Bicyclists check out construction progress on the new arena at 7th and K Streets. The new arena, the Golden 1 Center, is expected to open in fall 2016. Ed Andersen Ed Andersen
Bicyclists check out construction progress on the new arena at 7th and K Streets. The new arena, the Golden 1 Center, is expected to open in fall 2016. Ed Andersen Ed Andersen

Marcos Bretón

Connecting the dots on issues, people and news in the Sacramento region

Marcos Bretón

Marcos Breton: Sacramento can’t stop talking business

By Marcos Breton

mbreton@sacbee.com

January 25, 2016 04:01 PM

Even though some of his foes despise him and always will, Mayor Kevin Johnson has been good for the business of Sacramento.

His term ends this year and new candidates are vying to replace him, yet Johnson is likely to announce new investment for Sacramento at his State of the City address on Thursday. In past years, Johnson has used his glitzy annual showcase to trumpet civic victories such as the Golden 1 Center, the rescue of the Kings and the revival of downtown.

Johnson has been able to get local CEOs to engage in the political process as never before and to fund a new organization built solely to promote Sacramento as a place to invest. That organization, the Greater Sacramento Area Economic Council, is trying to position the city as the gateway to Silicon Valley and a hub for medical and agricultural innovation.

It’s all critical groundwork that Johnson has laid over the past seven years in an effort to move Sacramento beyond its image as a government town. His energy and telegenic persona have helped to create interest and optimism around the issue. But that work is fragile and could collapse once Johnson leaves office. The local economy, while improving, is still soft and propped up by low-paying jobs.

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In its annual economic forecast, released earlier this month, the Sacramento Business Review found that while Sacramento reached a full jobs recovery late last year, most of those jobs were low-paying and in the retail, leisure or hospitality sectors. Unemployment, while under 6 percent, remains higher than in other large communities on the West Coast, according to the report. The state capital continues to be a tough place for small businesses.

Meanwhile, even Johnson’s successes are tempered by Sacramento’s limitations. Johnson has pushed for a revival of the urban core, and more people are moving to downtown and midtown. But more people in the urban core mean more traffic there every day. How to alleviate that?

It’s as if Sacramento suddenly discovered it needed a good public transit system to move people around, only to find the one it has is truly awful.

A harbinger of a potential danger to Sacramento’s economy surfaced at this week’s Regional Transit meeting. The local system of buses and light rail is dirty and inefficient. RT is running in the red. It doesn’t take passengers to critical destinations such as Sacramento International Airport.

Advocates for the poor and disabled have been vocal in voicing their concerns about potential rate hikes. Lost in the discussion is that most RT riders pay less than half the regular fare because the system has granted so many discounts over the years, according to agency officials. RT’s fare-box collection is around 21 percent, much lower than other cities such as Portland.

When the community succeeds, everyone does better. When it doesn’t succeed, it’s always the people at the bottom who pay. When we compete, we take care of more people that way.

Barry Broome, CEO of the Greater Sacramento Area Economic Council

RT has depleted reserves and a terrible public-relations problem. Many people who could pay full fare don’t want to take RT because of its current condition. But needed discussions about raising revenues and improving services keep falling out of focus. Unless new revenue sources are found, services are going to worsen, and a transit system that poorly serves its residents keeps a city at a competitive disadvantage.

Part of what attracts business is infrastructure. What’s needed to keep downtown Sacramento from turning into a logjam of cars this fall, when Golden 1 Center opens, is a system that moves everyone around easily and efficiently.

RT needs help. Streetcars that might have been part of the solution were voted down last year by shortsighted city residents. Still, the conversation can’t just be about transportation. It also has to be about business development. It has been under Johnson, but it can’t end when his term does.

According to city projections, Sacramento’s general fund is likely to start running a deficit next year that is expected to grow to $13 million in two years. Taxing citizens can’t always be the fallback to such deficits. Everybody wants something: A new performing arts center, more cops, more fire stations, more parks. Increasing Sacramento’s tax base as a way to pay for these things is the conversation that Johnson started.

Local business leaders are trying to keep it going. Kings owner Mark Friedman, rancher and lawyer Stan Van Vleck, developer Kipp Blewett and others have drafted a strategic plan they hope Sacramento’s next mayor will adopt. “It’s about keeping the momentum going,” Friedman said.

It calls for Sacramento’s new mayor to lead a workforce initiative to bring higher-end jobs to Sacramento. It calls for businesses to partner with Sacramento State, UC Davis and Los Rios Community Colleges in an effort to better prepare and educate Sacramento’s workforce. Key to this is keeping the best and brightest from Sacramento’s universities from leaving town for jobs in Silicon Valley – a trend that must be reversed.

“When the community succeeds, everyone does better. When it doesn’t succeed, it’s always the people at the bottom who pay,” said Barry Broome, CEO of the Greater Sacramento Area Economic Council. “When we compete, we take care of more people that way.”

“We’re all concerned with what our community is going to look like,” Friedman said.

The concern is real. Sacramento has a chance to change and grow for the better – or blow it and remain a town of political and automotive gridlock.