Business & Real Estate

Moving on: Downtown Plaza’s small retailers scatter ahead of the wrecking ball

After 17 years, the popcorn lady is rolling out. ZEE Jewelers is moving to another mall in Fairfield. And All Star Sports is closing for good, putting all its football, hockey and basketball team gear on sale, as well as the store’s fixtures.

At Downtown Plaza’s eastern end, where demolition for a new Sacramento Kings arena is expected to start as early as June, the exodus of stores that lie in the path of the wrecking ball is well underway. The vacant storefronts are almost as ubiquitous as the “Storewide Clearance” and “Everything Must Go!” signs in the windows of remaining retailers.

“It’s forced me into a decision: I’m going to retire,” said Darlene Myers, 74, a widow who’s operated her American Popcorn Co. wagon seven days a week for almost 20 years. Selling sodas and bags of cheddar, caramel and kettle corn, she’s made a “decent living” from her tiny business, run from a red wagon-wheeled cart constructed by her late husband.

“Do you know anybody who wants to buy it?” she said.

Downtown Plaza, purchased for $22 million in summer 2012 by San Francisco-based JMA Ventures, has been bleeding stores and profits for years. It was sold off by the Westfield Group, which owns Roseville’s Galleria, after various redevelopment ideas for the site fizzled. JMA recently sold the mall to the new Kings ownership group for $36 million, according to court records. The Kings are building a $448 million NBA arena and entertainment venue, which will be owned by the city. They’re also working with JMA to develop a surrounding mix of retail, housing and hotels. The arena is scheduled to open in 2016.

Roughly two-thirds of the aging mall is set to be jackhammered into oblivion starting this summer. Construction fencing marking off the arena site’s boundaries – roughly between J and L streets, from Fifth to Seventh streets – could go up in a matter of months. Most of the scattered tenants still open in Downtown Plaza’s eastern edge are expected to be gone by late April.

Workers are pulling out the existing information kiosks and moving them to the Macy’s end of the mall. Golden One Credit Union is informing customers that its Downtown Plaza bank branch and three ATMs will close on April 25.

On the opposite, western end of the mall – home to Macy’s, Forever 21, River City Brewing Co. and the upstairs Century movie theater complex – it’s mostly business as usual. That end of the mall isn’t part of the arena development plan. The mall has hung banners proclaiming “Open During Anticipation,” listing some of the stores expected to remain during construction.

For those being uprooted, it’s the end of an era. ZEE Jewelers, which also manages a nearby Diamond Treasures store and an outdoor kiosk selling silver jewelry, is relocating to Fairfield’s Solano Town Center. Over the last eight years at Downtown Plaza, “business has been good,” said district manager Aashi Kabani, as a single customer browsed the diamond earrings that are discounted up to 75 percent off. “We wanted to stay, but there’s no choice.”

By late April, all of the store’s remaining merchandise will be sent to the Fairfield location. The eight employees of the jeweler’s three Downtown Plaza outlets have been offered positions at the chain’s stores in Stockton, Fresno, Modesto and San Rafael, she said.

Just a few hundred yards down the mall, All Star Sports is throwing in the towel. The business, opened about three years ago, sells sports team clothing and gear but expects to shut down later this month. “We’re almost dead here. We’d like to get a shop (near) the arena, but we’d have to wait two to three years,” said Ansar Mohammed Abdul, who works behind the counter for the store’s owner, his brother-in-law. With “Everything Must Goooo!” signs in the window, All Star Sports is selling team hoodies and other goods for up to 50 percent off.

The exact number of retailers who are being forced to move – and when – wasn’t available from JMA or the Kings. “We have been engaged in discussions with each of our tenants for the last several weeks, discussing their immediate and long term interests,” said Kings President Chris Granger. “We are in the process of relocations, tenant improvements and lease terminations, based on our mutual goals and interests.” He added that announcements about new retail, restaurant and hotel partnerships will be announced in coming weeks.

