A San Francisco investment company takes ownership of Downtown Plaza today, concluding more than a year of quiet negotiations and instantly buoying hopes for a renaissance at the struggling mall.
Tuesday's transfer of six crucial retail blocks in the heart of Sacramento from mall giant Westfield Group to JMA Ventures is being hailed by city officials as an opportunity to inject new life into the declining shopping center and the area around it.
Both parties confirmed the sale. The price was not disclosed.
JMA President Todd Chapman said his company has not determined what long-term changes need to be made to the 20-year-old mall, which is peppered with vacant storefronts. But he said his company will make some moves as soon as today to create a more comfortable shopping environment.
"We do have an intensity to how we do business, and we are going to jump in here running," Chapman said. "It's important for us to make a good impression in the community."
JMA, founded in 1986 by Chapman's father, Art, has grown in the last decade from a small, family-owned boutique business into a company with a range of high-profile, upscale investments, most of them in San Francisco and Tahoe.
It owns Homewood Mountain Resort in Tahoe, where it plans a major expansion, and has a share of the combined Squaw Valley-Alpine Meadows ski resort. It recently bought and is marketing million-dollar-plus homes on the ski slopes at Northstar in Tahoe, and owns an exclusive time-share residence hotel at Ghirardelli Square in San Francisco. It teamed with investors a few years ago to build a bayfront restaurant, EPIC Roasthouse, in San Francisco. In the last two months, it has bought office buildings in Austin, Texas, and outside of Seattle.
JMA has run into troubles, too. During the recession, it lost control of the retail portion of Ghirardelli Square to its lender on a technical loan default.
Speaking to The Bee Tuesday at a suite in the Citizen Hotel downtown, Chapman called JMA's new Sacramento property a long-term investment, and said it will be one of his personal priorities. The company's initial focus, he said, will be to make Downtown Plaza a place "more comfortable, family-friendly, that emphasizes security and cleanliness. Those things you are going to see from Day One."
JMA and its equity partners have set aside funds to make later improvements, Chapman said, but how much they spend depends on management decisions that have yet to be made. He declined to name JMA's financial partners.
"It is a big property, and we are prepared to make the right investments that we think are going to benefit the project," he said.
He said his company will sit down with its tenants, as well as City Hall officials, the Downtown Sacramento Partnership and other downtown interests to get a feel for what they believe would work at the site. Chapman said JMA's goal is to mix locally owned businesses with national companies, and not duplicate offerings at suburban shopping malls.
"There is just an embedded opportunity to create a dynamic urban core to build on some of the successes that have already happened on K Street," Chapman said.
Mayor Kevin Johnson and some city officials have said they would like to the see the mall essentially turned inside out so that it connects better with the city on J and L streets. They also have talked about rebuilding Fourth and Fifth streets through the mall and possibly allowing cars back on K Street in the plaza.
As Downtown Plaza declined in recent years, Mayor Johnson publicly challenged Westfield to invest in the mall or sell it.
Johnson issued an emailed statement Tuesday cheering the sale. "This is a game-changer a long time in the making," he said. "We are thrilled by JMA's commitment to Sacramento's future and stand ready to collaborate with them to create jobs, boost our economy, and revitalize downtown."
The sale, however, prompts questions.
Westfield, a huge international shopping center owner and builder, struggled to make the plaza work during the recession. Will JMA Ventures, a company with about three dozen employees and a modest retail résumé, be able to do better?
With the demise of redevelopment districts in California, the city of Sacramento likely no longer has the wherewithal to help the new mall owner in any substantial financial way.
Sacramento developer Michael Heller said the new owner will need to be well- financed, patient and creative, and have good contacts in the retail world. Michael Ault, head of the Downtown Sacramento Partnership, cited the energy and creativity JMA brings to the table.
Downtown restaurateur Randy Paragary said he has a good impression of JMA from dealing with them on a past project, calling the company "hands-on."
"They were just a class act, as far as their approach to that project," Paragary said.
Chapman said the fact that his company is smaller and doesn't run other large shopping centers could help it make the right moves.
"We are also able to take a fresh perspective in what we do," he said. "We don't get bogged down in (thinking) 'this is the way we always do it.' "
Chapman said he has talked with officials at Macy's, the independently run anchor of the downtown mall, and said his company is assured of their interest in cooperating with JMA.
Westfield, which continues to own the Roseville Galleria, issued a brief statement.
"The transaction is in keeping with Westfield's announced strategy of divesting non-core assets in the U.S.," Westfield said in an email. "We wish JMA well in its ownership and management of the center."