Sutter Health is in talks to scoop up nine properties from the Sacramento Regional Transit District in Midtown Sacramento, a potential deal that could significantly reshape several blocks along the neighborhood’s eastern edge. One of the parcels reportedly on the table is SacRT’s administrative center at 1400 29th Street, which would put any future clinics or outpatient services a short walk from Sutter Medical Center’s Midtown campus.
According to the Sacramento Business Journal, SacRT is negotiating a possible sale of nine Midtown parcels to Sutter Health. The outlet reports that a completed deal could open the door to redevelopment across several blocks at the eastern end of Midtown. For now, both sides are described as being in negotiations rather than having a finalized purchase-and-sale agreement.
SacRT states that the nine Midtown parcels were declared surplus in 2023 and put through a public process that included a notice of availability, multiple proposals and a previously approved purchase-and-sale agreement that later fell apart during due diligence. The agency’s surplus materials also note that two of the parcels are still used for SacRT operations, meaning any buyer would need to allow continued use or help with relocation. The properties are listed through CBRE, and SacRT indicates that some transactions may require federal review before they can move forward.
What Sutter’s Move Could Mean For Midtown
Sutter Health has been steadily expanding its regional footprint, including a plan to add 42 adult inpatient rooms at Sutter Medical Center, Sacramento, as part of broader capacity upgrades. That project is outlined by Sutter Health, and earlier reporting shows the system has already taken substantial downtown space for specialty care. If the SacRT parcels ultimately land under Sutter’s control, the health system could pull more ambulatory clinics, imaging and other outpatient services closer to its core Midtown campus.
How The Surplus Sale Process Works
Under California’s Surplus Land Act, local agencies must first offer surplus property to public agencies and certified affordable-housing developers, and they must document notices and negotiations with the state, according to guidance from the California Department of Housing and Community Development. The law was updated in 2024 with new procedures and enforcement tools, and HCD’s materials spell out the timelines for notice and negotiation that agencies are required to follow. One practical outcome is that if a site is developed with 10 or more housing units, an affordability covenant typically requires a specified share of those units to be reserved for lower-income households.
Next Steps And Timeline
SacRT’s public materials explain that the agency moved the Midtown sites to the open market after a prior affordable-housing proposal withdrew during due diligence, and the parcels were then listed through CBRE’s MidtownSacRT portal. As SacRT notes, federal approvals and any recorded covenants will influence what buyers are allowed to build and how quickly projects can proceed. Observers say the next several weeks should reveal whether Sutter and SacRT reach a new purchase-and-sale agreement or whether other bidders step back into the picture…