JOSE LUIS VILLEGAS jvillegas@sacbee.com
The interior of Golden 1 Center takes shape as its opening nears.

New arena? Check. Now where’s the rest of that promised downtown development?


 
 
August 22, 2016 6:00 AM

Sacramento city leaders justified contributing roughly a quarter of a billion dollars to the new downtown arena on the promise that it would serve as the defibrillator to a sluggish downtown. It may end up doing just that, but it’s going to take time.

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Transformation of downtown Sacramento will take some time

Some development projects in the urban core are well underway, while others seem years away.

Ryan Lillis The Sacramento Bee

With just weeks to go before the opening of Golden 1 Center, a Sacramento Bee review of critical downtown redevelopment sites shows there’s a packed pipeline of major projects in the planning or construction stages.

Some are well on their way toward completion, most notably the transformation of the 700 block of K Street into a strip of apartments and restaurants. Others remain on the drawing board or in limbo while owners and developers look for money or wait for the right moment to make their move.

City officials say they are pleased with the progress, even as they work behind the scenes to encourage property owners to push plans forward.

“We are seeing a lot of momentum, but it still takes time for markets like Sacramento to mature,” said John Dangberg, the Sacramento city official who oversaw the arena deal.

Here’s an update on the most pivotal development projects near Golden 1 Center – and where they fit into Sacramento’s goal of redefining its urban core.

The downtown railyard

The city has been pushing for 25 years to expand downtown onto this massive former industrial site. The 244-acre railyard, they say, has more potential to redefine downtown than any other site.

The prognosis looks good. The land has been scrubbed of most of the toxic contamination that made it a Superfund site. A strong local development group has taken control, led by Larry Kelley, the man who turned the former McClellan Air Force base into an industrial park. And this week, the city will open two new streets on bridges over the rail lines, finally linking the old train yard to the downtown grid.

What now? Kelley’s group says the first housing should be built in 2018. Ultimately, an estimated 20,000 people may live there, more than currently live in Land Park and Curtis Park together. But that will take time, perhaps two decades.

Other big projects planned for the railyard could also take years to materialize. A 20,000-seat soccer stadium may be built there as early as 2018 or 2019. Kaiser Permanente plans a major medical campus with a 14-story hospital, but has said it is six to nine years away. The state intends to construct a new Superior Court building on site, but has not committed to a time frame.

Shorter-term, the city of Sacramento this winter will finish a $34 million rehabilitation of the block-long train station at the front end of the railyard, and has begun soliciting retail and office tenants to jointly use the building along with Amtrak.

 
D&S Development, CFY Development
The 700 block of K Street will feature new construction behind historic facades.

700 block of K Street

This block, in the shadow of the arena, is in the middle of a dramatic transformation. Developers Bay Miry and Ali Youssefi are partnering on a $55 million urban hive of shops and restaurants, topped with 137 apartments.

The project has an expected late-2017 finish date. City officials say it is a trailblazer for Sacramento’s aspirations of turning the core downtown into a true live-work community. It will plant an estimated 200-plus residents onto what had been a blighted and foreboding stretch of K Street.

The development, called “700 Block,” hasn’t come easy. Conceived long before the arena landed next door, it was supposed to break ground in 2011, but financing and bureaucratic woes stalled those plans until recently. Now, with the arena about to open, the timing looks good.

 
CIM Group
If built, 301 Capitol Mall would be the second-tallest building in Sacramento.

301 Capitol Mall

Perhaps no project represents the promise — and the frustration — associated with downtown’s future more than this one.

This is the site of the infamous “hole in the ground” at the corner of Third Street and Capitol Mall. At the height of the mid-2000s building boom, developer John Saca began work on twin 53-story condo towers, only to see the project scrapped in 2006 after his financial backer, the California Public Employees’ Retirement Fund, declined to put in more money.

The entire block at the entrance to Capitol Mall has since remained empty, surrounded by a tall fence.

Earlier this year, development firm CIM said it had a plan to erect a 30-story, 420-foot tower that would be the city’s second-tallest building. The Los Angeles developer is partnering with property owner CalPERS on the project and appears to be moving at a cautious pace, saying it is seeking office tenants before committing to an exact size. Construction won’t start until 2018, but downtown officials are confident the tower will be built.

It appears CIM remains serious about its plans. Bill Mendel, a company spokesman, said “CIM continues in its effort to secure an anchor tenant” for the high-rise and “the project is ongoing.”

601 Capitol Mall

Unlike its neighbor down the street, this is not a hole in the ground — it’s a parking lot next to the U.S. Bank tower. But it too represents a notable empty spot on the region’s most prestigious boulevard. A proposal for a condominium tower designed by famed New York architect Daniel Libeskind died a decade ago during the recession.

