Title
Contract: Railyards Master Lease for Digital Billboards
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FileID
File ID: 2026-00324
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Location
Location: Downtown Railyards, District 4
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Recommendation
Recommendation: 1) Adopt a Resolution approving the addendum to the Railyards Specific Plan Update, KP Medical Center, MLS Stadium, & Stormwater Outfall Projects Subsequent Environmental Impact Report (SEIR); and 2) pass a Motion: a) finding the two digital billboards described in Exhibits A and B of the Master Lease for Digital Billboards (Master Lease) satisfy all the criteria set forth in Sacramento City Code Section 15.148.193.G.1.h.(i)-(v); and b) authorizing the City Manager or designee to execute the Master Lease with Downtown Railyard Venture, LLC.
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Contact
Contact: Marco Gonzalez, Senior Development Project Manager, (916) 808-5757, mgonzalez@cityofsacramento.org; Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, lfritzsche@cityofsacramento.org; Office of Innovation and Economic Development
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Master Lease for Digital Billboards City of Sacramento and Downtown Railyard Venture, LLC
3-Resolution
4-Exhibit A to Resolution
5-Map
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Description/Analysis
IssueDetail
Issue Detail: In November of 2024, the City Council unanimously approved the Sacramento Republic FC Preliminary Term Sheet, which provided the key terms, process, and framework to negotiate definitive legal documents and potential approvals to catalyze additional development in the Railyards including, but not limited to a Republic FC Soccer Stadium, and rehabilitation of the Historic Central Shops district. In June of 2025, Council unanimously approved the definitive documents, which included a Comprehensive Project Agreement, Master Funding Agreement, Development Agreement Assignment and Assumption Agreement. These documents contained details to implement the framework that was agreed to by the parties in the Term Sheet. The definitive documents included provisions for on-site digital signage in the Railyards, including a commitment to expedite for City Council consideration a sign district ordinance that would allow agreements for up to five off-site digital signs, and a Master Lease template. On December 2, 2025, the City Council adopted an ordinance that allows agreements for up to five digital billboards in subdistrict 3 of the Railyards sign district.
The Master Lease between the City of Sacramento and Downtown Railyard Venture, LLC (Attachment 1) allows for up to five digital billboards, includes a term of 34 years, and includes early termination clause if the project does not build out consistent with the definitive documents. At this time, the City Council is being asked to approve two of the five digital billboards under the Master Lease. The two digital billboards to be constructed under the Master Lease at this time are located in the Railyards west side with each billboard flanking the I-5 freeway. Each double-faced billboard will be V-shaped and oriented perpendicularly to the I-5 freeway and away from the river. Each billboard are a rectangular 25 foot by 48 foot landscape display and will not exceed 100’ in total height to conform to adopted City code. The overall aesthetic is simplistic in nature through a simple cylindrical post with frameless digital displays and a vertical Railyards logo between the displays.
Sacramento City Code Section 15.148.193.G.1.h requires the Council to make certain findings before authorizing an agreement for construction of digital billboards on city-owned or city-leased property within subdistrict 3 of the Railyards sign district. The City Council must find that each digital billboard identified in the agreement satisfies the following:
1. It complies with the requirements of City Code Section 15.148.193 and Chapter 15.148.
2. It is compatible with the uses and structures on the city-owned or city-leased property and in the surrounding area, including parks, trails, and other public facilities and amenities.
3. It will not interfere with on-site access, circulation, or visibility.
4. It will not create a traffic or safety hazard.
5. It will not result in any undue or significant increase in visual clutter in the area surrounding the city-owned or city-leased property.
Staff has reviewed the digital billboards at the two freeway locations (see Attachment 5 - Map) identified in Exhibits A and B of the Master Lease and find that each digital billboard:
1. Complies with the requirements of City Code Section 15.148.193 and Chapter 15.148.
2. Is compatible with the uses and structures on the city-owned or city-leased property and in the surrounding area, including parks, trails, and other public facilities and amenities.
3. Will not interfere with on-site access, circulation, or visibility.
4. Will not create a traffic or safety hazard.
5. Will not result in any undue or significant increase in visual clutter in the area surrounding the city-owned or city-leased property.
The Master Lease includes locations for the other three digital billboards, but staff is not requesting that the City Council make the required findings for those three digital billboards at this time as more information is needed about the detail of those digital billboards. Staff will return to City Council for approval of the necessary findings for these remaining three digital billboards.
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PolicyConsiderations
Policy Considerations: The matters in this staff report are consistent with the following goals in the 2040 General Plan:
Goal E-1 Business Attraction and Development. A dynamic, resilient economy with a diverse array of business in established and emerging industry sectors.
Policy E-1.6 Growth in Opportunity Areas. The City should endeavor to work with property
owners, particularly those in Opportunity Areas, to encourage development projects that
generate local jobs and further inclusive economic development objectives.
Policy E-2.5 Opportunity Zones. The City should consider use of development agreements
and other mechanisms to help ensure that inclusive economic objectives are achieved as
development occurs in Opportunity Zones (as defined in Tax Cuts and Jobs Act of 2017) and
throughout the city.
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EconomicImpacts
Economic Impacts: The Railyards will contribute substantial ongoing economic activity through its diverse uses, including residential areas, hospitals, office spaces, entertainment venues, retail establishments, and hotels. According to the May 2025 economic impact analysis (Unlocking the Economic Impact of the Sacramento Railyards: Engine for Revitalization of Downtown and the Region) prepared by Stantec Urban Places USA in collaboration with Economic Planning Systems the Railyards projects will generate:
• 13,539 direct on-site jobs, spanning sectors such as healthcare, retail, hospitality, and professional services.
