K Street Mall

8th and K hotel plan dropped

2009-12-09T06:53:53Z

Developer Bob Leach withdrew his proposal Tuesday to build a hotel on K Street Mall after financing — including public bond financing from the city — fell through.

The city of Sacramento's Redevelopment Agency now must go back to the drawing board by requesting other proposals for the property at 8th and K streets, as well as adjacent property in the 800 block of L Street.

"He pulled the plug," Sacramento City Councilmember Kevin McCarty said following Tuesday's City Council meeting.

The developers were asking the city to contribute more than $18 million in land and nearly $15 million in tax rebates toward the project.

"The city is not in a position to bond to provide permanent financing for the hotel," according to a city staff report. The item was withdrawn from the council agenda without discussion.

In 2008, the Redevelopment Agency had entered into exclusive right-to-negotiate agreements with USA Hospitality Inc., as part of a settlement with developer Moe Mohanna and other primary owners of the 700 and 800 blocks of K Street.

Development partners Bob Leach of USA Hospitality Inc. and Parkcrest Development, along with equity partner Mohanna, initially proposed building a 400-room Marriott Renaissance hotel at the southeast corner of 8th and K streets and a mixed-use project dominated by a 372-space garage on the adjacent northwest corner of 8th and L streets. The historic Bel-Vue Apartments, a city landmark built in 1910, is one of the buildings occupying that corner.

On Nov. 20, USA Hospitality submitted a new proposal to build a 300-room hotel, an adjacent 350-space garage and 100 condos above the garage in a second phase.

The developers had until Nov. 23 to get "stronger" financial commitments from lenders and investors; determine the cost to preserve the facade of the Bel-Vue; and complete business negotiations so those can be included in the development agreement. Those requirements were not met, according to the city staff report.

The South Korean company Consus Asset Management recently indicated it was willing to make a $91 million investment commitment as long as the developers got a loan from a bank that met Consus' requirements or the city agreed to provide the financing through municipal bonds. However, the developers weren't able to arrange such financing.

Leach, who built Le Rivage Hotel on the Sacramento River waterfront, submitted a letter withdrawing the project shortly before the City Council was to consider the agency's request to move forward and consider other proposals, confirmed City Councilmember Sandy Sheedy.

The city will be seeking qualified potential developers by Feb. 12.

Photos by Suzanne Hurt, a staff reporter for The Sacramento Press.

K Street Mall update

2009-08-19T03:31:56Z

K Street Mall has seen some movement this month with restaurants reopening renovation continuing and a legal challenge dismissed. Big changes may still be in the works.

Two restaurants -- Three Monkeys and the Crepe Cafe -- have reopened in their old spots. Work continues on the renovation of St. Rose of Lima Park and relocation of the adjacent light rail station.

In addition, a judge dismissed a lawsuit contesting development of a mermaid bar and two other nightlife venues in the 1000 block of K Street. Following the suit's dismissal, San Francisco nightclub operator George Karpaty said he expects his proposed businesses would help change the city's nightlife landscape.

For some time, there has been talk of reviving K Street Mall and the downtown business district by introducing more nightlife. Karpaty said the businesses he plans to open in the 1000 block would help draw more people downtown at night, rather than suck customers away from existing bars or restaurants as the owners of those businesses have feared.

"We don't look at it as competition. We look at it as co-opetition," he said Tuesday. "We believe it will be good for all the other restaurants and clubs."

Former Sacramento City Councilman Josh Pane filed a lawsuit last spring to try to stop development of Karpaty's proposed projects in the space occupying 1016-1022 K St. next to The Cosmopolitan, which opened less than a year ago featuring Social nightclub. Another "ultra-lounge," known as Cabana, operates at 1200 K St. Longtime Sacramento restaurateur Randy Paragary is part owner of both nightclubs.

Pane, along with nearby restaurant[-] and club[-]owners and some residents criticized the city for giving $5.7 million in subsidies to the project developers, David S. Taylor Interests and CIM.

On Aug. 7, Sacramento County Superior Court Judge Lloyd Connelly threw out Pane's legal challenge. The judge chose not to review the merits of the case after Pane failed to "exhaust" administrative review by appearing before the City Council or at least filing a letter with that body, said Pane, who will not pursue the case.

The lawsuit hasn't impacted the pace of the development, said Karpaty, who owns Inner Circle Entertainment.

The venues were initially said to be opening by year's end. However, Karpaty didn't want to put a timeline on construction Tuesday. His staff is still working on special permit applications to get the exterior design approved and to operate the nightclubs and an outdoor patio. The city had expected those applications by the end of July.

Karpaty is well-known for creating unique, high-end nightclubs in San Francisco. Ruby Skye won Club World's "Best Club" award at last year's Winter Music Conference held in South Beach, Miami. Slide, a former speakeasy turned boutique lounge, was just featured on the Entertainment Channel as one of the most extreme bars in the world -- entered only by slipping down a slide, paying homage to its speakeasy days.

In Sacramento, Karpaty plans to operate three venues whose interiors he described as "over-the-top spectacular": Pizza Rock, a 5,600-square-foot gourmet pizza restaurant with an outdoor patio; Dive Bar, a 3,050-square-foot bar featuring a giant aquarium and human mermaids or mermen making surprise appearances; and a 4,300-square-foot, over-30 dance club whose name has been changed from Frisky Rhythm to District 30.

