Pyramid Alehouse – a pioneer on downtown Sacramento's K Street when it opened 10 years ago – suddenly closed its doors Monday.

But city and business leaders said that could be a good sign for K Street.

While the closure of the alehouse caught some City Hall officials and beer enthusiasts off guard, downtown business interests and others said it showed that K Street has finally become a more competitive and attractive district.

The 1000 block of K Street – where Pyramid has stood since 2003 on the site of the former Ransohoff's department store – has seen particular progress over the past two years, with vibrant nightclubs, restaurants and a karaoke haunt drawing large crowds to a once-drab stretch.

"(Pyramid) couldn't compete," said Councilman Steve Hansen, who represents downtown. "They weren't offering as good a product as their neighbors, and they fell out of favor. This isn't a body blow, this is a good opportunity."

Customers had packed the brewhouse over the weekend, only to be greeted by a sign on the front door Monday announcing the establishment's closure. While no further details were provided on the sign, a Pyramid representative said in a statement that "business has declined due to economic, social and competitive factors affecting downtown businesses in the area."

"We want to thank all of our Sacramento employees for their hard work and years of service, and the Sacramento community for their patronage," said Glenn Hancock.

Valerie Mamone-Werder, the business recruiter for the Downtown Sacramento Partnership, said the partnership had been hearing for months that Pyramid might close. In anticipation of that news, Mamone-Werder said, she had spoken to several business owners – including a local independent brewer and an alehouse chain operator – who are interested in the site.

"It certainly seems to be popular," she said. "I don't think the falling-out of Pyramid had anything to do with the location."

Mike Costello, owner of the former Brew It Up restaurant downtown, said he was not one of the brewers who had spoken with the Downtown Partnership. However, having heard about Pyramid's closure Monday, he said he was interested in the site as a potential restaurant location.

"I think K Street is doing really well, and an independent operator who brings a higher level of authenticity, local sourcing and local craft brews could do just fine there," said Costello, whose restaurant at 14th and H streets closed in 2011.

Beer enthusiasts were surprised and saddened by Monday's news about Pyramid, which came a day after the popular Sacramento Beer Week festivities concluded.

"I can't believe they're closed. We were just here," said Amanda Smith, 24, who had visited Pyramid over the weekend for a Beer Week event. "We had a great time. It looked like it was really doing well, with people partying and just having a good time. And now it's gone."

The downtown lunch crowd was also surprised.

Scott Plotkin, a Sacramento retiree, was standing out front of the pub around noon Monday, bemused and shaking his head.

"I'm meeting a friend of mine here for lunch, and when he gets here I guess we're going to have to find someplace else," Plotkin said. "I was very surprised. I've been in (the pub) many times, and it was always crowded."

However, Plotkin's friend, Jeff Frost, said he noticed declining lunchtime crowds at the Pyramid Alehouse and other restaurants near the Capitol, dating back to the time of state worker furloughs amid California's budget struggles.

"It's been declining for some time; some of the places are maybe half-full," Frost said.

The stretch of K Street from 10th Street east to the Sacramento Convention Center – has been the epicenter of activity. Still, the former pedestrian mall has large swaths of vacant lots and dreary passages.

Work has been slow to start on massive redevelopment projects planned for the 700 and 800 blocks, the two blocks closest to the Downtown Plaza. The projects have been stalled by the sluggish economy and the state's decision to cut off redevelopment subsidies.

A music venue, bars, restaurants and 137 apartments are planned for the 700 block. The developer of that project said recently that he aims to begin work this summer.

Call The Bee's Ryan Lillis, (916) 321-1085. Read his City Beat blog at sacbee.com/citybeat. Follow him on Twitter @ryan_lillis.

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