Building owner vows a stand on K Street

Moe Mohanna said he doesn't intend to speak today when the Sacramento City Council decides whether to use eminent domain to force him to sell his properties in the 700 block of K Street.

That doesn't mean he will go quietly, however.

Standing in the space he recently fixed up for the Texas Mexican restaurant off K Street, Mohanna said he'll fight to the end. "When the sheriff comes, I will be chained to that door with my family and daughters, and they'll have to drag me out of here," he said.

Mohanna, who has owned property downtown since the 1970s, has become a celebrity as his fight with the city drags on.

The city has portrayed Mohanna as the biggest obstacle to redevelopment of a particularly bleak stretch of K Street. Mohanna, in turn, has positioned himself as a champion of small, locally owned businesses against big developers funded by city subsidies.

The conflict between Mohanna and the city is headed for a 2 p.m. showdown when the City Council votes whether to authorize use of eminent domain.

Mohanna took a Bee reporter on a tour of his properties Monday to prove he has spent money fixing them up.

Throughout the tour, it was clear that Mohanna's vision of redevelopment is far different from the city's. Mohanna has accumulated about 20 properties, nearly all of them on J and K streets.

Mohanna's idea of renovation seems to be using his own hands to sand woodwork and plaster walls. Most of his buildings are occupied by small businesses.

One place Mohanna likes to show off is the Temple Fine Coffee and Tea, housed in the Tudor style building on 10th Street that was formerly Levinson's Book Store. The beams in the peaked ceiling contrast with the bluish green hue of the newly painted walls. The coffee shop has a new parquet floor.

"I did the floor personally," Mohanna said. "I scraped the wood personally with my own hands."

But the city isn't looking for such piecemeal improvements on the K Street Mall.

"I will be honest; he has made some reinvestments over time," said Leslie Fritzsche, the city's downtown development manager, said of Mohanna's buildings on the K Street Mall. "That doesn't negate the fact that over the past decade they have had vacancy rates of between 48 percent and more than 70 percent. He can't keep tenants. They come and go.

"We want quality destination retail in the 700 block of K Street, and a collective mass of stores so people feel like, 'I'm going to K Street. I'm going to the 700 block so I can shop.'"

City leaders think they've found the plan they're looking for in the proposal by Z Gallerie owner Joe Zeiden to rehabilitate the historic buildings in the 700 block of K Street into a retail row that includes big name tenants such as Sur La Table and Urban Outfitters.

"We're looking for more than a coat of paint and putting a tenant in the existing space," said Assistant City Manager John Dangberg. "We're looking for a major renovation of the buildings, both seismically and a reconfiguring of the space. Some of these (buildings) are 20 feet wide, and they're not going to lend themselves to the kind of retail we're trying to attract."

In 2006, with the city already making threatening noises in his direction, Mohanna agreed to a complicated land swap in which he and his partners would wind up controlling much of the 800 block between K and L streets, and Zeiden would get control of Mohanna's properties in the 700 block.

The city has helped Zeiden by spending about $24 million to buy properties in the 700 and 800 blocks of K and L streets. Mohanna has not received a subsidy.

Mohanna joined forces with developer John Saca in a plan to build retail on the ground floor of the block and high-rise housing above. Saca later pulled out of the partnership.

Then, late last year, a fire burned neighboring buildings owned by Zeiden and Mohanna in the 800 block. The city ordered most of the rest of the buildings in the block demolished as well, saying they were structurally unsound.

At that point, Mohanna refused to go through with the land swap.

About the writer:

• Call The Bee's Mary Lynne Vellinga, (916) 321-1094.