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Downtown Partnership's Michael Ault weighs in on how downtown businesses will benefit from new arena

Michael Ault, executive director of the Downtown Sacramento Partnership, was kind enough to answer some questions about the type of impact a new downtown arena would have on local business. Ault's organization has been a key voice for the business community in the fight to keep the Kings in Sacramento.

The effort to keep the Kings and build a new arena in downtown Sacramento has and continues to be a united front that includes numerous people and organizations.

One of those entities is the Downtown Sacramento Partnership, a private, non-profit organization dedicated to the improvement of the central Sacramento business district. The organization represents 176 property owners and more than 400 retail businesses located within the 66-block district of downtown.

The Downtown Partnership has helped mobilize the local business community to push for the approval and completion of a downtown arena and remains active in the process as the city now enters the next phase of environmental review.

I recently caught up with Michael Ault, executive director of the Downtown Partnership, to get his thoughts on what this project would mean for downtown businesses and the future of Sacramento.

BE: The arena process has taken a lot of twists and turns over the years and I know the Downtown Partnership has been a strong advocate for putting the facility downtown for a long time. It's not done yet, but how exciting was it for you and your organization earlier this year when the City Council approved a term sheet with the new owners of the Sacramento Kings and the team ended up staying?

MA: We were thrilled. Our organization has advocated for this project in the downtown core for over a decade, so to see it move forward, especially after being so close to losing the team and the prospect of a downtown Entertainment and Sports Complex earlier this year, was just tremendous.

BE: When you hear from property owners around downtown, what are the main things they are excited about in terms of the potential of a new Entertainment and Sports Complex?

MA: Many downtown businesses, believe the ESC will be a positive asset to their business. The events will attract high volumes of visitors, and a good design will encourage pedestrian activity, which together will result in more business. The influx of excitement about the arena and the subsequent investment in the area will lead to a very dynamic retail and entertainment mix that will complement and enhance our existing assets.

From a development standpoint, it's all about absorption. An activity generator like an arena will have a positive effect on growing our residential and commercial markets. It will help shorten the absorption time it takes to fill retail and residential space and make other projects more financially feasible.

Ultimately, it will help the Sacramento region continue to position itself as an area to attract young professionals with both affordability and an exciting urban scene, which is very important to businesses looking to recruit and retain talent.

BE: I know the Downtown Partnership has recently made an effort to try to spruce up the 7th-9th blocks of K Street. How will the Entertainment and Sports Complex help that effort?

MA: There's no question it will pave the way for more opportunities for private capital to be injected into those blocks. The 700 block of "The Kay" has had plans for development for several years now, but has yet to break ground due to complications with the dissolution of redevelopment. The area in general is now much more attractive to private investors and the financial lending community.

BE: Are there out-of-town business owners right you know of who are considering opening up shop in downtown Sacramento because of the potential of the Entertainment and Sports Complex?

MA: We have absolutely seen outside interest in businesses wanting to lease retail and commercial space in downtown. Businesses are asking about the plans and time line of the Entertainment and Sports Complex and looking for vacant space nearby to lease. They want to take advantage of opportunities before the arena is built and see the long-term potential of what it will bring to the area.

BE: It is projected that the Entertainment and Sports Complex will bring in millions of new visitors to downtown Sacramento. What will that mean to the current downtown business owners and potential business owners?

MA: It's huge. It means everything. The increase in visitors, excitement, and attention will mean that small business owners can feel confident in expanding their hours and services and will be able to leverage foot traffic into increased revenue. It will give every business owner down here a chance to really show what value they can provide to visitors, whether that is someone attending an event at the ESC, or someone staying in a hotel nearby to attend a conference.

High-density urban projects like the ESC create critical mass and increase foot traffic. These qualities are attractive to large retailers. Right now, national retailers are passing up the Sacramento Region (not just downtown) for larger markets because we lack the density they require.

BE: Some downtown business owners I have talked to say they would like to see more locals coming through their doors, not just folks going in and out of the Capitol and people staying at the hotels. Talk about how the draw of the Entertainment and Sports could get more people who live in the region downtown and in the doors of businesses.