The site is co-owned by David Taylor, a downtown developer known for quality but also for caution, willing to pull the trigger only when the timing is right. The site has city entitlements for up to 300 residential units or 500 hotel rooms. It’s uncertain when the downtown market would be ready for a project of that size.

The site’s location is as good as it gets downtown. While its address is Capitol Mall, it also fronts a half-block of L Street directly across the street from Golden 1 Center.

“Patience is a good thing for a site like that,” Dangberg said. “You need to wait for the right market and the right project. The city would like to see something pretty spectacular go in there.”

Eighth and K streets

Speaking of holes in the ground, this is the streetcorner where a building collapsed during a storm in 2003 and others were gutted by fire three years later. Councilman Steve Hansen once called the corner “a wart on the butt of downtown.” And it’s two blocks from a main entrance to the Golden 1 Center, meaning thousands of arena patrons will walk by it on their way to events.

Proposals have surfaced and died for years at the site, a grouping of nine parcels that extends to L Street.

In December 2015, development firms D&S and CFY began negotiating with the city to buy the parcels. D&S put together plans for a large luxury apartment tower at Eighth and K, while CFY had its focus on adding apartments near Eighth and L.

But hours before it was set to expire, the Sacramento Kings executed their right of first refusal over the parcels, maintaining control of the site. The rights were given to the Kings by the city as part of the public’s contribution to Golden 1 Center.

Downtown insiders say the city and the Kings are close to finalizing an agreement for a development plan that could start with building housing on L Street. There are also rumors the Kings may build a large apartment building — in the neighborhood of 180 units — in the hole at Eighth and K.

 
Saca Development
Developer John Saca has proposed a 41-story hotel and condo tower.

The Metropolitan

John Saca’s grand plans for towers on Capitol Mall fell apart years ago. But he still owns several parcels of land near the corner of 10th and J streets, on a block where most of the buildings are empty or decrepit. His holdings sit just a block from City Hall on one of downtown’s busiest corridors.

Saca proposes to transform the block with a high-rise project reminiscent of the condo/hotel towers he once planned for Capitol Mall. The Metropolitan would top out at 41 stories, with 190 high-end hotel rooms, 190 condos and retail on the ground floor. Saca paid $600,000 to buy a city-owned building on 10th Street in 2014 — the last parcel he needed for his project — and last year he demolished two buildings near the corner that had been damaged by fire.

City officials have quietly expressed frustration that nothing has been built at the site. But Saca said it’s a matter of economics — and timing. He said he hoped to build the project “in the near future” and was encouraged by the arrival of the arena and improvement in the housing market.

“Our desire is to build the project as soon as the project is financially feasible,” he said. “For that to happen, for a project of this magnitude, we need the hotel average-daily-room-rates to increase and housing in the Sacramento region to get stronger.”

1000 block of J

Across J Street from Saca’s Metropolitan site, a row of squat, obsolete buildings has sat vacant for years, presenting an unsightly still life of Sacramento circa 1950, and perturbing officials at City Hall two blocks away across Chavez Plaza.

The current local ownership group has city approval to tear down the buildings on four parcels at the corner of 11th and J streets and construct a 25-story residential high-rise tower called Cathedral Square. But the group, which includes St. Anton Partners, has the site on the market and is looking for a buyer.

“The owners are patient,” broker Greg Levi said. “Redevelopment downtown never seems to move fast.”

 
HRGA Architecture
The proposed Hyatt Centric boutique hotel would incorporate the facade of the existing Hotel Marshall.

Hotel Marshall

You can’t get much closer to Golden 1 Center than the former Hotel Marshall and Jade Apartments.

The buildings stand on Seventh Street, mere feet from the Kings’ practice facility adjacent to the arena. The Marshall closed two years ago. Except for one week in February when the Jade Apartments were transformed into a temporary art installation, the complex has been empty ever since.

Developer Peter Noack said he and his partners are negotiating with lenders as they seek financing to turn the decrepit buildings into a Hyatt Centric, the boutique line of hotels run by the international chain. He hopes to start construction early next year and finish in mid- to late-2018.

Documents submitted to the city of Sacramento show the hotel would stand 11 stories and 130 feet — roughly the same height as Golden 1 Center.

Noack said the hotel won’t be “cookie cutter” and will likely include elements that pay homage to the Clayton Club, a jazz and blues club once housed in the Marshall. And with thousands of patrons attending events at Golden 1 Center next door, Noack said the Hyatt Centric will address a big downtown need.

“There hasn’t been a new hotel built downtown in years,” he said. “The market is good, the market is strong and we’ll compliment the Kimpton (hotel being build by the Kings on J Street) well.”

 
HRGA Architecture
An architect’s drawing from early 2016 shows the concept of a restaurant and retail center, bordered by a new five-story parking garage, at the corner of Seventh and L streets in downtown Sacramento.

Old Greyhound station

Downtown officials celebrated when Greyhound moved its bus station from the corner of Seventh and L streets to Richards Boulevard in the River District. The station, those officials said, had become a magnet for the kind of element downtown was trying to get rid of.

