How is the Golden 1 Center Affecting Nearby Sacramento Businesses?

Since March of 2012, when the Sacramento City Council okayed a deal that would keep the Sacramento Kings in Sacramento by providing $391 million in financing for a new sports complex, it has been one of the hottest topics in the Northern California business community. Finally, in early October of 2016, after years of anticipation—and a certain amount of grumbling from certain quarters—the $558 million Golden 1 Center hosted its first ever event, a Paul McCartney concert.

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During the long financing negotiations and equally long construction process, the Golden 1 Center had been sold as being the crown jewel of what would become a revitalized Downtown Sacramento business district. Predictably, investors have scrambled to launch businesses in the area surrounding the Golden 1 Center in the hopes of attracting the attention of Kings fans, concertgoers, and event attendees.

Recently, I decided to take a look at the challenges that Downtown Sacramento businesses are currently facing. This blog post is a summary of what I found.

Note that this isn’t an analysis of past, present, and future investments in the development of the Downtown business district, nor an attempt at diagnosing potential solutions for existing problems. Downtown is in flux. My goal was simply to answer this question:

Five months after Golden 1 opened its doors, what is the current reality for the businesses surrounding the Center, and what changes have businesses experienced since the arena opened?

Construction on the Golden 1 Center may be done, but the rest of Downtown could use a little work.

On a recent Thursday afternoon, I took a trip through Downtown Sacramento. My natural starting point was the new epicenter of our Downtown: the Golden 1 Center itself.

Front view of Golden 1 Center

It certainly makes quite an impression, almost seeming to erupt out of nowhere. But the fact that it seems to be a little out of place highlights what might be the first challenge for those looking to leverage the arena in the creation of their own would-be business success stories: The area immediately surrounding Golden 1 looks a little… rough.

For starters, the hotel and condominium complex is still undergoing construction. The occasional construction worker could be seen wandering through the plaza, and the squeal and grind of equipment drowned out the more organic murmur of bird chirps and dripping water emitting from speakers hidden throughout the area. As a consequence, the sight lines around the Center are marred by inescapable evidence of construction.

 

Construction work around Golden 1

Fencing, neon orange road cones, and construction debris litter the surrounding area, making it clear that the area is still very much a work in progress.

Road cones and fencing around Golden 1 Center.

Photographers looking to emphasize the aesthetics of Golden 1 certainly have to work for it, as even the slightest drift in aim allows the realities of the area’s growing pains to become painfully evident.

Unattractive sight lines around Golden 1 Center.

As you look at these photos, another issue currently facing businesses in the area becomes obvious: Right now, it’s not a particularly busy area during off-peak hours. In fact, it felt downright abandoned, save for the occasional hard hat wearing pedestrian and grungy looking loiterer. I visited Downtown just after the lunch hour when nearby state workers emigrate to the many small cafes and restaurants in the area, and then vanish again. When state workers are in their offices, the number of people wandering the city sidewalks drops to near zero.

And part of the problem is that much of the area surrounding Golden 1 is in pretty rough shape, and isn’t particularly inviting to would-be visitors. It’s hard to walk a block without seeing a ‘for rent sign’ in a dismal-looking storefront, having to skirt around a construction fence, or confronting a flurry of mixed emotions as you pass one of the city’s many homeless residents.

Poor conditions around Golden 1 Center

Less than two blocks away from the sparkling half-billion dollar entertainment complex, I passed an abandoned storefront with trash piled in front of it, with a tent erected in the adjacent–and also abandoned–storefront.

Over the past few years, I’ve visited a number of countries that might give tourists pause, such as Montenegro, Bosnia, and Turkey. And to be quite honest, walking around Downtown Sacramento during its quiet daytime hours gave me more pause than the streets of Sarajevo and Istanbul did. It’s an uncomfortable truth, but it is what it is.

But despite the area’s current unfinished state, the Golden 1 Center is finished, and many businesses depend on how well the area does right now. So, what’s the current prognosis according to nearby businesses?

Even in the shadow of the Golden 1 Center, restaurants and other businesses have to work for their money.

Unsurprisingly, businesses immediately next to Golden 1 are benefiting nicely from the traffic being drawn in by Kings games and concerts. Sauced, a barbecue joint occupying a prime bit of real estate immediately adjacent to the arena, is getting a great deal of pre- and post-event traffic. A hostess working there described game nights as “crazy,” and mentioned that staff have actually had a bit of a challenge keeping particularly large and raucous crowds under control. However, foot traffic in the restaurant is noticeably slower on non-event nights, apparently dropping to perhaps half of what the restaurant sees on event nights. But the restaurant appears to be making a name for itself, and is benefiting nicely from press coverage and marketing efforts.

While Sauced had a decent number of customers even during the sleepy daytime hours during which I visited, the other nearby restaurants that I visited weren’t nearly as fortunate. Things were quiet at WHIRED Wine, a wine bar that opened about six months before the Golden 1 Center did. A server there said that the arena has helped them to build upon the regular customer base they had grown before the opening of the arena, but they have to schedule events and specials around game days in order to keep business up during non-event evenings.

It was particularly quiet at The Pier, a restaurant on 4th and J with a nightclub on the second floor that operates on weekend evenings. Josh, the server that I spoke to there, probably gave me the best insight into what the current business scene looks like. As he summed it up, “Business is excellent on game nights, but off-days can be very slow.”

