In another sign of economic revival in Sacramento's Tower District, a local investment group has acquired a half city block at 19th Street and Broadway with plans that could include luring retailers and possibly a grocery store.
Sutter Capital Group on Thursday completed its purchase of the property across the street from the Broadway light-rail station.
The site, which includes a vacant, 28,300-square-foot building, was acquired a decade ago by a group planning to build a residential and retail complex there called the Broadway Lofts. But those plans fizzled during the recession.
Sutter, an active local investor, intends to either rehab the existing space for retail users or demolish all or part of the structure and do new construction there, said Burke Fathy, a managing partner in the investment group.
"We'll just let the market speak to us in terms of what's the highest and best use," he said Thursday.
The existing structure is now fenced in and is "not the most attractive building when you drive by," Fathy said. But it's solidly constructed with heavy timber trusses and has vaulted 18-foot ceilings.
"You can really (develop) a creative, SOMA-type feel if you work with the existing structure, which we may," he said, referring to the booming, former warehouse district south of Market Street in San Francisco.
The new owners already have fielded "strong interest" from potential retail tenants, including a gym operator and grocery stores.
"There are a number of grocers who would love to go there," said Steve Tyrrell, a senior vice president with brokerage firm Kidder Mathews, who handled the property sale.
Customers would be able to use the 50 parking spaces now at the site, he said. And any business there could arrange to secure additional parking in the lot just to the north of the property, beneath the freeway.
Tyrrell called the 1.26-acre site a "prominent location" in an area poised for an economic renaissance, with housing being built at The Mill, at Fifth Street near Broadway, and new restaurants either planned or under way in the area. Most recently, Selland Family Restaurants announced it is opening one of its Market Cafes in a building near Ninth and Broadway later this year.
"A lot of people are taking a hard look at Broadway as a place for office and retail" uses, Tyrrell said.
Fathy agreed that the corridor is quickly changing with developments that could mirror those happening on nearby R Street.
"Once you get that critical mass, it can really change the dynamics of a particular submarket," he said.
As for his new property, Fathy said it benefits from excellent visibility, easy access from freeways and nearby neighborhoods along with proximity to light rail.
David Gull, president of the board of the Greater Broadway Partnership, said he is eager to see what Sutter Capital ends up doing there.
"Anything will be better than the fenced-in mess it is now," he said. "It's a major opportunity site," he added. "Half a city block and there are few lots in the central city that large.
"I just hope they go big with it," he said.
Sutter Capital bought the building and land from National Covenant Properties, a faith-based lender in Chicago that acquired it originally for a church and later ended up repossessing it from the backers of the earlier Broadway Lofts project.
The sales price was $2.215 million.
The Sutter team has been one of the area's most active recent buyers of local real estate.
Its other holdings include the historic Ransohoff Building at 1029 K St. in downtown Sacramento, the old Hall of Justice building at 813 Sixth Street and the Retro Lodge offices at 11th and H streets.