Joe Wagoner, CEO of the Mettle Shop, speaks during an agenda item about his proposal to build a sports complex at the Sunrise Mall during a council meeting at City Hall in Citrus Heights on Wednesday.
HANNAH RUHOFF
hruhoff@sacbee.com
Citrus Heights officials unanimously passed an agreement Wednesday evening that lays the groundwork for developers to build a new sports complex at the Sunrise Mall.
The deal was the first step in a larger plan to transform the property. Mill Valley-based Tallen Capital Partners has signed a letter of intent to acquire the real estate owned by Sunrise Mall’s largest property owner, and plans to sell about 14 acres to the developers of the sports complex, and turn the rest into housing, hotels, retail and restaurants.
Under the agreement approved Wednesday, the city may issue up to $60 million in debt financing for the proposed complex, which would have two covered turf fields and two NHL-sized ice sheets.
The bonds would be paid off with the sports facility’s revenues and secured by a lien. That would amount to half of the estimated $120 million construction budget, with the balance to be funded by private equity.
For city officials, the agreement marks the most significant progress yet in their efforts to see the Sunrise Mall redeveloped from a declining retail center into a vibrant, mixed-use property with housing, entertainment and hotels. The city, for the past four years, has backed an ambitious vision for the site that would see it transformed into a downtown of sorts for Citrus Heights.
Two years ago, a firm brought the council plans to subdivide the northwest section of the mall property to build a hotel, but that project has yet to materialize. Last year the council rejected a smaller-scale proposal by a developer looking to bring in drive-thrus and a Home Depot.
The city had previously launched an appraisal for the portion of the property that Tallen plans to buy — a potential first step toward taking over land through eminent domain. A city staff report says that if Tallen fails to move forward with the acquisition, the city is prepared to buy the property or consider condemning it. The city last year sued the owner, New York-based Namdar Realty Group, alleging that the firm had allowed the real estate to deteriorate to the point of public nuisance.
Jeannie Bruins, who served on the council from 2002 to 2022, recalled meeting with Namdar representatives in 2019 about the mall’s future.
“We all know how this has kind of dragged out over the years,” Bruins said during Wednesday’s meeting.
Bruins urged the council to approve the “historic opportunity.” The project, she said, could be as significant for Citrus Heights as the city’s incorporation in 1997.
City staff cast the sports complex as an anchor project that will eventually draw other investment to Sunrise Mall. City Manager Ash Feeney emphasized that, even with the sports complex, 86 acres would remain at Sunrise Mall for projects that residents have called for.
“This is that catalyst project that makes all the dominoes fall,” he said.
Joe Wagoner, CEO of The Mettle Shop, said his firm would develop the complex, and operate it after it opens. He said the group plans to bring a minor-league hockey team to the region. In an interview after the meeting, he said the Mettle Shop is under non-disclosure agreements with two leagues that could add expansion teams in the Sacramento area.
“Both of them are competitive,” he said.
Once fully up and running, the complex would employ 352 full-time equivalents, said Martha Lofgren, a partner with Brewer Lofgren who is handling land use and government affairs for the Mettle Shop.
Feeney said the city would issue bonds once the Mettle Shop has raised the other portion of the funding for the project. Wagoner said he anticipated “having everything we need in place” by the time the sale of the real estate closes.
Officials and developers argued that the Mettle Shop’s proposed project would address a growing demand for ice sports.
“We could be talking about, at a future winter Olympics, a Mesa Verde or a San Juan high school student who got their start at this ice arena,” Feeney said.
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Annika Merrilees is a business reporter for The Sacramento Bee. She previously spent five years covering business and health care for the St. Louis Post-Dispatch.