Sacramento’s Tower Theatre, an art deco treasure and the city’s go-to spot for foreign and independent films, has been sold to an endowment fund that apparently plans to upgrade the property and keep it operating indefinitely as a movie house.
Officials said Friday that the theater and related operations, including the spaces occupied by Tower Cafe and Joe Marty’s Bar & Grille, were sold for $5.02 million by descendents of Joseph Blumenfeld, who opened the Tower in late 1938 at the site of a onetime city dump.
“It’s one of the few iconic pieces of real estate that was still owned by the family that built it,” said Ken Turton, the Sacramento broker who represented the Blumenfelds in the sale. “There are not too many of those out there.”
Turton identified the buyer as the Endowment Board, a Stockton-based organization that provides funding for retired clergy from the Methodist Church.
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He said the buyer plans to hold the property as a long-term investment and keep it functioning as a theater.
“That was a big part of it for the family – that whoever bought it would be a good steward for the property and they felt comfortable (the Endowment Board) would be that,” he said.
“This is a piece of property we don’t want to see go away,” he added. “We all remember what happened to the Alhambra Theatre and now we don’t have to worry about that happening here.”
The Alhambra, one of the city’s most ornate theaters, was razed in 1973 – an action that many regard as perhaps the biggest loss of a local historic landmark.
The Tower complex briefly went on the market in 2010 but no deal was made, partly because of the long-term, below-market-rate lease held by current theater operator Reading International, Turton said.
That lease runs until 2024, but the new buyers apparently were willing to wait it out in hopes of better rental returns down the road, the broker said.
Turton, head of Turton Commercial Real Estate, called the transaction “one of the most difficult of my career” because he was representing eight sellers, all with different opinions about the sale and each of whom had the right to terminate the deal.
Complicating the decision to sell were the emotional ties of the sellers to the property, he said.
“There were multiple times when one of the partners would (talk about) meeting dad or grandpa at the property,” he said.
Ultimately, he said, all eight of the sellers agreed it was in their best interests to turn the complex over to new owners, he said.
He credited property managers, attorneys and the buyer’s broker, Bryan Wirt of TRI Commercial, for taking the deal through a process that began with a contract signing last fall and an escrow that started near the start of the year.
Cory Parish, executive director of the Endowment Board, said in an interview that his group only plans “minor” immediate improvements at the property but will be looking to upgrade parking and landscaping over the next three to five years.
He described the acquisition as a long-term investment aimed at generating stable returns for the fund’s targeted beneficiaries.
“Because we are an endowment, we will be able to own and manage this property for decades if not centuries,” he said.
A news release issued by the buyer group added that the Endowment Board is glad to be part of the “renaissance” happening along the Broadway corridor.
“The buzz and excitement of businesses returning to the original hub of Sacramento commerce is contagious,” Parish said in the news release, “and we are privileged to carry on the Tower Broadway’s exemplary legacy for years to come.”
The theater, with its 100-foot neon tower, is regarded as the key landmark along Broadway, at the entry point to the upscale Land Park neighborhood. But patrons have complained over the years that its technology was outdated and its interior often neglected.
Reading, which runs art house and mainstream theaters across the country, started addressing those concerns with the installation of new digital projectors in 2012 and new seating has been added since then.
The company has an application pending to begin serving beer and wine in the theater, joining a growing number of movie house operators that have begun alcohol sales.
Tower Cafe, which adjoins the theater, is one of the region’s most popular restaurants, and has a market-rate long-term lease, Turton said.
Cafe owner Jim Seyman said Friday that he was very pleased to have the property in local hands rather than controlled by absentee owners who he said were reluctant to make repairs or reimburse him for the work he did.
The new owners, he said, “are decent, respectful people ... who are in it for the long haul, not just to make some money or flip it when it becomes more profitable.”
Devon Atlee, owner of the Joe Marty’s operation on Broadway that reopened in December, also said the new ownership group is likely to accelerate improvements needed in common areas, including the parking lot and along Broadway.
“They’re just going to make the property pop more, as it should because it’s such a historic landmark,” he said.
He added that the ownership group is committed to keeping the complex in its current format, as a destination location for the region’s filmgoers and diners.
“That’s exciting for the tenants, for Joe Marty’s and for the neighborhood,” he said.