Karpaty and his staff have been working with the city to get approval on exteriors for three facades, which are all contained in one building. They're fine-tuning ideas for such things as exterior colors, the rock facade to be used on Pizza Rock and preservation of a vintage billboard. The plan is to tie them to the area's existing look.

"We definitely want to give them three unique exterior and interior looks, because all three concepts are different from the other," he said. "We're looking to create some unique venues that don't look like they overly stand out, but don't look like they belong in the suburbs."

Covered with rustic brick, Dive Bar will look like it's been there 40 years, he said. Pizza Rock will look the most similar to the current downtown style. And District 30 will be more contemporary urban.

Pizza Rock's interior will be high-end industrial. World pizza-throwing champ Tony Gemignani is a partner at the restaurant. He's appeared on "Oprah," "The Late Show with David Letterman" and other shows. The Castro Valley resident will train the staff to juggle dough, while bartenders will juggle bottles and glasses.

While Karpaty said he respects Sacramento's established, high-end restaurants and clubs, he expects his businesses will "change the landscape of nightlife" in this city by offering something new.

"We're going to bring big things to Sacramento," he said. "That I can promise you."

Editor's Note: The Sacramento Press editorial team corrected errors in this story after it was published.

Plaza change key to downtown's future

2009-10-14T03:49:55Z

Mayor Kevin Johnson has put it to the owners of the troubled Westfield Downtown Plaza: Either you're in or you're out.

The company, Westfield Group, has only another month or so to tell the city whether it will invest in its downtown Sacramento mall the way it's investing in Westfield Galleria at Roseville, Johnson told Westfield representatives and downtown business owners Monday.

"If not, we need you to not hold our city hostage anymore. We need you to sell and let the city move forward," he said. "In November or so, we need you to realize if you're in, you're in. If you're not, you're not."

For at least 11 years, the city has been negotiating over Downtown Plaza with Westfield, perhaps the world's largest shopping mall owner with more than $47 billion in investments in 119 shopping centers. In 2006, Westfield proposed a $120 million overhaul of Downtown Plaza. In May, the company postponed those plans for at least the rest of the year, while completing its $120 million reinvestment at Westfield Santa Anita in Southern California's Arcadia.

The mayor has been pressing Westfield for investment since at least August, when the company also backed out of a planned $200 million renovation of North County Mall in Escondido.

In a meeting at Cosmopolitan Cabaret Monday, Johnson said he and other city leaders are currently engaged in meetings with Westfield Group to determine whether they can make the current partnership work, or whether Westfield should sell the mall to the city or developers from Sacramento or beyond.

The mayor delivered the ultimatum during the first of two community meetings dubbed "Unlocking the Grid" that he's holding as the city works on a new strategy for K Street Mall and the downtown core. More than 100 business and property owners and others took part in the first meeting. Next Monday, Johnson plans to meet with people who live, work or visit downtown at 5:30 p.m. at the cabaret, 10th and K streets.

At the meeting's start, Johnson took a look back at decisions made in the last 50 years that cut off key streets and areas like Old Sacramento and the Sacramento River: the widening of Capitol Mall in the 1950s, the construction of I-5 and removing cars from K Street in the 1960s, construction of the suburban-style Downtown Plaza and Sacramento Convention Center in the 1970s, light rail construction in the 1980s, and tripling the size of the convention center in the 1990s.

Johnson encouraged participants to consider all of the city's assets while coming up with big-picture ideas to improve downtown and reconnect all its parts. Every decision impacts what the city will become, he said.

"We have to create an environment where all boats are rising," he said. "I don't want us to fall into doing the easiest thing to do."

Problems with safety and cleanliness were at the forefront for many. K Street Mall is plagued with "bums, lunatics, thugs and drug dealers," and the city should have a "visible police presence" on K Street until 2 a.m., said Gene Barton, who owns Marilyn's nightclub, 908 K St.

"No one's patrolling alleys. No one's down there after dark," he said.

Hannah Brantingham, the 27-year-old operations manager for 24 Hour Fitness on Seventh Street, said she didn't feel safe walking three blocks down K Street Mall to the afternoon meeting. She's concerned about the safety of employees who walk from a dirty yet expensive parking garage and about cars being stolen or burglarized there.

Another participant asked whether the city would relocate "SRO" hotels, cheap hotels providing single room occupancy on and around the mall.

The SROs have been a problem for "too long," said Johnson, who added, without going into specifics, that he's committed to not having SROs be an impediment to Westfield or other business owners.

The city should focus first on building a mass transit system to carry more people downtown, which would encourage development, said developer David Taylor.

Light rail to Davis could make it easier for UC Davis's 30,000 students to party, shop or eat downtown, said Steve Ayers, a developer and local steel company executive.

Plenty of talk revolved around how to bring more business, housing and spenders downtown. Some people suggested downtown — via retailers and restaurants — must stay open later to increase safety and make the area a more desirable place to be.

Sean Kohmescher said he keeps his Temple coffee and teahouse at 1014 10th St. open until 11 p.m., even though he loses money doing so, because that supports the kind of city he wants to live in. He suggested more business owners "take it upon themselves to create that."

While some were focused on bringing more "high-end" boutiques, restaurants and housing downtown, Kohmescher and others said the key is to have businesses that students and residents with middle-class or fixed incomes will use regularly.