• 23,914 total jobs, including indirect and induced effects, supported throughout Sacramento County.
• $2.11 billion in annual wages across Sacramento County, strengthening the local workforce.
This includes $2.49 billion from business operations and employment and an additional $1.96 billion, fueled by supplier demand and increased consumer spending.
• $63.3 million in annual wages from Phase 1 of the Historic Central Shops rehabilitation.
• $240.5 million in total economic output from the Stadium’s construction, supporting 1,159 total jobs, including 800 direct construction jobs.
• $1.9 million in wages and $4.2 million in annual economic output for the Stadium.
• Over 1 million annual visitors to the Stadium area, boosting hotel occupancy, restaurant activity, and retail sales.
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EnvironmentalConsiderations
Environmental Considerations: On November 10, 2016, the City Council certified a Subsequent Environmental Impact Report (SEIR) and adopted Findings of Fact and a Statement of Overriding Considerations and a Mitigation Monitoring Plan for the Railyards Specific Plan Update (RSPU), KP Medical Center, MLS Stadium, & Stormwater Outfall Projects (P15-040) (Project) (Resolution No. 2016-0379).
The Current Project (Railyards Master Lease for Digital Billboards) implements the elements of the Project where the SEIR described a sign program be developed. The Current Project will authorize the construction and operation of up to five digital billboard within the Sacramento Railyards Specific Plan (RSP) Area (or Railyards Special Planning District). The Project, as evaluated in the 2016 Railyards Specific Plan Update Subsequent EIR (2016 RSPU SEIR) analyzed development throughout the Railyards consisting of the Kaiser Permanente Medical Center, the soccer stadium, a mixture of other land uses and development types, and associated infrastructure and appurtenant facilities, including a sign program.
With the ultimate development and operation of the five digital billboards, the City must ensure that environmental review has been completed consistent with the requirements of the California Environmental Quality Act (CEQA) and the State CEQA Guidelines. Planning staff have reviewed the Current Project and determined that the proposed changes to the Project did not require the preparation of a subsequent EIR. An addendum to the previously certified SEIR was then prepared to address the modification to the Project. This addendum to a certified SEIR has been prepared pursuant to Title 14, Section 15164 of the California Code of Regulations and the Sacramento Local Environmental Regulations (Resolution 91-892) adopted by the City of Sacramento.
The Current Project is consistent with the SEIR, and the analysis of impacts and mitigation in the SEIR is adequate and remains applicable for the Current Project. None of the circumstances set forth in CEQA Guidelines Section 15162 are present.
The SEIR, Addendum, and Resolution No. 2016-0379 may be found at:
https://www.cityofsacramento.gov/community-development/planning/environmental/impact-reports
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Sustainability
Sustainability: None.
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Commission/Committee Action
Commission/Committee Action: None.
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RationaleforRecommendation
Rationale for Recommendation: Approval of the Master Lease and findings for two digital billboard locations is consistent with the unanimously approved Term Sheet and definitive documents to implement projects in the Railyards. These projects are envisioned to result in over $325 million in new private investment in the area.
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FinancialConsiderations
Financial Considerations: The Railyards will stimulate economic benefits to the City, including sales taxes, parking revenue, and jobs and spur additional development and build-out of the Railyards transforming this large infill site into a vibrant new addition to downtown, realizing the long-awaited vision of its redevelopment potential. The digital billboards described in this report are an essential revenue source for the completion of the catalytic Railyards projects.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): None.
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Background
Background: On April 8, 2025, the City Council passed a motion directing the City Manager or designee to prepare for City Council consideration an ordinance establishing a Railyards special sign district which would include the limited use of digital billboards, consistent with the procedures established in Sacramento City Code chapter 15.148 and the Council Rules of Procedure. The Urban Design Manager considered preliminary areas proposed by the developer, DRV, and had determined that the general areas were suitable to meet the City’s goals and policy direction to activate the Railyards. Staff then prepared an ordinance to meet the motion from council (basing the ordinance on lessons learned on the ESC special sign district) and the Railyards sign district, including a maximum of five digital billboards in Subdistrict 3 which was unanimously approved on December 2, 2025.
On June 10, 2025, the City Council approved definitive legal documents identified in the term sheet (Resolution 2025-0152). As part of the term sheet, the city agreed to present to the City Council for consideration amendments to the City Code to create a Railyards special sign district which would include up to five digital billboards. Staff started developing the Railyards special sign district into five subdistricts with subdistrict 3 as the focus for digital billboards. Staff continued developing the new Railyards special sign district through biweekly ownership meetings.
On June 28, 2025, the Planning and Design Commission adopted a resolution recommendation that the City Council designate the Railyards special planning district as a special sign district (Resolution 2025-0002). Since the PDC adopted the resolution, staff has developed the replacement for section 15.148.193 of the Sacramento City Code (Railyards Special Planning District) with the new overall sign district boundaries and five subdistricts to align with development and financial schedules for each subdistrict.
On December 2, 2025, City Council unanimously approved the Railyards Sign District (section 15.148.193 of the Sacramento City Code). Within the Railyards Sign District, subdistrict 3 enables development of a maximum of five digital billboards in various locations such as freeway-oriented billboards and urban-scale gateway entrances and focal points. All digital billboards per the adopted code must be located on City owned or leased properties. Approval of the Master Lease Agreement by Council, in conjunction with Urban Design Director Site Plan and Design Review, Council approval of findings, and other applicable regulatory approvals will enable the master developer of the Railyards (DRV) to develop digital signage on site (consistent with the definitive legal documents approved by Council on June 10th, 2025).
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