He noted that one of the particular challenges currently facing businesses like The Pier which have opened up over the past year is that The Pier and its competitors are rather scattered. Josh has worked at a number of restaurants in the past, and explained that while it might seem that a restaurant wouldn’t want competitors nearby, in fact they do best when there are a number in one spot, as you need that sort of density in order to generate spontaneous foot traffic. The area around Golden 1 hasn’t yet achieved the critical mass of enticing businesses that are necessary to create a self-sustaining ‘scene’ in which people will visit without having a clear destination in mind, and hop from one business to the next, buying drinks in one business, an appetizer in the next, and so on.

Thankfully, The Pier has the benefit of having its own nightclub which generates a great deal of business Thursday through Saturday, even when there aren’t events in the area. However, the restaurant is investing in marketing in order to drive business during slow weekday hours.

However, there’s another issue currently plaguing businesses in the area.

The parking situation in Downtown Sacramento is, in a word, terrible.

As anyone who spends time downtown, finding a parking spot can be a challenge. And recent rate hikes and changes to parking rules have only worsen the problem. Literally every business I spoke to complained about the difficulty for customers to find parking. Josh at The Pier mentioned an additional wrinkle that I hadn’t previously been aware of: Some nearby metered parking spots become drop off-only during evening hours.

I almost didn’t believe him until I did some exploring and came across an entire block of parking meters with signs warning drivers that their cars would be towed between the hours of 5:30 PM and midnight.

'No parking' zones around Golden 1 Center.

The parking problem has become so severe that The Pier is working on introducing a valet service, and is in the process of negotiating with nearby garages and private lots.

As it turns out, the serious parking shortage has been driving some downtown patrons to take advantage of the few businesses with private lots. A customer service representative at the nearby Macy’s–the only survivor of the old Downtown Plaza mall that once stood near where Golden 1 is now–mentioned that they suspect that some visitors are parking in the store’s underground garage and abusing Macy’s validation policy in order to get free parking. It seems likely that this is happening elsewhere, and that if the issue continues, that towing companies will soon be seeing an uptick in business.

But, moving on from the challenges of parking, there are other sources of concern…

Many businesses near the Golden 1 Center are still struggling, and even seeing a downturn in business.

It’s easy to see how businesses such as restaurants, bars, and nightclubs can form a symbiotic relationship with the new arena. But what about businesses that aren’t such natural complements to the arena scene? The representative I spoke to at Macy’s said that on event nights, foot traffic takes a considerable downturn. The likely explanation is that would-be customers simply don’t want to deal with the traffic and congestion that arises during game days.

I was curious to see whether businesses farther afield are seeing any difference in business, so I ventured a ways down the J Street corridor to the popular eatery and bar LowBrau, located in the MARRS building that stands about a dozen blocks from Golden 1. I thought that maybe some arena visitors were choosing to travel away from Golden 1 for their post-game libations in order to avoid the crowds. As it turns out, Kings fans apparently aren’t sausage and beer fans. As a server at LowBrau told me, “I couldn’t tell you when there’s a game and when there’s not.” However, he did allow that they do seem to see a bit of an increase in business after concerts, and recalled that immediately after the end of the notorious Kanye West concert, they were overwhelmed with a deluge of customers. But for the most part, LowBrau isn’t seeing much of a difference.

A few doors down at Pizzeria Urbano (full disclosure: I can occasionally be found there during my lunch hour), they aren’t seeing even a modest improvement. As a server told me, “Actually, it’s worse [on game] nights.” At the nearby Starbucks, there’s no difference to speak of. However, the traffic stoppages put into effect on L Street outside of Golden 1 after games and events so that attendees can more easily leave have forced customers and employees to take more circuitous routes in order to leave the area.

So, things in Downtown are a mixed bag. But as it turns out, businesses on the Midtown side of the arena are doing far better than their Old Sacramento counterparts.

Old Sacramento: ‘We’re withering on the vine down here.’

I closed out my day by visiting Old Sacramento, the historic district on the banks of the Sacramento River. Given that the arena is only a five minute walk from Old Town, I thought that businesses there might be enjoying a renaissance. Instead, what I found was frustration, bitterness, and anger. I won’t name any of the businesses that I visited in Old Sacramento, both out of respect for their privacy and because of specific requests to remain anonymous.

As one particularly frustrated business owner put it, “We’re withering on the vine down here.” That owner, who took over the business a couple of years ago, detailed how the building owner had claimed that when the arena opened, that the business would be overwhelmed with business, and that they would have to hire extra employees to help keep an eye on the innumerable visitors that would wander through their doors.

That was not the case. Instead, most if not all of the businesses in the area are apparently seeing a dip in business. There was a sense among newer business owners of having been sold a bill of goods. Instead of the arena bringing in revenue, it appears to be sucking it out of Old Town, with owners claiming that the city is pulling funding out of the district in favor of Downtown. Some businesses reported seeing some gains on event nights, but not enough to stop the bleeding.

The future of Downtown Sacramento is still not clear.

It’s only been a six months since the Golden 1 Center opened, and as Josh at The Pier put it, “We’re still waiting for the dust to settle.” It’s not clear how the complex ecosystem of the Downtown business scene will stabilize once the construction crews have left and more businesses have moved in. But based upon my explorations, it’s safe to say that while Golden 1 might be the crown jewel of Sacramento, the crown itself desperately needs a polish.

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