‘We’re here’

Tenants at the western end of Downtown Plaza, while they won’t be affected by the construction, still face uncertainty. River City Brewing has occupied its brewery and restaurant in the mall for 20 years. Co-owner Beth Ayres-Biro said she’s been told the current lease is good through December, but after that it’s a big question mark.

“We’ve weathered so many landlords telling us ‘Stay. Don’t move. Something great is going to happen,’ ” she said, during a busy lunch hour last week. “We want to stay but we’re keeping our eyes and ears open, in case something bad happens.”

Shoppers strolling the mall on a recent weekday morning had mixed reactions to all the changes afoot. “It’s really good because anything is better that what the mall is now. It’s kind of a depressing place,” said Megan Varvais, 32, who works for a consumer nonprofit in downtown Sacramento. “I’m not an NBA fan, but I think the arena and the shops will be a definite improvement.”

Susan Lopez, 37, a downtown banquet worker, said she’s sorry to see the mall uprooted. “I am not excited about it,” said the Broderick resident, who said she likes coming to Downtown Plaza for beer and movies. “I don’t see any reason to take it down. We’ve got a perfectly good arena in Natomas.”

JMA Ventures and the Kings ownership group have created extensive plans for handling pedestrian access and traffic patterns during the two-year construction. The Fifth Street traffic tunnel below K Street is expected to stay open during most of the two-year construction period. Pedestrian access will be rerouted around the construction site.

River City Brewing, for one, is counting on hundreds of thirsty, hungry construction workers pouring daily onto the property. With at least six daily brews on tap, “They’ll need a place for lunch and a place to drink beer after work,” said co-owner Ayres-Biro. “We’re here.”

‘A game changer’

City and business leaders say they expect the remaking of Downtown Plaza to spur additional investment in the surrounding blocks, now marred by empty storefronts, threadbare businesses and missing buildings.

Already, after years of getting a cold shoulder from prospective developers, nearby property owners and downtown promoters say they’re seeing a marked change. “Five years ago, we couldn’t get anyone to return our calls. Now they’re here, kicking the tires,” said Michael Ault, executive director of the Sacramento Downtown Partnership. He said restaurants, entertainment venues and investment groups representing various retail concepts have contacted his office, saying: “We’re looking to come in.”

As an example, Ault cited a San Diego developer of mixed-used apartment complexes for young, urban dwellers near Petco Park’s baseball complex who is now interested in doing a similar project near the Kings’ new home.

The arena has been “a game changer in getting people to say ‘Maybe I should look at Sacramento,’ ” Ault said. For parcels even five to six blocks away, he said, brokers are calling to ask about pedestrian traffic counts, vacancy rates, public transit options and parking garage usage.

Ault is careful to add that the goal is not to attract glitzy new ventures at the expense of existing tenants. “Nobody wants to see good businesses leave without taking the time to see if there are other places to go. If (existing Downtown Plaza stores) are interested in staying in the downtown core, we can help them find a new location.”

John Leonard, who with two partners purchased the 100-year-old California Fruit Building at Fourth and J streets late last year for an undisclosed amount, said he’s been in talks with some of Downtown Plaza’s existing tenants – he declined to say which ones – that are interested in staying in the neighborhood. “They’re local, stable, established and know the submarket and know their clients,” he said.

With extensive renovation of the 10-story building starting in about a month, Leonard said his partners are also meeting with potential retail and office tenants from outside the area. The building is roughly 45 percent occupied, he said, with a mix of law firms, magazine publishers and real estate developers, all of whom Leonard hopes will stay. On the ground floor, the owners envision a mix of retail that could include a sit-down restaurant, soft goods stores and a coffee roaster or deli.

Buying and renovating a property adjacent to the high-profile arena project “mitigated a fair chunk of our risk,” Leonard said. “We’ll be half a block from the arena, so our tenants can walk over to an event, a game or a concert. And arena visitors can walk over to our restaurant, which’ll be a little quieter and a little less neon.”