City Beat

Building begins on blighted block of Sacramento’s K Street

Streamers fall on the crowd as Christine Kramer captures video on her cellphone during a celebration to officially kick off the start of construction on the 700 block of K Street project on Thursday at St. Rose of Lima Park.
Streamers fall on the crowd as Christine Kramer captures video on her cellphone during a celebration to officially kick off the start of construction on the 700 block of K Street project on Thursday at St. Rose of Lima Park. lsterling@sacbee.com

The evolution of downtown Sacramento continues.

One day after the first steel beams were placed at the site of a new Kings arena, city leaders held an upbeat ceremony a block away on Thursday to celebrate the beginning of construction on housing and shops on the 700 block of K Street. The city has fought for more than a decade to revive the blighted stretch of properties, waging legal battles with property owners and the state of California.

“This is going to be one of the most dynamic blocks we have,” said Councilman Steve Hansen, who represents the central city.

Demolition work has begun on some of the historic buildings on the block. Now construction will pick up, with the project expected to be completed by the time the arena opens in October 2016.

The $55.4 million plan calls for 137 units of housing on K Street – at a mix of affordable and market rates. Mayor Kevin Johnson has set a goal of adding 10,000 housing units to the central city in the next 10 years. Hundreds of units – from K Street to artist lofts on R Street to new condo buildings in midtown – are now under construction or have just been completed.

“We need more people here, we need more people downtown,” said Ali Youssefi, one of the developers leading the K Street project.

Youssefi’s CFY Development and D&S Development, led by Bay Miry, first began inquiring about the K Street properties five years ago. They were chosen by the City Council from a competition of development plans in July 2010, after the city spent years – and millions of dollars – acquiring properties on the block.

In addition to the housing, the K Street project will feature a row of shops and restaurants, including businesses run by the operators of Shady Lady, Kru, Insight Coffee and Red Rabbit. Altogether, the development will add roughly 70,000 square feet of retail space to K Street.

Miry also wants to add rooftop seating for some of the restaurants, along with rooftop access for the residential units. The developers have also worked closely with the local preservation community and plan to rehab many of the historic storefronts and interiors on the block.

“We appreciate and love these buildings,” Miry said. “They have a lot of character. They have a lot of soul to them.”

Johnson recalled visiting a bustling K Street as a boy and going to see Bruce Lee movies at the Crest Theatre. “And then something happened,” he said, referring to the years of decline that followed.

“Now, we’re finally over that hump,” the mayor said.

The project was given its biggest boost last summer, when former state Sen. Darrell Steinberg brokered a deal that resolved a legal dispute between the city and the state Department of Finance. The city had sued the state after state officials ruled city officials had not finalized a financing plan for the project before redevelopment agencies were abolished and therefore could not transfer its K Street properties to Miry and Youssefi.

“Seventh and K is every bit as important (as the arena) if we’re going to fulfill our vision of building a downtown we can all be proud of,” Steinberg said at the ceremony Thursday.

While a lot of energy has been spent on the 700 block of K Street and the arena site, there are signs close by that a lot of work remains to be done.

City officials had a development plan in place for the 800 block of K Street five years ago, but it fell apart as a result of the recession and the dissolution of redevelopment agencies. Now the city owns several properties on the largely vacant block.

City Manager John Shirey said the city would issue a request for development proposals for the stretch this spring. “That’s the block we’ve got to focus on now,” he said.

Call The Bee’s Ryan Lillis, (916) 321-1085. Read his City Beat blog at www.sacbee.com/city-beat.

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