the taxing district is approved and the hospital doesn’t materialize, the revenues would remain in a fund, and the city committee overseeing the taxing district would determine how to direct them, Leslie Fritzsche, Sacramento’s economic investment manager, told the council.
The public will have opportunities to weigh in again in the coming months. City staff estimated the district — an enhanced infrastructure financing district, or EIFD — may be formed by early 2027.
“There is a long process ahead,” Fritzsche said.
The council members exited the chambers for 40 minutes, during public discussion of the item, after outbursts from attendees. When they reconvened, the council approved the item unanimously.
Construction unions call for ‘good, local work’
Argent Development — a Costa Mesa-based developer of master-planned communities — said it acquired the 183-acre arena property in the summer of 2024.
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A 42-acre parcel on the southwest edge of the site is now owned by the university, and a 12-acre parcel to the east is owned by Natomas Unified School District, according to county records.
The Natomas Unified school board recently approved a general obligation bond for November’s ballot, Deidra Powell, executive director of communications and family engagement for Natomas Unified, said in an email. The arena site is among the projects that fall under the general obligation.
The 130-acre balance of the property is owned by an LLC affiliated with 400 Capital Management, per county property and state business records. That firm is Argent’s financial partner in the project, said David Soyka, the company’s vice president of public affairs.
Argent plans to build 1,200 to 1,500 units on the site, envisioned as a walkable, bikeable community where hospital employees could eventually travel on foot between work and home, Soyka said. It would have an urban plaza in the center of the property with a hotel and retail, attached to a park.
“It’s really a centrally located property in the Sacramento area,” Soyka said. “We think we’re going to be very successful.”
Argent is subgrading the site, and is seeking approvals for its housing plans. Argent will complete the major infrastructure work for its portion of the property, and for the university, Soyka said. The school district’s parcel is not included in the proposed taxing district.
California Northstate University in 2022 said it expected to begin construction by the end of that year. Last summer, university officials said they expected to break ground in spring of 2026.
University President Alvin Cheung told the council that the teaching hospital “will soon become a reality.” Cheung declined to provide an interview Tuesday evening, and the university did not directly address questions about its expected timeline for the project.
In a statement Wednesday morning, Cheung said the university is “fully committed” to building the medical campus, though he had “no specific updates to announce at this time.”
Cheung told the council that the university is collaborating with the Kings. The team’s senior vice president and general counsel, Jeff Dorso, spoke during the public comment and urged the council to omit language that would make the funding contingent upon vertical construction.
The council passed the agreement without that language. The Kings lauded the council vote in a statement.
Representatives from building trade unions lent their support to the deal. John Rector, district representative for Operating Engineers Local 3, told the council that the site has been vacant for too long, as other development projects have stalled.
“We have a lot of local members that are looking for good, local work,” Rector said. “The economy is slowing. Interest rates are high. Gas is high, it’s affecting the cost of construction. Developers aren’t putting a lot of money into our community right now, and this project is crucial.”
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