Sacramento’s old ARCO Arena site is finally getting a new shot at becoming something more than a giant empty promise. The City Council took a step Tuesday toward financing Innovation Park, the long-delayed North Natomas redevelopment planned for the former Kings arena property. The move opens a path for infrastructure work, though it does not mean construction is starting tomorrow.
As ABC10 reported, the council’s action begins the process of preparing a financing plan for the site. Additional hearings and approvals will be needed before the district is formally established.
The financing tool under consideration is an Enhanced Infrastructure Financing District, or EIFD. According to CBS Sacramento, the district would capture a portion of future property-tax growth generated by development at Innovation Park and direct it toward roads, traffic signals, stormwater systems, sewer lines and utilities.
What Sacramento Wants To Build In North Natomas
The city’s project overview describes Innovation Park as a mixed-use redevelopment of the former Sleep Train Arena site, combining housing, commercial space, parks, open space, education and health care. The centerpiece would be a California Northstate University medical campus with a planned 14-story, 730,000-square-foot hospital.
Earlier plans also called for roughly 2,500 homes, a K-8 school, parks and additional office, retail and commercial space, according to EngageSac. The arena was demolished in 2022, but major construction has yet to begin, leaving the property’s promised transformation stuck mostly in the planning phase.
The proposed structure is designed to limit the city’s exposure while tying public financing to a major private development milestone. Under the framework described by CBS Sacramento, tax revenue would not be distributed until the hospital or another qualifying catalytic project expected to create high-paying jobs is completed, and 80% of the increment would go to infrastructure while 20% would support affordable housing.
A Financing Plan Years In The Making
The latest move revives a process that has been discussed for years. A City of Sacramento term sheet presented in 2024 estimated that an Innovation Park EIFD could generate about $117 million in net present value over 45 years, including an estimated 20% share for affordable housing.
That earlier document also outlined three major pieces of the project: a residential Life District, a mixed-use Innovation District and a Health District centered on the university hospital. For North Natomas residents, Tuesday’s action is less a ribbon-cutting than a bureaucratic green light—but it is the clearest recent sign that Sacramento is trying to turn the former arena site into a functioning neighborhood.
