City Beat

Boutique hotel plan emerges for Marshall Hotel -- one block from arena site

On the same day a campaign to force a vote on the new Kings arena ended, a developer announced Thursday he was moving forward with plans to turn a single-room occupancy hotel serving low-income tenants near the arena site into a market-rate boutique hotel.

Pete Noack, who is partnering with the Presidio Hotel Group of Fairfield, said he will rehab the dilapidated, five-story Marshall Hotel at Seventh and L streets into an upscale hotel up to 17 stories tall. Notices were given to the roughly 70 residents of the Marshall that the hotel was being renovated and that the building’s owners had asked local housing authorities to help residents find new homes.

Noack said his group had been planning to make the announcement long before this week’s news that a judge had struck a measure from the ballot seeking voter approval of sports facility subsidies, eliminating a potentially significant hurdle to the $448 million arena at Downtown Plaza. But, he said, “the timing is dovetailing nicely.”

“We’ve been attempting to do this project at this location for a long period of time,” he said. “But the arena helps a lot.”

Property owners around Downtown Plaza expect the sports facility and adjacent development planned by the team owners to deliver a jolt of new customers and economic activity, and investors have increasingly focused on the nearby blocks in recent months. The arena’s arrival became more of a sure thing on Thursday, when Brad Hertz, an attorney for the groups pushing the vote on the city subsidy, said they wouldn’t appeal a judge’s ruling on Wednesday that struck their measure from the ballot.

“There are a lot of people who were on the sidelines waiting for (the arena) to get more real,” said Michael Ault, executive director of the Downtown Sacramento Partnership. “They’ll start getting engaged now. This is what everybody said would happen.”

The stretch of downtown near the arena has for decades been a gathering place for the homeless and the down and out, though recent years have brought a smattering of high-end apartments and restaurants, along with the departure of the Greyhound bus station. On Thursday, occupants of the 103-year-old Marshall milled about the lobby and on the sidewalk outside, clutching paperwork informing them of the redevelopment plans. Some had lived there for months, others for more than a decade. Some said they were parolees.

“There’s some people who’ve lived here for quite awhile. They’re shocked,” said Jimmy Garlin, 67. “There’s some guys got 30 years here.”

Garlin, who said he was on parole on drug charges, has been paying about $500 a month for his room for the past two years.

Patrick Lewis said he’d lived at the Marshall for nearly 12 years. He said he’d been grateful to move in during a winter when he was “camping out” and an employee helped him secure a room “with no credit check or anything.”

“It was New Year’s Day,” he said.

Lewis said he had seen historic photos of the hotel when it was well cared for and elegant. “This was a nice hotel at one time,” he said.

Multiple tenants interviewed at the Marshall said Thursday that the hotel is infested with pests such as cockroaches and bed bugs, and they wouldn’t be sorry to leave.

“This place is messed up,” said Elias Rodriguez, who’d lived there for six months. “They got to relocate us.”

Noack and Presidio have explored various plans for the Marshall for nearly a decade. Most recently, the group discussed a seven- or eight-story hotel with about 90 rooms.

City spokesman Maurice Chaney said the Marshall is listed on the city’s historic registry and any work on the building would be subject to extensive review by development officials.

Noack said the revamped hotel could stand from seven to 17 stories tall, with a restaurant or other retail on the ground floor. He said his team will work on the plans over the next year and hopes to finish the project before the arena is complete in the fall of 2016. He said he didn’t know whether the plan would include tearing down the existing building.

“Our intentions are to beautify the building and celebrate the structure,” he said. “It’s going to be something that blends well with the neighborhood, something that will add to the fabric of our downtown core.”

The new Marshall would be the closest hotel to the arena, bordering a planned practice facility for the Kings. The Kings’ ownership group is also planning to construct a hotel along J Street at the Downtown Plaza site.

Councilman Steve Hansen, who represents downtown, said a focus should be placed on ensuring the current Marshall residents are connected with adequate housing.

“This seems like another part of the turnaround, but we just need to make sure we take care of those people,” he said. “That wasn’t a great place to live, so maybe there’s a silver lining here.”

Garlin said the letters he’d gotten from hotel management said tenants would be helped by a professional relocation firm and would be given enough money to cover a security deposit and first month’s rent.

The Sacramento Housing Alliance, an advocacy group for low-income tenants, decried the loss of the rooms in the Marshall, saying residents will find it “extremely difficult to find available housing that they can afford.”

“This is very disappointing to say the least,” said Darryl Rutherford, executive director of the housing alliance. “In light of the development of the arena and ancillary projects, we need to ensure that our local government has policies and procedures in place to preserve housing for our poorest residents in the downtown core.”

In 2006, the city adopted an ordinance aimed at ensuring a continued supply of single-room occupancy rooms downtown. Angela Jones, spokeswoman for the Sacramento Housing and Redevelopment Agency, said in an email statement Thursday that it requires 712 units remain for low-income residents in the city core. The city has contributed hefty subsidies in recent years to revamping units for low-income tenants, most recently the Hotel Berry at Eighth and L streets. Jones said the loss of the Marshall’s rooms would not cause the supply of low-income housing units to fall below the required threshold.

Jones said the agency “will work to ensure that the owner (of the Marshall) follows the process for relocating residents.”

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