2025-01066 An Ordinance Deleting and Adding Section 15.148.965 of the Sacramento City Code, Relating to Agreements for Digital Billboards (M25-012) — Law and Legislation Committee, November 18, 2025

City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01066 11/18/2025
An Ordinance Deleting and Adding Section 15.148.965 of the Sacramento City Code, Relating to Agreements for Digital Billboards (M25-012)
File ID: 2025-01066
Location: Citywide
Recommendation: 1) Review an ordinance deleting and adding section 15.148.965 of the Sacramento City Code, relating to agreements for digital billboards; and 2) pass a Motion forwarding the ordinance to the City Council for consideration.

Contact: Matthew Sites, Senior Architect, AIA, LEED AP, (916) 808-7646, [email protected]; Bruce Monighan, Urban Design Manager, (916) 808-5260, [email protected]; Community Development Department Presenter: Matthew Sites, Senior Architect, AIA, LEED AP, (916) 808-7646, Community Development Department
Attachments:
1-Description/Analysis
2-Ordinance (Redline)
3-Ordinance (Clean)
4-Staff Presentation
Description/Analysis
Issue Detail: On June 10, 2025, the City Council approved multiple agreements, collectively referred to as the “Definitive Documents,” between Downtown Railyard Venture, LLC, Indomitable Ventures, LLC, and the City. These agreements were executed to facilitate the establishment and development of new entertainment venues within the Railyards.

The Definitive Documents include the comprehensive project agreement (City Contract #2025-4665), in which the City agreed to bring forward for City Council consideration any amendments to the Sacramento City Code necessary for Indomitable to install and operate up to seven digital billboards in the city. To satisfy this obligation, staff is recommending revisions to city code section 15.148.965, which addresses agreements for digital billboards.

Currently, section 15.148.965 addresses two kinds of agreements for digital billboards -relocation agreements and funding agreements for an indoor arena or outdoor stadium that is capable of hosting professional major-league sports and has permanent seating for at least 15,000 persons. The

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File ID: 2025-01066 11/18/2025
maximum number of digital billboards allowed under a funding agreement for an indoor arena or outdoor stadium is six. To accomplish the goal of allowing Indomitable to install and operate up to seven digital billboards in the city, staff proposes to revise section 15.148.965 to authorize up to seven digital billboards in connection with a funding agreement for an outdoor stadium that is capable of hosting professional major-league sports and has permanent seating for at least 12,000 persons.

Staff is not proposing any changes to the minimum seating requirements or maximum number of digital billboards for indoor arenas. Consistent with the current requirements, all digital billboards must be located on City-owned or City-leased property.

To increase transparency and facilitate navigation through the city code, section 15.148.965 should address all agreements for digital billboards authorized by the city code. As a result, staff recommends revising section 15.148.965 to refer to agreements for digital billboards in Railyards sign district - subdistrict 3. The substantive provisions related to these agreements will be adopted as part of a separate ordinance.

The remainder of the proposed changes to section 15.148.965 are organizational and non- substantive.

Policy Considerations: Sign regulations are used to preserve and improve the appearance of the City as a desirable place in which to live; to safeguard and enhance property values; to protect public and private investment in buildings and open spaces; and to promote the public health, safety, and general welfare. The City and its residents will benefit from funding agreements for new digital billboards, as the digital-billboard owners will contribute significantly to the construction of a facility capable of supporting a major-league sports team. In addition, limiting the construction of digital billboards to specific City-owned and City-leased lands selected by the City Council in consultation with City staff will prevent the uncontrolled proliferation of digital billboards throughout the City while also promoting new technology to increase economic vitality for businesses.

The proposed ordinance would also further the following goals in the City’s 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.

The city entered into agreements with the Indomitable to facilitate construction of a major sports and entertainment venue that will serve as a regional economic catalyst.

Amending existing city ordinance to allow seven freeway digital billboards financially supports the outdoor stadium for professional sports is consistent with General Plan Policy E-1.6. The Sacramento Railyards is designated as an Opportunity Area in the General Plan, identified for strategic reinvestment and employment-generating uses.

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File ID: 2025-01066 11/18/2025
These agreements demonstrate the City’s commitment to working collaboratively with property owners and private partners to advance inclusive economic development objectives. The stadium will generate substantial construction and permanent jobs, support local contracting opportunities, and stimulate secondary economic activity in hospitality, retail, and tourism sectors. Development of this currently vacant site will activate surrounding parcels, attract complementary investment, and encourage additional residential and mixed-use development consistent with the Railyards Specific Plan.

