City Beat

Kings plan to maintain control of key downtown properties

The Sacramento Kings got this property at the southeast corner of Eighth and K streets from the city to develop two years ago.
The Sacramento Kings got this property at the southeast corner of Eighth and K streets from the city to develop two years ago. Sacramento Bee file

The Sacramento Kings are maintaining their control over nine blighted parcels near the corner of Eighth and K streets in downtown Sacramento, a sign the team intends to expand its downtown development plans beyond the perimeter of its new arena.

The decision also likely ends a proposal by two separate development teams that had presented city officials with plans to build luxury apartments, shops and potentially a grocery store on the site.

Under the terms of the financing agreement for the $507 million Golden 1 Center, the Kings were granted the right of first refusal on any sale of the city-owned properties on Eighth, K and L streets. They executed that right Friday afternoon, just hours before it expired, city officials said.

Developers Bay Miry of D&S Development and Ali Youssefi of CFY Development had entered into negotiations with the city in December to buy the land.

Miry said he was working on a proposal to construct a large luxury apartment building at the corner of Eighth and K – a vacant lot currently surrounded by chain-link fence. He said the building would have been larger than the six-story condo tower he recently constructed at P and 16th streets in midtown, but similar in style.

Youssefi said he planned to rehab the old Bel-Vue apartments near Eighth and L streets, along with other buildings near the corner.

CFY and D&S have experience in that stretch of downtown: The firms are partnering on a $55.4 million project that will transform the south side of the 700 block of K Street into shops, restaurants and 137 apartments. That project is expected to be completed in early 2017.

Assistant City Manager John Dangberg said the city has not seen plans from the Kings for the Eighth and K sites. He said the team must match the price and terms of the proposal presented by D&S and CFY, including how it intends to finance their plans and the timing of its proposal.

Dangberg said he could not divulge details of those terms while negotiations were getting underway.

“We will sit down with the Kings very soon and go through the terms,” he said.

The parcels were part of a portfolio of properties the city agreed to transfer to the Kings under the terms of the arena deal.

Also included in the agreement were two lots near the Crocker Art Museum and 100 acres next to Sleep Train Arena, which the Kings will leave later this year when they move into Golden 1 Center. The Kings have not released plans for either of those sites, although the team said in December it had “ramped up” efforts to assemble a plan for the redevelopment of the Sleep Train site.

Ryan Lillis: 916-321-1085, @Ryan_Lillis

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