Rancho Cordova approves incentives up to $185M for new downtown and arena project

The Abridged version:

• Plans for a new 7,500-seat arena and city center project received a final sign-off from the Rancho Cordova City Council.
• The council voted 4-1 in favor a new financial agreement that includes $185 million in fee waivers and tax revenue sharing.
• The bulk of the financial incentives would only kick in after the project is built.

---

A new arena and city center project planned for Rancho Cordova cleared the last of its major hurdles Monday night.

The Rancho Cordova City Council voted 4-1 in favor of up to $185 million in public funding for the “Downtown Dova” project, under a new financial agreement between the city and developers. A pair of local developers, Joshua Wood and Charanjeet Tiwana-Purewal and their company KozPure Development are behind the project.

At full build out, Downtown Dova would include a sports arena, a public plaza, new retail and dining options, two hotels and up to 1,000 housing units. The project is planned for 28-acres of vacant land near Kilgore Road and Trade Center Drive.

At the heart of the plans is a 7,500-seat arena that would host men’s and women’s professional indoor soccer teams. City leaders also say the site could host concerts, trade shows, graduations and festivals.

Mayor Garrett Gatewood called the proposal a “blessing.”

“For all our kids and for the next three generations, we have now built something that will be the biggest development that Rancho Cordova has ever seen,” Gatewood said.

The project is also envisioned as a way to create a central downtown in Rancho Cordova. While the city has shopping centers that create pockets of activity, the city does not currently have a central hub that acts as its downtown.

Construction on Downtown Dova could begin within 90 days, pending weather conditions, Wood said.

Councilmember Joe Little, the sole dissenting vote on the dais, declined to detail his vote. He told his colleagues that he didn’t want to “re-litigate” the conversation from last week.

The council also voted 4-1 last Monday on a string of key votes for the project, including environmental reviews and an agreement to sell city-owned land to the developers.

What’s included in the $185 million incentives?

The city’s end of the deal “will not exceed” $185 million, according to the financial agreement. Most of the subsidies would only kick in if the project is built and brings in revenue.

Before construction begins, Rancho Cordova could cover up to $3.7 million in fee waivers for building permits. After construction, city leaders agreed to cover $13.5 million in development impact fees.

While the city is not directly paying the developer or issuing bonds, the money would eventually be drawn from the city’s general fund through a series of internal transfers.

As more of the project gets built out, more public funds could be cycled into the project. The city agreed to cover $15 million for police and fire services to the new city center at certain construction benchmarks.

The agreement also includes about $152.8 million in tax revenue sharing, where the city would “share” a portion of the new sales taxes and hotel taxes generated from the site back into the Downtown Dova project.

The tax sharing agreement includes:

• 100% of new transient occupancy taxes from new hotels.
• 100% of card room taxes, from a card room planned on the site.
• A 50-50 split between the city and the developers for a 1% Bradley Burns sales tax on the site.

City staffers emphasized that the agreement includes a list of “protections” for the city as well. For example, if the project is abandoned and never completed, the developer would be required to pay back its city fees.

When all is said and done, the city is “conservatively” estimating that it serves to gain $79.4 million in new revenue from the project, according to a staff report.