Goal E-2 Sustained and Inclusive Growth Sustained, inclusive growth that generates long-term, shared value in the community and creates economic opportunities for all residents.

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.

The City Council approved multiple agreements to serve as the principal mechanism to align private investment with public policy objectives, ensuring that the project contributes to workforce participation, infrastructure funding, and local economic inclusion. The preliminary term sheet required the City to implement several terms associated with the stadium effort. One of those actions is the amendment of the City Sign Code relative to highway digital billboards associated with major event venues.

Granting seven new freeway digital billboards throughout the city provides revenue to support stadium construction just as was completed for the Golden 1 Center project.

Through these agreements, the City secured commitments that transform the Railyards Opportunity Zone incentive into a community benefit tool-linking new capital investment to local hiring, contracting, and business development opportunities. The stadium project exemplifies how Opportunity Zone investment can be structured to achieve shared value, catalyze adjacent development, and create equitable economic opportunity for residents citywide.

Goal LUP-9 Arts, Culture and Entertainment. Arts, culture, and entertainment that enriches neighborhood quality of life, strengthens community identity, and contributes to economic prosperity.

Policy LUP-9.1 Cultural and Entertainment Centers. The City shall support the equitable development of cultural, art, entertainment, and recreational facilities and events in the city to attract visitors, support a quality of life for residents, celebrate and strengthen Sacramento’s unique identity.

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File ID: 2025-01066 11/18/2025
Policy LUP-9.3 Assembly Facilities and Event Centers. The City shall encourage and support the development of assembly facilities for social, cultural, entertainment, sports, educational, and religious activities. The design and programming of these facilities should reflect the diversity of the community.

The City’s goals and policies promoting the development and activation of vacant parcels within the Railyards are exemplified through several high-impact projects, including the new Kaiser Hospital, the historic Paintshop music venue, and the proposed Republic FC Soccer Stadium, which represents a major component of this strategy. Construction of the stadium requires substantial private capital, with revenues from supporting elements, such as digital billboards, providing an important, though modest, portion of funding.

The stadium directly advances Goal LUP-9 by complementing other cultural and entertainment venues in the city, supporting a diversity of activity types and attracting visitors to the area. Once operational, the stadium will serve as a catalyst for additional development, encouraging complementary cultural, residential, and commercial projects, consistent with Policy LUP-9.1, which emphasizes equitable development of cultural and entertainment facilities, and Policy LUP-9.3, which encourages assembly facilities that reflect the diversity and vibrancy of the community.

Economic Impacts: The proposed amendment will allow for additional digital billboards on both City- owned and City-leased lands, resulting in significant financial contributions to the construction of new outdoor stadiums for hosting professional sports, such as the USL. Furthermore, the digital billboards are expected to display advertising geared to increase business within the Sacramento region and to increase the region’s economic vitality.

Environmental Considerations: Section 15.148.965 currently does not itself authorize the construction of any digital billboards. It only sets forth the conditions and requirements, including California Environmental Quality Act (CEQA) review, under which the City Council may approve digital billboards that might be proposed for specific sites yet to be identified. The proposed amendment does not change this. Accordingly, the proposed action is not a “project” for purposes of CEQA, as meaningful environmental review is not yet possible. (14 Cal. Code Regs. § 15004, subd. (b); Friends of the Sierra Railroad v. Tuolumne Park & Recreation Dist. (2007) 147 Cal.App.4th 643, 653-659 [holding that a district’s proposed sale of land to an Indian tribe interested in developing it was not a project because no concrete development plans had been proposed, and “CEQA review in the absence of a plan involving an identifiable impact would not be meaningful”].) The City retains discretion whether to enter into an agreement for digital billboards after conducting appropriate CEQA review. Even if the proposed action were a “project,” it would be exempt from CEQA because there is no possibility that it might have a significant effect on the environment (14 Cal. Code Regs. § 15061 (b)(3)) and because it is an administrative action that will not result in direct or indirect physical changes in the environment (14 Cal. Code Regs. §§ 15060(c)(3) and 15378(b)(5)).

Sustainability: No sustainability considerations apply to the proposed ordinance.

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File ID: 2025-01066 11/18/2025
Commission/Committee Action: None.