MA: An Entertainment and Sports Complex would add to the regional draw in the downtown core. Folks in the outlying areas who don't work downtown often need a specific reason to visit the urban center and see all of the momentum and positive changes we've seen over the last several years. An ESC would give a much broader local audience additional reasons to visit their city's center, and explore the other amenities we have as well.

BE: Sleep Train Arena is surrounded by a parking lot, which forces current arena goers into their cars when they leave an event. What could having a central hub like the Entertainment and Sports Complex do for the synergy of the downtown core?

MA: That is the beauty of an urban facility. With a daytime office population of over 100,000 people, downtown is already set up for both its infrastructure and businesses to serve a large population. The ESC will attract a large population of event goers at the times when office workers typically head home, keeping downtown energized beyond the usual workweek. Downtown will be able to easily accommodate the evening crowd, just as it does the hundreds of thousands of employees daily.

BE: How does having a new arena and the Kings downtown help advertise the city?

MA: Well, for one, it gives our downtown national television coverage all basketball season long, whether it's broadcasting the games or recapping the highlights on ESPN or other news outlets, having a professional sports franchise helps keep your city involved in the national consciousness. Add to that a stunning skyline after each commercial break, and it can become an extremely effective tool for keeping Sacramento familiar and top of mind.

Regionally, it goes even further. It reminds those in the greater metropolitan area and beyond that Sacramento is a fun and exciting place with big name concerts, national sporting events and family-friendly entertainment. We'd like to see our hard-earned entertainment dollars spent in our own city, rather than using our incomes to supplement the tax base in the Bay Area, Tahoe or Reno. Essentially, it's just like how we encourage shoppers to "buy local." Sacramento residents will be regularly reminded to "buy local" when spending money on entertainment.

BE: With the development of the Intermodal facility around the corner from the Downtown Plaza, how can this project help boost connectivity in the core of downtown in terms of transportation?

MA: We hope it will give visitors and residents alike a way to get to and from downtown easily and seamlessly without a car. This would mean less congestion, less gas purchased, less time spent and more environmentally friendly options for travel

The proximity of the ESC to the Intermodal facility will add transportation options to an already transit-rich experience downtown. Connections from regional transit, Capital Corridor and Amtrak service will reduce dependency on the automobile and allow ESC attendees to enjoy retail, dining and entertainment options before and after events at the facility. Additionally, existing transit infrastructure options adjacent to the proposed ESC site will ensure a drastically different experience from the one at the current facility. Not only will this reduce traffic congestion and air pollution, but the ability to choose from various modes of transportation will encourage event goers to come early and stay late, thus increasing economic activity and vibrancy in the core.

BE: When you think about the potential for downtown Sacramento, what other cities around the country that have built downtown arenas would you compare it to?

MA: After the ESC is developed, all but two NBA facilities will be located in primarily urban areas (and one, where theGolden State Warriors play, is proposed to move into San Francisco). Indianapolis and Washington D.C. are prime examples of the catalytic benefits associated with downtown arenas, and Brooklyn, while not necessarily to Sacramento's scale, is part of a $5 billion development project that includes significant residential, retail and commercial projects. The Staples Center in Los Angeles transformed a formerly rough area in downtown that has seen the development of numerous residential towers, premiere arts and cultural facilities and luxury hotels.

BE: With any major local development project, you are going to get opposition. How do you respond to some of the arguments against this project from those who say the city should focus on other things rather than investing in an arena?

MA: The city is investing in the future economic success of the Sacramento region. By investing in the arena, we will continue to generate increased tax revenue for our general fund. Not just through sales tax directly connected with the events, but also through tax revenue connected to hotel stays, dining, entertainment and other commerce.

This is a chance to invest in our city's future by retaining and creating jobs, generating more revenue for the general fund, protecting funding for public safety and education, creating new convention and tourism opportunities, all while giving our city a state-of-the-art entertainment and sports amenity.

Additionally, this deal leverages an estimated $1 billion in additional development not including the actual ESC. When you include the private investment into the Entertainment and Sports Complex, it totals well over $1 billion in private capital investment into downtown Sacramento. That is roughly $4 private capital for every $1 invested by the city. With no more redevelopment dollars available, there will be very few large-scale catalysts that draw private investment in our economy, and we need to make sure we capitalize on this one.

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