Midtown works better than downtown because it has "mid-level" options, said Brook Taylor, a young professional who works in the Governor's Office of Planning and Research.

The city should focus on serving the needs of "folks in the middle" who provide a steady stream of business to the city, he said.

Suzanne Hurt is a staff reporter for The Sacramento Press.

Sac to get "3rd Saturdays"

2009-07-13T03:05:59Z

So -- you like Second Saturdays?

Do you like the way this local arts night has morphed into a street fair? Have you watched the event grow so big that you've hoped it could take over the central city more than once a month?

Your prayers may be answered this month when a new Saturday street fair debuts in Sacramento. Sponsored by Sacramento News & Review (SN&R), "Design Downtown" will bring mostly locally made or "do it yourself" (DIY) fashion and art to the K Street Mall from 3 to 9 p.m. every third Saturday starting July 18.

"We looked at the success of Second Saturday and said, 'Maybe that's something we can build on,' " said Clay Nutting, the sales and marketing manager for the paper. "We hope that it becomes a local, DIY kind of experience."

The weekly alternative paper is putting together "a creative block party" to bring more energy and business to the pedestrian mall, which is often nearly empty on weekends.

"No one's going to show up to see Sacramento News & Review," he said. "It's the vendors, it's the musicians, it's the businesses, it's the excitement of going out on a Saturday and doing something new."

SN&R has been working closely with the city and event partners -- the Hard Rock Cafe, as well as Cosmo Cafe and Social Nightclub, the former operated by Paragary Restaurant Group and the latter operated by Randy Paragary and Bob Simpson at The Cosmopolitan, 10th and K streets -- to get the event up and running in a short time. Beer makers Budweiser and Corona are event sponsors.

On Friday, SN&R staffers were still reaching out to other mall businesses to let them know about the event and how they can participate. Paragary Restaurant Group quickly became interested after canceling the Bloc Concert Series planned for last Saturdays at Marshall Park due to lack of profit. Few people went, especially to the June 27 concert that competed with other events that day, including SN&R's Music Fest and SAMMIES (Sacramento Area Music Awards) Ceremony.

In May, the concert series, Midfest Summer Celebration and Paragary Restaurant Group owner Randy Paragary came under fire from some Marshall Park residents and neighborhood groups. Residents expressed concern over impacts the events might have on the primarily residential neighborhood a few weeks after a Cinco de Mayo street party got out of hand outside Paragary's Centro Cocina Mexicana. Residents requested that the events be held downtown in a business district.

SN&R, a media sponsor for the concerts, was aware of the situation. But SN&R staff had already been planning the Third Saturday event, so its hasty launching isn't Paragary's attempt to meet residents' requests by moving the Bloc Concert to the mall, Nutting said.

"We looked at some of the concerns with events happening throughout town and thought that (K Street Mall) area might be more accepting of what we're looking to accomplish," Nutting said.

At the Seventh Street entrance to Westfield Downtown Plaza, the Hard Rock Cafe will hold a free, all-ages show featuring local teen bands on an inside stage from 3 to 6 p.m. Social will feature an after-party event with DJs. The main stage will be set up on 10th Street near the alley between K and J streets. Bands including The Kinetics, ZuhG and Musical Charis will play that stage after 5 p.m. Cosmo Cafe is extending its catering license to have a barbecue and beer garden.

Hard Rock Cafe staff think the event is "great," said Sales and Marketing Manager Kim Templeton.

"I think Sacramento has a lot of creative people, a lot of great artists, a lot of great musicians," she said. "I think K Street is a great area to bring some activity here."

The event will feature eclectic vendors selling fashion, jewelry, arts and crafts, while highlighting businesses on and around the mall. Some vacant storefronts plaguing the mall would ideally be used for art workshops, he said.

"Everybody knows K Street has had its ups and downs. (But) there are these really great high spots we want to accentuate," said Nutting.

At least 40 vendors are already on board to set up tables, booths and tents on the mall from Ninth to 11th streets and on 10th Street, which will be closed to vehicle traffic. Vendors range from local fashion designers and comic book artists to photographer Kenna Foster.

Nutting said he hopes street performers will get involved and he's encouraging other businesses to get musicians to play outside their storefronts. A jazz group is expected to play on a street corner.

By early Friday afternoon, the city's Parks and Recreation Department had awarded a conditional permit for the Design Downtown series. The official permit will be awarded as soon as SN&R gets insurance coverage for the event, said Recreation Superintendent Teresa Jackson, who oversees the department's special events office. A conditional permit allows an organizer to plan and advertise an event, she added.

A permit for the entire series will be awarded, rather than one for each date, because parks staff believe the mall will be a "good fit" for the event and crowd. Paragary Restaurant Group had to apply for a permit for each concert in the Bloc Concert Series so the city could evaluate whether Marshall Park could accommodate the crowd, Jackson said.

"With (K Street Mall) it's a much larger venue, so we don't have the same concerns with attendance," she said.

Off-duty Sacramento police officers have been hired to work the event. A sergeant will monitor the sound level, which will be established on the permit. The permit requires the beer garden to serve its last drink at 8:30 p.m. and the event to end at 9 p.m. No parking enforcement problems are anticipated.