Rationale for Recommendation: The Council-approved Definitive Documents acknowledge the strategic and economic role of digital signage in the success of privately funded professional outdoor sports stadiums. The comprehensive project agreement requires the City to bring forward for City Council consideration any amendments to the city code required to allow seven digital billboards in the city. Consistent with the Definitive Documents and the comprehensive project agreement, the proposed ordinance amends city code section 15.148.965 to authorize agreements for up to seven digital billboards located on City-owned or City-leased properties associated with the private funding of a professional outdoor sports stadium.

Financial Considerations: The proposed amendment will authorize agreements for up to seven new digital billboards on City-owned or City-leased lands associated with private funding of an outdoor stadium for professional sports. The proposed amendment will cause no negative impact to the General Fund; in particular, there will be no cost to the City for any new billboard.

Local Business Enterprise (LBE): Not applicable.

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ORDINANCE NO.

Adopted by the Sacramento City Council
Date Adopted

AN ORDINANCE DELETING AND ADDING SECTION 15.148.965 OF

THE SACRAMENTO CITY CODE, RELATING TO AGREEMENTS FOR

DIGITAL BILLBOARDS

BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:

SECTION 1.

Section 15.148.965 of the Sacramento City Code is hereby deleted.

15.148.965 Agreements for digital billboards.

A. Definitions. As used in this section, "city-owned property" means real property the city owns in fee, and "city-leased property" means real property in which the city has a leasehold interest.

B. Relocation agreements. Notwithstanding anything to the contrary in this chapter (including section 15.148.640) or in any ordinance not codified in this chapter (including Ordinance No. 2007-079), the city council may approve relocation agreements under section 15.148.815 that authorize the construction and operation of digital billboards on city-owned property adjacent to a freeway, subject to the common provisions in subsection D of this section and the following additional provisions:

1. Notwithstanding subsection F.3 of section 15.148.815, the city-owned property may be in any commercial zoning district or industrial zoning district.

2. Notwithstanding any provision to the contrary in section 15.148.815, an existing billboard that is removed and relocated under a relocation agreement that authorizes the construction and operation of a digital billboard may be either a legal conforming sign or a legal nonconforming sign.

C. Funding agreements. Notwithstanding anything to the contrary in this chapter (including section 15.148.640) or in any ordinance not codified in this chapter (including Ordinance No. 2007-079), the city council may approve agreements that authorize the construction of digital billboards on city-owned or city-leased property adjacent to a freeway, subject to the common provisions in subsection D of this section and the following additional provisions:

1. The agreement may authorize the construction and operation of up to six digital billboards.

2. The owner of the digital billboard or billboards authorized by the agreement (or an affiliate of the owner) must agree, among other things, to the following:
a. To fund at least 40% of the costs to design and construct an indoor arena or outdoor stadium that is capable of hosting professional major-league sports and has permanent seating for at least 15,000 persons.
b. At no cost to the city, to remove the digital billboard or billboards from the city-owned or city-leased property at the expiration of the agreement's term, which may not exceed 35 years, and to restore the property to its pre-agreement condition.

3. No more than six digital billboards may be authorized for each facility to which contributions are made under subsection C.2.a of this section.

4. The city council must find that the agreement will confer a substantial public benefit to the city and to the general public, identifying the benefit with reasonable specificity. In addition, the city council must find that each digital billboard identified in the agreement satisfies the following:
a. It complies with the purpose and requirements of this section and this chapter.
b. 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.
c. It will not interfere with on-site access, circulation, or visibility. d. It will not create a traffic or safety hazard.
e. It will not result in any undue or significant increase in visual clutter in the area surrounding the city-owned or city-leased property.

5. The city-owned or city-leased property must be in a commercial zoning district or an industrial zoning district.

D. Common provisions. All digital billboards authorized by this section are subject to the following provisions:

1. Each digital-display face must be oriented primarily for viewing from the adjacent freeway.

2. Notwithstanding anything to the contrary in this chapter, the maximum height of a digital-billboard structure, measured from grade to the top of the digital- display face, is 85 feet; and the overall maximum height, measured from grade to the top of the billboard structure, is 90 feet.

3. Notwithstanding anything to the contrary in this chapter, the maximum area of each digital-display face is 700 square feet, and a digital billboard may have either one or two digital-display faces.

4. A digital billboard may display only a series of still images, each of which is displayed for at least eight seconds. The still images may not move or present the appearance of motion and may not use flashing, scintillating, blinking, or traveling lights or any other means not providing constant illumination. Transition or blank screen time between still images may not exceed one second.

