Local Gaming Tribes Eye Downtown Sacramento Properties

Flush with revenue from new and ongoing casinos in the Sacramento region, local tribes are putting dollars back into their operations, buying land nearby and boosting the economic fortunes of their tribal members.

But recently, some of them are also making a bet far from the jingle-jangle of their slot machines — Downtown Sacramento real estate.

“I think it’s a really good sign,” said Michael Ault, executive director at the Downtown Sacramento Partnership, a property business improvement district covering much of the central city. “There have been a lot of encouraging discussions around community development, and it’s something they wanted to be part of.”

Tribes making moves in Downtown Sacramento

Three tribes with casino operations — Wilton Rancheria in Elk Grove, Shingle Springs Band of Miwok Indians in El Dorado County and United Auburn Indian Community in south Placer County — have all made urban core investments in recent years, though the apparent reasons and types of investments vary.

UAIC, which operates Thunder Valley Casino Resort near Lincoln, partnered with Sacramento-based The Evergreen Company in 2019 to pay $127 million for 300 Capitol Mall, also known as Emerald Tower.

At the time, occupancy in the building was nearly 92%, though it’s dropped since to 69% as office demand has softened in the hybrid workplace era that’s emerged post-Covid, according to JLL’s Skyline report.

Red Hawk Casino-affiliated Shingle Springs Band first bought 2700 J St., an empty retail building in Midtown Sacramento, for $4 million in 2023, for use as a cultural center.

But the same tribe made an even bigger move last spring, buying a full city block of developable land at 301 Capitol Mall in Downtown Sacramento for $17 million.

So far, the tribe has not detailed its plans for the property, though it had a ceremony there in November and said last fall it would share a vision and potential development for 301 Capitol Mall in early 2025.

Wilton Rancheria, the relative newcomer to tribal gaming with Sky River Casino in Elk Grove opening less than three years ago, is at this point poised to make the most visible investment yet.

Last fall, city and tribal officials announced a plan for Wilton Rancheria to become majority owner of the Sacramento Republic FC soccer club, and build a stadium for the team on 31 acres the tribe plans to buy from the master developers for the Railyards project north of Downtown Sacramento.

Though that deal hasn’t closed yet and a sale price hasn’t been announced, new stadium renderings are expected this spring, and construction of a 12,000-seat stadium is slated to begin this summer.

The piece Wilton Rancheria is buying includes surrounding land for ancillary development such as retail and housing, with formal plans also expected to emerge soon.

In discussing how the deal came together last year, tribal Chief Operating Officer Chris Franklin said the deal made sense to expand on the tribe’s success with tourism and entertainment in Sky River Casino. As other tribal members have said in similar investments, reacquiring ancestral tribal lands was also a motivation, he said.

“It made a lot of sense for us,” he said of a deal that came together in about a year.

Land investment isn’t unusual for tribes

All three tribes haven’t exclusively bought land in the region’s urban core. United Auburn, which has had a casino for more than two decades, in 2023 bought 120 acres of undeveloped land southwest of Thunder Valley, within the Placer One project. No concrete plans have emerged for that land, bought for $4.67 million.

Shingle Springs Band has bought land around its casino and near Highway 50 in El Dorado County, establishing a gas station and convenience store on one parcel.

And Wilton Rancheria is in the process of acquiring about 100 acres surrounding and near Sky River from development company Merlone Geier Partners in a series of acquisitions.

Tribal representatives generally declined to comment on their land acquisitions or update their plans for them. Shingle Springs Band has in particular noted its previous tribal lands included a village near the confluence of the American and Sacramento rivers — now within the city of Sacramento — before the U.S. government forcibly relocated the tribe to El Dorado County.

In that sense, buying Downtown Sacramento land is simply a return to the tribe’s ancestral home.

“It’s been really impactful to the community up here,” Tribal Administrator Dustin Murray said last spring, after the tribe closed escrow on 301 Capitol Mall. “It’s a healing step in feeling full again.”

This map features recent tribal purchases.

Where tribes spend money

Investment by tribes in urban properties may also simply reflect smart business.

Tribes with new wealth as a result of newly opened casinos have pursued a variety of avenues to spend that wealth, generally for the further betterment of tribal members.

Some tribes issue direct monetary payments to tribal members every month, though the practice is controversial in some circles because it’s seen as creating a new form of dependency rather than self determination.

Other tribes broaden their reach in economic development, often with a real estate component.

A 2022 post on Tribal Government Gaming, a news site for such issues, detailed tribes in California and elsewhere investing in solar energy projects, agriculture, storage, event venues and hotels, with the last two of particular interest to gaming tribes because of their experience providing those services at their casinos.

Middle Market Growth magazine, in a 2020 story, also took note of tribes diversifying their reach, buying established companies based in operations other than gambling and in one case in Michigan, buying an 18-story tower with a mix of uses in Grand Rapids.

The chairperson of a firm that advises tribes on financial matters said investing in real estate is a component of smart diversification, with competition in the gambling world continuing to increase.

“As tribes grow their economy, the natural thing to do is diversify,” said Kristi Jackson, of El Segundo-based TFA Capital Partners. “A lot of what you’re seeing is related to that.”

Typically, buying land is either about reclaiming ancestral lands, a pure economic investment, or sometimes both, she said. Tribes may want to invest for direct economic benefit by developing a site, or through something more indirect, like leasing it to another entity to develop or, if the law allows, collecting sales or excise taxes generated on the property itself, she said.

What’s next for Downtown Sacramento

Ault, of Downtown Sacramento Partnership, said the recent tribal investments in Downtown Sacramento show recognition of the area’s pivot from being solely an employment hub to a neighborhood known for housing, hospitality, events, cultural amenities, destination retail and job centers.

“Downtowns are going to be different, and this reflects that,” he said, adding he met with members of Wilton Rancheria as they investigated the possibility of buying Republic FC and pushing forward the stadium project. “I think they looked at it as an opportunity to be part of something transformational, something outside casino operations.”

Jackson, of TFA Capital, said she couldn’t comment on the plans or strategy tribes in the Sacramento region are pursuing through their investment.

Generally, a tribe’s plan for property depends on a combination of factors including their tribal membership’s wishes, the tribe’s policies, their relationship with neighbors and local governments, and more, she said.

Tribes often take lands into trust, particularly for their casino operations. But don’t presume they’ll move to do so with every piece of land they buy, Jackson said, because doing so would complicate trading out of it later.

As tribes like Wilton Rancheria are still scaling up their casino operations, their members have hinted their recent investments won’t be their last ones.

Franklin, whose tribe is expanding Sky River Casino with more parking, a hotel and more, said last year, “we’ll be talking again.”