SN&R also has worked with Sacramento Regional Transit (RT) District engineers to safely lay out the street fair without impeding light rail trains, which will be running every 15 minutes in both directions. Vendors will back up to storefronts and must be at least 10 feet from the tracks. Pedestrians must stay behind yellow warning tiles running on both sides of the track.

"We want to make sure the trains operate as they should and we want to make sure everybody is safe. The trains regularly operate in a pedestrian environment," said Alane Masui, RT's assistant general manager of marketing and communications. She encouraged people attending Design Downtown to use light rail.

"Light rail is the perfect way to travel to the event. It'll take you right to the event," she added.

Paragary Restaurant Group did not return phone calls.

As the event grows, SN&R will work with more businesses to find "creative ways" to tie them into Design Downtown, Nutting said. The paper wants to help businesses that are "sticking it out" on the mall despite the blight and the recession, he said.

"It's very organic. What it evolves into -- I'm just as excited as anybody to find out," he said.

Mermaid bar work resumes

2010-02-13T03:12:53Z

K Street Mall is getting some activity after work began again on a mermaid bar and two other nightlife venues.

San Francisco nightclub owner George Karpaty originally hoped to open Dive Bar, a dance club named District 30 and a gourmet pizza restaurant, Pizza Rock, near 10th and K streets by late 2009. The $6 million-plus project was delayed at least in part by opposition, including a lawsuit to stop it that was thrown out of court last summer.

Saying he wanted to move forward, Karpaty declined to discuss the reasons the project on the blighted mall was thrown off schedule. But, he said, he now expects to open all three sites by late summer.

"We had some delays. But we're coming," he said.

Developers David Taylor and Los Angeles-based CIM Group have begun work on the shell and core of the building they now own at 1016, 1020 and 1022 K St. Crews are working to make the building structurally sound and to repair the roof, said Ellen Warner, a partner at David Taylor Interests.

"K Street still really needs a lot of revitalization," she said. "We think that's important for our community."

Late last year, the city's Redevelopment Agency transferred ownership of the building, which is divided into three suites, and one next door at 1012 K St. — and the land under both — to Taylor and CIM.

Fabricators in various studios are now building the giant aquarium that will hold "mermaids" of both genders, as well as other big pieces for Karpaty's new businesses.

"It's going to be far more over-the-top than people think," Karpaty said. "It's going to be insane."

Karpaty said he used his experience opening award-winning Ruby Skye and four other Bay Area nightclubs to create unique design elements for his newest project. Inside the gourmet pizza restaurant, Pizza Rock, a DJ will play music from a retro Mack truck that appears to be breaking through the ceiling 15 feet in the air.

And he said he expects Dive Bar's aquarium, which weighs 150,000 pounds without water, will be the biggest aquarium in a nightlife venue in the world — second only to tanks at museum-grade aquariums.

"I think this is the most creative project we've ever done. Period," Karpaty said. "It's revolutionary stuff."

The developers also have been talking with potential tenants for 1012 K St., but it's too early to discuss, Warner said.

A $5.7 million city subsidy for the properties still rankles some business owners. Karpaty stressed earlier this week that all the money did not go to his project or the building. City staff did not answer questions Friday seeking clarification.

A little more than $3 million is going toward shell and core improvements for both buildings, the one from 1016 to 1022 K Street and the one at 1012 K St. The remainder — more than $2 million — will go to future tenants of 1012 K St. for tenant improvements, Warner said.

The cost of tenant improvements for Karpaty's project are being shared by Taylor and Karpaty, she added. Karpaty said he's paid $2 million to date.

With city money being used to bring buildings up to code and ready to lease, the developers could have more money to help tenants pay for interior improvements specific to its new use.

The roughly 30,000-square foot building at 1012 K St. sits between Karpaty's future entertainment complex and The Cosmopolitan, which was opened without city subsidies in fall 2008 by longtime Sacramento restaurateur Randy Paragary and partners.

The property transfer was part of a 2008 Sheraton Hotel deal. The city agreed to split $50 million in profits from the sale of the $130 million hotel with Taylor and CIM for development in the J, K and L streets corridor.

Karpaty said he didn't want to divulge too much about the venues yet. But he did explain why he changed the dance club's name from Frisky Rhythm to District 30.

"I love the name Frisky Rhythm. I picked it. I'm going to build a bar called Frisky Rhythm — just not here," he said. "It did not receive positive feedback from people I was meeting with in Sacramento. So being a good project developer, I listened. We made a change."

Karpaty said he plans to organize shows and dancing at other venues in Sacramento, including the Memorial Auditorium and the Sacramento Convention Center. He added that he plans to put on five to seven grand-opening events for his K Street venues, with entertainment including stilt performers and contortionists.

"We're going to put on a big show," he said.

Suzanne Hurt covers business and development for The Sacramento Press.

Report: J-K-L focus must be residents

2009-11-19T05:44:13Z

If you build it, they will come.

What's been said about baseball diamonds in Iowa is now being said for downtown Sacramento's future retail market, according to a retail consultancy firm that has just finished a study of the J-K-L corridor.

In this case, "they" represent 72 percent of the greater Sacramento area's 1.65 million population: "urban chic" Sacramentans who own homes in the central city; young, child-free metrorenters; "in style" suburbanites who love the gritty city; long-time residents and new homeowners living just outside the core; and connoisseurs who want the best of everything, said Scott Schuler with Downtown Works of Washington, D.C.

"You have got to draw people from the entire market. The number of people downtown is not enough," Schuler said Wednesday when the firm presented a draft report to the Downtown Sacramento Partnership board, Mayor Kevin Johnson and city employees. The figure is based on demographic and lifestyle data other companies have produced for Sacramento.

The news that Sacramento's historic retail core could thrive once more by catering to residents throughout the region was a surprise to those who have long thought the area should be developed to attract travelers and the most wealthy residents.

"That is enough to support downtown if we have the right kind of market," said DSP Chair Kipp Blewett. "The future of downtown is going to be in the renaissance of the urban core."

While visitors remain important to the economy, they spend much more on food and beverages than retail. In addition, visitors want to experience the real city, Schuler said.

"They want to go where residents go," he said. "You don't market to them."

The city has focused strongly on bringing more nightlife and entertainment to K Street Mall. But the area needs at least as many, and possibly more, day-time uses, said Midge McCauley, also with Downtown Works, which prepared the report for the DSP and the city.

Downtown Works studied groundfloor spaces on J, K and L streets between 7th and 12th streets, and on the sidestreets of 9th to 11th streets in that area. About 18,000 people live downtown in 700 single-residency occupancy hotels and 220 market-rate housing units. The area includes 700 single-residency occupancy units and 220 market-rate housing units. About 18,000 people are estimated to live within a one-mile radius of 9th and J streets — a number the consultants pointed out as too low to support retail in the J-K-L corridor. About 93,000 people work downtown, she said.

Out of 231 total spaces, 57, or 25 percent, are vacant. Many current storefronts are "shabby" and "dated." Sandwich board signs and dead plants, replaced with new landscaping only recently, pull the area down, McCauley said. Obstructed sight lines are another problem, said McCauley, who recommended removing ticket vending machines and ramps

Only 10 percent of the 174 that are occupied are dedicated to selling retail goods. And out of 103 retail spaces that house restaurants, clubs or shops selling goods, Downtown Works identified only 12 percent as desirable enough to keep, she said.

Quality retailers have unique, attractive storefronts with distinctive, eye-level signs and appealing window displays, good merchandise that is well organized and a clean, well-maintained store.

The proposed solution: hire a "retail recruiter" whose job is to find urban pioneers — innovative retail entrepreneurs from near and far willing to open up shop in the city's risky downtown retail corridor. Arm the recruiter with the latest data on available property and financial incentives to lure retailers who agree with the vision to revitalize the area, McCauley said.

Undesirable tenants could be phased out as their contracts come up. The retail mix needs much more variety, such as apparel, outdoor goods, shoes, accessories and home furnishings. The mix should be unique — not something already offered in shopping malls. Independent stores should be focused on first, and chains that aren't overly represented in the market should be considered later, she said.

They recommend allowing cars on the entire K Street Mall, rather than a one- or two-block pilot which people are unlikely to use. The firm also recommends lower-level planters over trees, which they said block sight lines, tear up sidewalks and obstruct signs.

"People love their trees but trees are a retailer's nightmare," McCauley said.

Programs could be developed to offer facade grants and forgiveable loans for businesses that remain for at least five years, with 20 percent of the loans forgiven each year. Downtown Works recommended the first three to five pioneers get loans of $300,000 to $500,000. Other new businesses that fit the vision might get $20,000 to $100,000, McCauley said.

"We know those early deals are often the hardest ones to make," said McCauley, adding that the first deal would take a year to a year and a half if a recruiter began work today.

The DSP board members now must agree on whether to support the recommendations and then vote on formal adoption in December. Blewett said it was too early to discuss funding sources for such programs. However, if the city were to provide $1 to $2 million from the general fund, that could generate much more tax revenue for the city, he said.

Blewett pointed to Sean Kohmescher, who owns Temple coffee and teahouse on 10th Street, as the type of urban pioneer the corridor needs more of.

"He's young. He's entrepreneurial. He's committed to downtown," Blewett said. "Look what he did with a lot of elbow grease and some guts."

Suzanne Hurt is a staff reporter for The Sacramento Press.

Editor's Note: The Sacramento Press editorial department corrected a fact in the above article after the article was published. The original sentence is denoted with strike-through text, with the new sentence proceeding it.

K Street Mall redevelopment continues

2009-06-25T03:28:29Z

Work is moving forward to bring a mermaid bar and other nightlife venues to troubled K Street Mall, while the city attempts to address a lawsuit over the development.

At the end of May, developers David Taylor and Los Angeles-based CIM Group finished the first stage of interior work for the controversial project to redevelop long-vacant buildings at 1012 K St. and 1016 - 1022 K St. Crews cleaned up contaminants including asbestos and lead and also took down some inside walls.

The developers are now working on construction drawings to gain approval to bring the shell and core up to code. They are expected to submit the drawings to the city in August to show how they plan to meet the city's seismic, electrical and plumbing requirements, said Beth Tincher, a senior project manager with the city's Economic Development Department.

San Francisco nightclub owner George Karpaty, the project's proposed tenant, is planning to operate two high-end nightclubs at 1016 - 1022 K St.: the 3,050-square-foot Dive Bar with a giant aquarium inhabited by live, human mermaids and a 4,300-square-foot over-30 dance club whose widely ridiculed name is proposed as Frisky Rhythm; and Pizza Rock, a 5,600-square-foot gourmet pizza restaurant with an outdoor patio. The structure last housed a Hit Or Miss clothing store.

By the end of July, Karpaty is expected to submit applications for special permits needed to operate the nightclubs and outdoor patio, as well as to get the exterior design approved, Tincher said.

The developers will later propose another project for the building at 1012 K St., previously a Rite Aid.

The city's Redevelopment Agency currently owns the land and will later transfer ownership to the developers. Tincher could not provide a dollar amount for the land's value.

"There's a negative value shown on the property because of the contaminants. It's not a site that most people would consider valuable," she said.

The Sacramento City Council came under fire in March for approving $5.7 million in subsidies for the project on the blighted mall. The funding includes $5.4 million for tenant and public improvements, and nearly $300,000 for abatement and interior demolition.

Former Sacramento City Councilman Josh Pane, nearby restaurant and club owners and some residents criticized the city for giving the money to David S. Taylor Interests and CIM. Pane sued the city and the developers in spring to try to stop the project. He contends that the city OK'd the development without a proper CEQA review.

Attorneys for the city and developers are holding ongoing meetings with Pane and his attorneys to try to resolve the issue.

"We feel very confident that everything was done absolutely 100 percent correctly," said Ellen Warner, a partner at David S. Taylor Interests.

Providing redevelopment funding had been part of the deal to sell Taylor the Sheraton Grand Sacramento for $130 million last year. The city agreed to split $50 million in profits from the sale with Taylor and CIM for development in the J, K and L Streets corridor, she said.

Other Sacramento Press stories on the subject can be found here and here.

Public hearings will be held after the special permits applications are submitted.

Suzanne Hurt is a staff reporter at The Sacramento Press. She can be reached at 804-2856 or suzanne@sacramentopress.com.

K Street's mojo rising

2009-07-17T02:51:54Z

Despite temperatures that soared past 100 degrees, construction crews worked hard this week to help K Street get its groove back.

Sacramento Regional Transit supervisors have been on-site daily to inspect, while crews selected by general contractor Otto Construction dug trenches and laid electrical conduit for a new light rail stop and handicapped-accessible "mini-high" platform on Seventh Street.

The roughly $4.5 million first phase of the K Street makeover includes a facelift for St. Rose of Lima Park, a light rail platform relocation and a streetscape renovation for the 700 block of K Street Mall. The city and Sacramento Regional Transit are partnering on the project. The long-term goal is to renovate K Street up to 12th Street.

City officials want to cultivate the mall's aesthetics and ambiance. They also want to more easily connect the area's struggling retail mall, Westfield Downtown Plaza, with the convention center and points in between.

"The streetscape is kind of the first step in revitalizing K Street," said Denise Malvetti, a city senior project manager who is overseeing the first phase project. "We're trying to enhance the pedestrian experience. We're hoping to make it look more inviting and pleasant."

Portland-based Walker Macy is the design firm on the project. Most of the funding for the first phase comes from tax increment financing, which uses expected future increases in tax revenue to fund current projects. Park funds are also being used, she said.

Since starting work on the project in early May, crews have excavated St. Rose of Lima Park and built trenches for electrical and irrigation equipment there. They've also poured new curbs and gutters on Seventh Street.

On the south side of K Street, they've opened hollow sidewalks that reach down to the city's original ground level. The streets of Sacramento flooded so much in the 1800s that many streets of the old city's downtown were eventually raised as much as 12 feet. Crews are now cleaning and shoring up the hollow sidewalks, said Malvetti.

Crews also have removed concrete and done excavating work in St. Rose of Lima Park, which was named for the first person in the Americas to be designated a saint by the Catholic church.

The park's layout will remain the same. The centerpiece will be a new water feature for people to play in during scorching Sacramento summers or just relax near during lunch. In the winter, the interactive, in-ground fountain will be covered by the ice skating rink. A new restaurant with outdoor dining is expected to replace Three Monkeys on the east side of the park.

Next week, a new underground vault for the park is expected to arrive. Otto Construction is expected to continue excavation to install the vault, which will store fountain equipment. These and other improvements are hoped to make the park -- and the mall -- more of a "destination" for residents, downtown workers and visitors, Malvetti said.

Recently, city officials and developers also have been talking about another idea to bring more people to K Street Mall: reopening the mall to cars.

The St. Rose of Lima light rail stop and handicapped-accessible platform ramp will be moved from the 700 block of K Street to Seventh Street to open up that section of K Street, making it easier to walk there and creating more of a plaza feel. The existing stop/platform will continue to operate until the new one opens.

The streetscape will be upgraded with more trees, greenery and flowerpots; matching black "street furniture" including benches, light posts, bike posts and trash containers; colored concrete paving stones or pavers. Any unhealthy trees may be removed and tree beds will be enlarged to hold landscaping.

The park is expected to be finished in November in time for the holidays. Construction on the south side of K Street will continue into December, said Malvetti.

City officials and staff are currently seeking funds to renovate other sections of the mall. No other phases are funded or planned yet. This first phase is expected to be the most expensive due to the park rehab and light rail relocation, she said.

"We're really excited to have Seventh Street under construction," Malvetti said.

Suzanne Hurt is a staff reporter for The Sacramento Press. She can be reached at suzanne@sacramentopress.com or by calling 916-804-2856.

Westfield will sell Downtown Plaza

2009-12-15T20:43:48Z

Westfield Group has agreed to sell Downtown Plaza, Mayor Kevin Johnson announced Tuesday morning.

The city has been pressing Westfield to invest in the plaza for nearly 12 years. Since August, Johnson has been pushing the shopping mall owner to make good on its promise to invest at least $120 million in the under-performing plaza.

The alternative, he said at the time, was for Westfield to sell the plaza. Unwilling to invest that much, Westfield decided to sell, Johnson said. But the mayor and city staff must now find a buyer who can agree on a price with Westfield.

"Westfield has agreed to step aside, and, if necessary, sell its interests in Downtown Plaza," Johnson said during his weekly press conference Tuesday morning.

Westfield has not gotten on board with the city's new vision to open up the plaza, creating an "outward-facing" mall open to the sky and street traffic, he said.

The company's decision makes it easier for potential arena developers to discuss buying the property from Westfield, Johnson said.

Westfield had proposed a $120 million plaza overhaul in 2006. But the company repeatedly stalled on putting those plans into action. In May, Westfield postponed those plans for at least the rest of the year, yet completed a $120 million reinvestment at Westfield Santa Anita in Southern California's Arcadia.

Johnson and other city leaders have been meeting with Westfield representatives for months to negotiate either investment or the sale of the mall to the city or developers.

The Downtown Plaza was built in the 1970s. Westfield bought the plaza in 1998. The company now has more than $47 billion in investments in 119 shopping centers throughout the world.

The plaza has been losing tenants for years, and stores like Banana Republic and Ann Taylor closed recently. The mayor said he planned to call the chief executive officer of the plaza's anchor store, Macy's, later Tuesday to assure the department store chain of the city's commitment to the plaza and its retailers.

Mayor to host K St. meetings

2009-10-07T04:38:40Z

Mayor Kevin Johnson on Tuesday announced two community meetings to exchange ideas on reviving K Street Mall and Westfield Downtown Plaza, shortly before an independent analysis comes out.

The mayor will meet with business and property owners next Monday, and then with the rest of the public on Oct. 19, as a way to involve the community in the ongoing effort to develop a new strategy for K Street and the rest of the J-K-L corridor, the core of downtown.

"We want to create a new vision," Johnson said in his weekly press conference inside city hall. “We need to re-imagine what downtown looks like.”

The issue has vexed other mayors and city councils. The meetings will be the first such community meetings held by Johnson.

Last spring, the city's Economic Development Department and Downtown Sacramento Partnership hired a Washington, D.C. firm to evaluate K Street Mall's existing retail environment and propose an immediate action plan, after taking into account new realities in the retail industry and the current state of the capital market, said DSP Executive Director Michael Ault.

Midge McCauley and other retail consultants from the firm Downtown Works will present their recommendations to the DSP board next month. Their work cost $80,000, said Johnson's spokesman Joaquin McPeek.

On Oct. 12, the mayor plans to meet with business and property owners, as well as the former owners of defunct businesses. The meeting will give stakeholders from J, K and L streets between Third and 16th streets a chance to share past challenges and current concerns, and give input on possible answers to the area's problems.

"The mayor believes that success cannot be attained unless the entire corridor is involved in the solution," McPeek said.

Johnson said he also wants to make sure they're appreciated.

"I want to thank them for staying and not bailing out on us," he said at the press conference.

At both meetings, the mayor will share his ideas for the area's future. He has engaged in talks with the Downtown Plaza's owner, Westfield Group, the world's largest retail property group, to find out by year's end if the company will invest more or sell its part of the shopping mall.

"I think it's clear the mayor is very focused on wanting to get some resolution on the future of Downtown Plaza," Ault said.

The plaza could face significant change, which could include reopening that section of K Street — as suggested last week during a panel discussion hosted by the Urban Design Alliance of Sacramento.

"I don't think it's surprising to anyone that that mall is in need of a pretty significant renovation or redevelopment," Ault said. "The current situation and status quo is not an option."

However, as the plaza's owner, Westfield Group has to be involved in moving forward, he added.

"This has got to be a team effort for all of us," Ault said.

The mayor will hold a public meeting on Oct. 19 for residents, visitors and people who work in the city. Location and time will be announced later, McPeek said.

"It's open to anyone who wants to come who has great ideas," he said.

Staff reporter Kathleen Haley contributed to this report. Suzanne Hurt is a staff reporter for The Sacramento Press.

Downtown group creates economic development strategy

2009-12-17T03:31:20Z

The Downtown Sacramento Partnership on Wednesday identified its primary strategy to help drive downtown's economic development for 2010 and beyond.

The business group's board also voted to accept a study of the J-K-L corridor prepared by Downtown Works, a Washington, D.C. retail consultancy firm.

The full and final report was presented at the partnership's annual meeting, held Wednesday morning at the Citizen Hotel.

Within the next month or so, the business group will identify the "core" three to five strategies out of nearly 30 that were approved for 2010 through 2012.

"Probably the most important element that has come out of the study is to restate a concept that has long been considered an important element by the partnership, and that is to focus our efforts in order to maximize their impacts," said Michael Ault, executive director of the Downtown Sacramento Partnership, in a prepared statement.

Long-term goals include improving people's ability to walk, bike, drive or take public transit throughout downtown and to reconnect the central city grid, with two-way traffic on K Street from Old Sacramento to Midtown, according to a strategy report.