5. The owner of the digital billboard must comply with all applicable federal, state, or local laws when constructing, operating, improving, maintaining, repairing, and removing the digital billboard, including the Highway Beautification Act of 1965 (23 U.S.C. § 131), the Outdoor Advertising Act (Cal. Bus. & Prof. Code, § 5200 et seq.), the regulations promulgated to implement the Outdoor Advertising Act (4 Cal. Code Regs. § 2242(c) et seq.), and this chapter.

6. The city must comply with the California Environmental Quality Act (Cal.

Pub. Resources Code, § 21000 et seq.) before approving an agreement that authorizes a digital billboard.

SECTION 2.

Section 15.148.965 is hereby added to the Sacramento City Code to read as follows:

15.148.965 Agreements for digital billboards.

A. Definitions. As used in this section, "city-owned property" means real property the city owns in fee, and "city-leased property" means real property in which the city has a leasehold interest.

B. Relocation agreements. Notwithstanding anything to the contrary in this chapter (including section 15.148.640) or in any ordinance not codified in this chapter (including Ordinance No. 2007-079), the city council may approve relocation agreements under section 15.148.815 that authorize the construction and operation of digital billboards on city-owned property adjacent to a freeway, subject to the common provisions in subsection F of this section and the following additional provisions:

1. Notwithstanding subsection F.3 of section 15.148.815, the city-owned property may be in any commercial zoning district or industrial zoning district.

C. Funding agreements — indoor arenas. Notwithstanding anything to the contrary in this chapter (including section 15.148.640) or in any ordinance not codified in this chapter (including Ordinance No. 2007-079), the city council may approve agreements that authorize the construction of digital billboards on city-owned or city-leased property adjacent to a freeway, subject to the common provisions in subsection F of this section and the following additional provisions:

1. The agreement may authorize the construction and operation of up to six digital billboards.

2. The owner of the digital billboard or billboards authorized by the agreement (or an affiliate of the owner) must agree, among other things, to the following:
a. To fund at least 40% of the costs to design and construct an indoor arena that is capable of hosting professional major-league sports and has permanent seating for at least 15,000 persons.
b. At no cost to the city, to remove the digital billboard or billboards from the city-owned or city-leased property at the expiration of the agreement's term, which may not exceed 35 years, and to restore the property to its pre-agreement condition.

3. No more than six digital billboards may be authorized for each facility to which contributions are made under subsection C.2 of this section.

5. The city-owned or city-leased property must be in a commercial zoning district or an industrial zoning district.

D. Funding agreements — outdoor stadiums. Notwithstanding anything to the contrary in this chapter (including section 15.148.640) or in any ordinance not codified in this chapter (including Ordinance No. 2007-079), the city council may approve agreements that authorize the construction of digital billboards on city-owned or city- leased property adjacent to a freeway, subject to the common provisions in subsection F of this section and the following additional provisions:

1. The agreement may authorize the construction and operation of up to seven digital billboards.

2. The owner of the digital billboard or billboards authorized by the agreement (or an affiliate of the owner) must agree, among other things, to the following:
a. To fund at least 40% of the costs to design and construct a multipurpose outdoor stadium that is capable of hosting professional major-league sports and has permanent seating for at least 12,000 persons. b. At no cost to the city, to remove the digital billboard or billboards from the city-owned or city-leased property at the expiration of the agreement's term, which may not exceed 35 years, and to restore the property to its pre-agreement condition.

3. No more than seven digital billboards may be authorized for each facility to which contributions are made under subsection D.2 of this section.

4. Notwithstanding anything to the contrary in this chapter, for up to two digital billboards under an agreement authorized by this subsection D of this section, the maximum area of each digital-display face is 1,200 square feet, and each such digital billboard may have either one or two digital-display faces.

5. The city council must find that the agreement will confer a substantial public benefit to the city and to the general public, identifying the benefit with reasonable specificity. In addition, the city council must find that each digital billboard identified in the agreement satisfies the following:
a. It complies with the purpose and requirements of this section and this chapter.
b. 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.
c. It will not interfere with on-site access, circulation, or visibility. d. It will not create a traffic or safety hazard.
e. It will not result in any undue or significant increase in visual clutter in the area surrounding the city-owned or city-leased property.

6. The city-owned or city-leased property must be in a commercial zoning district or an industrial zoning district.

E. Agreements for digital billboards in Railyards sign district – subdistrict 3. The city council may approve agreements that authorize digital billboards in subdistrict 3 of the Railyards sign district under section 15.148.193.G.

F. Common provisions. All digital billboards authorized by subsection B, D, or E of this section are subject to the following provisions: