LEZLIE STERLING / Bee file, 2011

This R Street warehouse and a new building next door will become the Warehouse Artists Lofts, a $42 million housing project that also will include retail shops, offices and restaurants.

Construction finally begins on R Street mixed-use project catering to artists

Published: Thursday, Feb. 14, 2013 - 12:00 am | Page 1B
Last Modified: Thursday, Feb. 14, 2013 - 8:41 am

After 15 years of false starts, construction begins this week on what officials say will be a transformative housing project featuring live-work space for artists a few blocks from the state Capitol.

It's called the "The Wal" – short for Warehouse Artists Lofts – a mix of apartments, retail shops, restaurants and offices packed into two six-story buildings on R Street between 11th and 12th streets.

The dense urban concept is part of a years-long effort to turn the former industrial corridor into an arts and culture neighborhood.

"I think there is cool energy developing on R Street," said Ali Youssefi of CFY Development, the project leader. "It's our intention to add to that."

CFY, which turned the former Globe Mills plant in Alkali Flat into apartments, will team with Holliday Development of the Bay Area and the Capital Area Development Authority, or CADA, to rehabilitate a warehouse and couple it with a new building next door.

The two structures will house more than 150 residents in 116 apartments, featuring arts-related stores on the ground floor and a restaurant with outdoor seating at the 11th Street corner, to be run by the owners of Burgers & Brew.

The warehouse would feature rooftop barbecues, picnic areas, a community garden and a children's play area.

"The views of downtown are pretty cool," Youssefi said. "I think we should have rooftop uses on almost any building downtown."

The $42 million project was stymied for years due to financing issues and the recent housing downturn. It came together last year after CADA joined with CFY to win $18 million in federal tax credits. Another $5 million in funding comes from the state Department of Housing and Community Development.

About 75 percent of the 116 units will be rented at below market rate, the rest at market rate. Monthly rents are expected to range from $350 to $1,100.

A Sacramento Metropolitan Arts Commission study, commissioned by the developers, found that a large number of artists, musicians, dancers and others say they'd be interested in living there.

"Artists are looking for living spaces that are affordable and that have space to do their art," arts commission head Shelly Willis said. "There is a need in our community for this."

The project's heart and soul is a historic brick warehouse that once stored Model T cars. The building next door will be of like design, with lofts and two levels of hidden parking.

CADA official Todd Leon said the project, expected to open in late 2014, already is helping generate more entrepreneurial interest on R Street. He said he's taken recent calls from groups looking for sites to open beer breweries.

The corridor already has a theater, a Safeway-anchored retail center, and a mini entertainment district between 14th and 15th streets, featuring restaurants, bars, nightclubs and living lofts.

Developers plan to add to the street's offerings soon by turning a former state office building at 15th and R streets into restaurant and retail space. To the west, the Fox and Goose restaurant and adjacent properties have seen recent upgrades.

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