The group's strategy would be to support the identification and improvement of important pedestrian corridors and to support two-way car traffic starting with at least four blocks on K Street Mall and whenever other opportunities present themselves.

K Street is currently closed to traffic or no longer exists in several places, including through the middle of Westfield Downtown Plaza and the Sacramento Convention Center.

Another strategy is to collaborate on the vision and schedule to develop critical downtown assets, including the Downtown Plaza, city-owned parcels in the 700 and 800 blocks of K Street, relocation and replacement of the Greyhound Bus terminal and a downtown sports and entertainment arena.

The partnership wants to encourage "more balanced" housing options to include units that would fit a range of budgets, rather than a majority of single-residency occupancy units as currently exists.

The strategy would include collaborating with the city to improve the process for putting housing in vacant or under-used upper floors of existing buildings.

The group proposes finding funding partners and working with the city to develop a retail recruitment program, which would involve hiring a retail recruiter and developing incentives such as loans and façade grants to bring new retailers to the target area, the J-K-L corridor.

The group also proposes initiating a study of downtown infrastructure including water, sewer, electrical and cable; a new focus on Old Sacramento; maintaining K Street streetscape improvements as a priority and other strategies.

"Given the findings, downtown offers a significant opportunity to the city to invest in enhancing our urban center, which will offer consumers a unique experience not rivaled by other jurisdictions in the region and ultimately bring more revenue to the general fund through increased sales," Ault said.

Dialogue: K St. Mall

2009-10-02T04:16:45Z

Locals with dismal views of K Street Mall might take heart in the optimistic views shared during a Wednesday night panel.

Sacramento may not be a hard urban center like Chicago, Los Angeles, Boston or New York. But the answer to the problems plaguing K Street, from closed streets and empty storefronts to a struggling shopping mall and safety concerns, is not to try to replicate what large cities or the suburbs offer. Emphasizing Sacramento's distinct character is critical to revitalizing K Street and downtown, they said.

"This community has a soft-shoe quality. It's very unique, very friendly, very green," said Ken Kay, an urban designer who runs KenKay Associates in San Francisco. "The authenticity of this place is really the soul of what people want."

He was among the panelists who took part in September's Design Dialogue, "K Street: A Postcard into the Future" at the Crest Theatre, 1013 K St. At least 100 city residents, design professionals, developers, government employees, retailers and others turned out for the event sponsored by the Urban Design Alliance of Sacramento and Downtown Sacramento Partnership. The nearly two-hour question-and-answer session was moderated by Bob Chase, Sacramento County's chief building official.

Opening up K Street and improving links to the riverfront, Old Sacramento and the city's distinct neighborhoods are the hands that can administer cardiopulmonary resuscitation to the heart of downtown Sacramento, according to panelists discussing the future of K Street Wednesday night.

Ideas that were discussed include eliminating or reconfiguring Westfield Downtown Plaza; allowing cars and bikes back on the currently closed section of K Street; adding colorful old trolleys, creative lighting and more public art; ensuring the central city has good schools; and offering more culture and unique activities such as interactive venues that focus on art or technology.

Downtown needs to capitalize on its two major open spaces: the riverfront and Capitol Mall, Kay said. K Street's "flow" to the river and Old Sacramento, as well as the connectivity between other streets and neighborhoods, needs to be improved. That way, people can easily travel between the heart of K Street and the river, and from downtown to Sacramento's neighborhoods, which are "some of the best traditional neighborhoods in all of Northern California," he said.

"You have a pretty established street on K Street with a huge natural amenity — the river — at the end. You should monopolize on that," he said.

Downtown Plaza interrupts that flow, especially at night when it's closed. An indoor shopping mall like that is "outdated," Kay said.

The Downtown Plaza can't be considered successful, said Midge McCauley, a retail consultant with Downtown Works of Washington, D.C., who's currently preparing a study of K Street Mall for the Downtown Sacramento Partnership and the city.

Cities across the country developed indoor shopping malls after those sprouted up in the suburbs. But now those suburban malls are trying to capture the feel of a city by going after a "faux urban" experience, McCauley said.

"Here's the good news: You've got the real thing," she said. "We just have to repopulate it with retailers. But that starts with local and regional retailers. National retailers are not pioneers. They're not going to be the first in."

However, the mix of retailers and the other businesses, activities and amenities must be unique to K Street, rather than copying the suburbs, which has been proven not to work, she added.

The city is working on returning cars — and bikes — to K Street Mall as "one tool" to help bring more potential shoppers to the mall, said John Long, a transportation engineer with DKS Associates of Sacramento.

City planners believe opening two blocks as a pilot project could be done more quickly and at lower cost than other improvements that are being considered to bring retailers back. Businesses want customers to be able to drive by to check out their stores and to be able to drop people off right in front, he said.

In addition, people who are concerned about safety issues on K Street Mall need to be able to drive there first. Allowing cars is seen as the way to get people to K Street who aren't going now — suburbanites who don't work downtown, Long said.

The panelists acknowledged downtown was successful when enough people lived there and that downtown residents are another key to restoring vibrancy. However, Sacramento is "light years" away from having enough downtown residents to "radiate success" there again, McCauley said.

"Any major city, it's still based on the retail culture, as well as the other urban amenities a downtown has to offer," she said.

Suzanne Hurt is a staff reporter for The Sacramento Press.