Can R Street become downtown Sacramento's first true art and culture corridor? That's the idea being promoted by an experienced local developer.

CFY Development, which transformed the Globe Mills feed and flour mill in Alkali Flat into apartments, now proposes rehabilitating a vacant six-story warehouse at 11th and R streets as a complex where artists can live, work, hang out, and display and sell their work.

If successful, the project could be a magnet bringing entrepreneurs and creative businesses to the surrounding blocks, CFY officials say.

The idea has won the endorsement of the head of the Sacramento Metropolitan Arts Commission.

"It's my personal ambition to see a cultural corridor develop there," arts commission executive director Rhyena Halpern said.

The head of the Capitol Area Development Authority (CADA), which owns the warehouse, said she's excited about the possibility.

"We think R Street is a perfect place for … an artist community," Jacqueline Whitelam said.

The CADA board has not yet formally approved the concept. It is scheduled to view details in March.

The R Street area, once bustling with warehouses and served by rail lines, has seen the beginnings of a renaissance in recent years with the addition of a small lofts project, some restaurants, bars and a nightclub.

CADA has repaved the street and sidewalks for several blocks, and this month installed an R Street District arch spanning the street next to a sculpture of a fox and a goose in front of the Fox & Goose Public House.

Despite a decade of trying, however, the agency has not been able to get a housing project going at what officials say should be the corridor's catalyst site between 11th and 12th streets – a site dominated by a towering brick warehouse that once stored Model T cars.

CADA's attempts to redevelop the warehouse have repeatedly stalled.

Plans for a loft condominium project were under way, but the region's condo market vanished before CADA and its private development partners could put financing together.

The CFY group agreed last month to take the lead as private developer for the site, joining Holliday Development from the Bay Area, which has been working for years on plans to rehab the warehouse.

CFY's Ali Youssefi said the project could include 120 apartment units and 25,000 square feet of retail space.

Some apartments would rent for below-market rates, and others would be market rate, he said. The project could include artists' work areas, an art gallery, and offices for arts organizations.

Youssefi said the development team hopes to win federal tax credits for the project this spring. If that happens, and CADA gives its OK, construction could start by the end of the year, and a first phase could open in 2014.

"It's a concept I've wanted to bring to the downtown for a long time," Youssefi said. "Artists spur economic development."

The price tag for the project: an estimated $40 million. A previous version of the project was awarded a $5 million grant by the state Housing and Community Development Department to help finance below-market units. Youssefi said the new partnership group expects to retain that state funding.

Holliday owes $2.3 million on a CADA loan that was due in October. CADA officials have agreed to hold off on enforcing the obligation until March, to see if CFY and Holliday can pull the project together.

CADA board member Ron Alvarado expressed hope Friday that the historic warehouse will finally be reborn as housing.

"This is kind of a rebirth," he said. "Hopefully, the stars will align."

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