But Greyhound’s old digs on L Street have remained largely untouched since the station moved in 2011. There doesn’t appear to be a lot of momentum toward changing that.

Building owner Danny Benvenuti filed an application with the city in March saying he intended to turn the old bus depot lobby into a restaurant and shops, and construct a five-level parking garage next door. The application is on hold, and Benvenuti said in an email that he thinks “by December we will have some firm plans on how everything is shaping up.”

The Bridge District

Drive over the Pioneer Bridge into West Sacramento and you witness a new city taking form.

Condo buildings are rising near the banks of the Sacramento River, replacing fields that had been empty for years. The Bridge District is to one day be home to 9,000 people, all living closer to Golden 1 Center than most midtown Sacramento residents.

Another condo building is under construction, and The Barn — a funky outdoor gathering spot and entertainment venue — opened last month. More eateries and entertainment spots are planned as the neighborhood grows around Raley Field.

“The combination of The Bridge District, plus the arena, has shifted the center of gravity of downtown itself to the west and given it a bigger footprint,” said West Sacramento Mayor Christopher Cabaldon. “The major gaps in the urban core are closing.”

 
Heller Pacific
The Ice Blocks project, currently under construction, spans several blocks on R Street.

Ice Blocks

Like the Bridge District, this project is outside the official boundary of downtown. But it’s one of the more significant projects on the grid and has been the site of steady progress in recent weeks.

Construction crews are putting together the third floor of a mixed-use building on R Street between 17th and 18th streets; that building will eventually house apartments and restaurants. Across R Street, the site of the former Orchard Supply Hardware is taking new form and will be turned into restaurants and shops.

On the block bordering 16th Street, developers intend to build up to 100,631 square feet of offices — including the new corporate office for the Sacramento Republic FC soccer team. Restaurants and shops are also in the plans.

 
Vanir Development
The 26-story proposal would be one of the highest office towers in the city.

601 J

Vanir Development, a locally based construction company with national reach, wants to make this site its headquarters — and more. At 26 stories, it would be one of the tallest office towers in the city, its higher floors overlooking the arena a block to the south. The building could serve as regional headquarters for an unnamed west coast bank, giving it a touch of the corporate heft that Sacramento has long lacked.

If built, the structure would represent one step among many needed to modernize the shabby and often lifeless J Street corridor downtown.

The project application, first filed in 2014, has not moved forward, however. City officials say the company is fine-tuning its designs for city review. That means construction, at the earliest, could be two years away.

501 J

Kaiser Permanente is staking a huge claim in downtown. In addition to its plan for a major medical center in the railyard and a sports clinic inside the arena, the healthcare company is hard at work on a $40 million remodel of a six-story office building at Fifth and J streets, across the street from one of the main entrances to the arena plaza.

Kaiser bought the 200,000-square-foot building in 2014, after the arena deal was announced, to be used for medical offices that will house an estimated 700 employees. The facility, which could include primary care services, a lab, pharmacy and radiology services, is scheduled to open in 2018.

Like the Vanir Tower site next store, the redeveloped office building will bring life to a section of J Street that serves as one of the main entrances to downtown from Interstate 5 ramps.

“Kaiser Permanente is committed to the Sacramento community, and we are pleased to be part of the revitalization of downtown by bringing a new convenient care location to this area,” the company said after purchasing the site.

 
RANDY PENCH Sacramento Bee file, 2015
Only a small portion of the Township 9 project has been completed.

Township 9

The developers of this densely planned project on Richards Boulevard north of downtown deserve an award for perseverance. Launched a decade ago with demolition of an old cannery, the sprawling, 65-acre site today has an impressive new light-rail station, an as-yet unopened riverfront park, a grid of newly laid streets and one affordable housing complex — but is otherwise empty.

The vision remains ambitious: 2,200 apartments, townhouses and condominiums with offices and retail. Developers say they hope to begin building 72 townhouses late this year or early next year. But building costs have gone up, making construction financing and unit pricing an ongoing struggle.

“The good news for a downtown like ours, rents and sales prices are strong,” said partnership representative Al Esquivel.

If built as planned, it will offer residents something unique: downtown living with a light rail station at the front door, and a bike trail and American River panoramas at the back door.

Esquivel says the project could be fully built in 10 years.

Sacramento Commons

This controversial housing project represents a tug of war between old and new. The site is a combination of four blocks bounded by N and P, Fifth and Seventh streets, and is today a stately, leafy enclave of residential towers and low-rise apartments with spacious walkways.

A Southern California developer has obtained city approval to tear down a few of the buildings and add a net 1,300 residences and some retail spaces, packing the site more tightly, making it more urban.

The developer, however, has notified local officials it plans to sit tight for awhile, and has offered no time frame for when work might start.