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Citrus Heights Messenger

Council Approves Subdivision for Hotel Development at Sunrise Mall

Jul 03, 2024 02:38PM ● By Shaunna Boyd

CITRUS HEIGHTS, CA (MPG) - At the June 27 meeting, the Citrus Heights City Council considered a Sunrise Tomorrow Hotel Parcel Map and Development Agreement, marking an important step toward Sunrise Mall’s redevelopment.

The Sunrise Tomorrow Specific Plan (STSP), adopted by the City Council in 2021, is intended to guide the redevelopment of the Sunrise Mall site into a mix of uses such as hotels, residential, retail, and offices.

The city received an application to subdivide a portion of the site in the northwest corner, fronting Greenback Lane to the north and Sunrise Boulevard to the west. The 2.8-acre site currently holds US Bank and large parking areas. The proposed project would subdivide the area into three parcels: 1.48-acres, 0.93-acres and 0.38-acres. US Bank would remain on the 0.93-acre parcel with 1.48 acres allocated for future hotel development and 0.38 acres for retail or restaurant development.

This project also includes a proposed Hotel Development Agreement, which would provide certainty for both the city and potential developers by setting guidelines for future design review, public improvements at the Sunrise/Greenback intersection, participation in a future infrastructure financing district, provisions for roadway right of way, infrastructure upgrades and operating standards.

To be eligible for approval, future hotel development would need to be at least three-star caliber with at least 110 rooms. Pre-approved hotel brands (Hilton, Hyatt, IHG, Kimpton Hotels, Marriott, Radisson, Sheraton and Wyndham) would undergo a streamlined review process, requiring only redevelopment of Planning Commission.

No development is proposed at this time but this subdivision map and the accompanying development agreement sets the stage for the property owner, Antioch Street LP, to begin the development process. The Planning Commission reviewed the application in May and City Council recommended it for approval.

Attorney David J. Bowie spoke on behalf of the applicant, Patrick Ellwood, Antioch Street LP principal, stating, “We’re very excited about the possibility. … We’re looking forward to being the first developer to make the Sunrise Mall redevelopment a reality.”

Mayor Bret Daniels expressed his “extreme gratitude” for Antioch Street’s proposal: “This is what’s going to start that little snowball going that we need to happen. And we couldn’t be happier to see this happening.”

City Council voted 4-0 to approve the subdivision map and the development agreement (Councilmember Tim Schaefer was absent).

The council considered a Business Attraction Incentive Request from DarkHeart Brewing for $86,869 to relocate their existing brewery to a location in Sylvan Corners at 7110 Auburn Blvd.

Economic Development and Community Engagement director Meghan Huber presented the item, explaining that DarkHeart’s application meets the eligibility criteria for the Business Attraction Incentive Program, which City Council established in February 2023. The program has $1 million in funding allocated from the city’s federal American Rescue Plan Act (ARPA) award, and those funds can be administered until June 30. After that, any unused funds would be returned to the American Rescue Plan Act fund for other eligible uses.

The program was established to help Citrus Heights attract businesses that would enhance the city’s vibrancy, such as restaurants, breweries and entertainment.

In February, Huber said, DarkHeart Brewing announced that it was closing unexpectedly due to new property ownership of the previous location at 4339 Auburn Blvd. in unincorporated Sacramento County. Staff immediately reached out about the Business Attraction Incentive Program for potential relocation into Citrus Heights.

DarkHeart Brewing, a small business owned by Rick and Cynthia Lee, had been in operation for five years, with award-winning recipes and an average of 20 beers on tap. They had well-established success at their prior location, with a loyal customer base. Huber said bringing in an already successful business instead of a start-up carries less risk, with a more likely return on the city’s investment.

Residents have expressed desire for a brewery in the city, so this relocation will bring more customers into Sylvan Corners, increasing sales for the surrounding restaurants and shops. And Huber said more customers can, in turn, attract even more businesses into the city.

“They’re small business owners who truly have a heart for community, which is really special,” said Huber. “They bring an immediate economic impact by moving in that will benefit the surrounding restaurants and other businesses.”

Cynthia Lee of DarkHeart Brewing said, “We are the epitome of a small business.”

She said that it “was really upsetting” to lose their original location “because their customers felt like family, with the brewery serving as a community center, hosting weddings and celebrations of life.”

“We are a place without a home and we’re hoping that Citrus Heights would consider us,” Lee said.

Mayor Daniels said, “These are tax dollars, so I’m leery of taking tax dollars to support private ventures. But in this case, obviously, we will be investing in a business that will return money to us in the form of sales tax. … So, to me it’s a no-brainer. It’s something that we should be supporting. It will bring, again, not only tax dollars to Citrus Heights but it will bring people and it will bring business. It’s a win for Citrus Heights. … It’s what we need as a city to be successful.”

City Council voted unanimously to approve the application to fund DarkHeart Brewing’s relocation to Citrus Heights.

The council then heard a Mid-Cycle Budget Review for Fiscal Years 2023/2024 and 2024/2025 and considered amendments to the budget.

For Fiscal Year 23/24 budget, there was an anticipated operating surplus of $4 million in the General Fund. When reviewing actual revenues and expenditures through May 2024 (with the fiscal year concluding at the end of June), staff are now forecasting a budget surplus of $5.7 million, an increase of $1.7 million.

Looking ahead to Fiscal Year 24/25, staff expect revenue to be almost $1 million higher than expected but expenditures to also be $1.2 million higher than expected, so the anticipated surplus of $794,588 needs to be adjusted down by $303,187. So, for the next fiscal year, $491,401 is expected to be added to the General Fund reserves.

Mayor Daniels said it was “just incredible news” to have a healthy reserve and City Council voted unanimously to approve the budget amendments.

The next meeting of the Citrus Heights City Council is scheduled for 6 p.m. July 10 at City Hall, 6360 Fountain Square Drive.