Downtown Sacramento is Hit Hard by Coronavirus and Violence. How Does It Make a Comeback?

Navin's Custom Tailors was one of dozens of shops looted on May 30, in downtown Sacramento following protests for George Floyd. Owner Peter Navin talks about the impact of the loss Friday, June 5, 2020, and his plans for re-opening after Covid-19.

Peter Navin was still cleaning shattered glass out of his downtown Sacramento clothing store late last week. People passing by were bringing him neckties, brass buttons and other goods they found strewn on the grass outside.

All the while, the 72-year-old clothier was pondering the future of his business, Navin’s Custom Clothing, and the outlook for his beloved corner of the city.

“Downtown still has a lot to offer,” he said

Four years after the opening of Golden 1 Center sparked a long-overdue revival, downtown Sacramento has been brought to a crisis point by a one-two punch of virus and violence.

In March, the coronavirus pandemic closed restaurants, stores and offices, sending tens of thousands of workers home. The streets filled back up last week, but instead of state workers and concert-goers it was thousands of demonstrators marching against police brutality.

While the protests were largely peaceful, inspired by the death of George Floyd at the hands of police in Minneapolis, splinter groups embarked on two nights of vandalism and theft up and down J, K and L streets. One of the first businesses vandalized was Navin’s little store, tucked away near the Holiday Inn the past 40 years. It lost $70,000 worth of merchandise.

As business owners replace windows and replenish shelves, uncertainty permeates. Which restaurants and shops will survive? What if it takes months for most state workers to return downtown? What happens if many of them continue working from home for good, as Gov. Gavin Newsom has suggested?

“We’re reeling at this point,” said Michael Ault, head of the Downtown Sacramento Partnership business group. He estimated the post-protest vandalism caused $10 million worth of damage. “Businesses are scared.”

Many businesses remain boarded up, lending the area an eerie, empty-canyon feel. And the longer state workers stay away, the more likely smaller businesses may crumble. “You’re hearing that many of the big buildings are not (going to be) fully occupied for the next several months,” Ault said. ”You’ve got a trickle of state workers returning.”

Navin prefers instead to think about the stream of volunteers – perfect strangers – who rushed to help him clean his store. It reinforces his belief that downtown will make a comeback.

“Challenge has never disheartened me,” said Navin, a native of India. “I would love not only to rebuild it to be better, but to be here until the day I die.”

For decades, state workers were the lifeblood of downtown Sacramento during weekdays. Some 71,000 of them work in Sacramento County, most downtown.

The coronavirus sent most of them home, and Newsom’s administration seems to like it that way, at least for the time being. In a directive last week, Newsom’s Department of Human Resources said it expects 75 percent of state employees working from home to stay there indefinitely.

That announcement comes as a third blow, after the virus and the vandalism, to some businesses starving for customers.

Take the area around Cesar E. Chavez Plaza, which borders City Hall and the California Environmental Protection Agency building. Cal EPA normally houses 3,400 employees. Last week, only about 425 were at the office, spokeswoman Erin Curtis.

At La Bonne Soupe one afternoon last week, one table was occupied. “Our patrons are the office workers and the lawyers and the (people on) jury duty,” said owner Edward Stoddard. “Without them and their support, there’s no way to make any profit.”

Telework also figures prominently in Newsom’s long-term plans for state government.

The pandemic “has forced a massive experiment in telework and allowed state managers ... to rethink business processes,” his Department of Finance wrote last month. “This transformation will allow for expanded long-term telework strategies, increased modernization and delivery of government services online, reconfigured office space, reduced leased space, and when possible, flexible work schedules for employees.”

That would create a math problem for businesses that rely on daily foot traffic, Ault of the Downtown Sacramento Partnership said. “More employees working from home, we don’t have customers here to support businesses.”

Even the man in charge of selling Sacramento’s economy to corporations is worried.

As the region’s chief business recruiter, the head of the Greater Sacramento Economic Council, Barry Broome usually bustles around the city in a suit and tie. Last Friday he was in shorts and flip flops, holding court at Foundation Restaurant & Bar at Fourth and L streets near Golden 1 Center.

Broome was on a cleanup crew last week and was taken aback to hear several business owners say they probably wouldn’t reopen. “Of course it was the day after they had their windows smashed and vandalized; maybe they feel differently today,” he said.

Long term, Broome thinks things will work out. “I think the downtown’s going to come back because the trends toward urban life are going to be maintained, but I don’t think we should underestimate how hard we’ve been hit.

“I think it’s going to take two to three years.”

Foundation is one of the few downtown restaurants that have reopened. But Kristine White, Foundation’s co-owner, said her business may be close to the edge.

Her restaurant can survive “possibly a few more months, but not beyond that,” she said, if lunch crowds don’t return and if the shuttered Golden 1 Center doesn’t reopen fairly soon.

The Sacramento Kings announced recently they would furlough a third of their full-time employees, given that they cannot hold games, concerts or other events in Golden 1 Center until coronavirus concerns ease. The NBA is shut down and the Kings don’t know when they’ll be able to reopen the arena for concerts and other events.

The Kings, in a statement to The Bee, say they are “struck by the resilience” the community has demonstrated and remain optimistic about downtown.

The protests hit just as some businesses were finally reopening for the first time since mid-March, struggling with social distancing rules and wondering if customers were comfortable enough to return. Not all restaurants will survive. Those that do will succeedby being creative and adaptable. Many will decrease capacity and move tables to the sidewalk. Some will ask customers to wait outside for a spot.

Randy Paragary, the dean of Sacramento restaurateurs, reopened his namesake restaurant in midtown Friday night a week ago, and diners poured in. He was delighted. That was also the first night of protests in Sacramento. By Sunday, after two nights of vandalism, the crowds had thinned. For a few nights, a city curfew forced him to close at 8 p.m.

Paragary is optimistic the central city will rebound. Short-term, though, he worries. He has a lot at stake. He plans to open a boutique hotel in midtown in October, with a elegant new Cafe Bernardo inside.

“We are all guessing,” he said. “What is the market? What is the demand?”

Rob Wassmer, who directs the Sacramento State University master’s degree program in urban land development, said he has overall confidence in downtown’s ability to recover. But he worries about retailers that could succumb to a triple whammy: COVID-19, damage from the riots, and the increased pressures of consumers shopping online during the coronavirus era.

One other issue, Wassmer said: “Will COVID come back strong in the fall?”

REFORMING DOWNTOWN

So, how should downtown leaders react if the state keeps more of its workers home permanently and coronavirus restrictions remain in place?

The fix for that problem started 25 years ago. Distressed by how vacant downtown was on nights and weekends, then-Mayor Joe Serna Jr. and other city leaders declared the area needed to become a real community with residents and other attractions, not just a place for state workers who go home at 5 p.m.

Several thousand apartments and condos have been built in the last few years in the central city, and more are planned. The city is investing in a bigger convention center, a modern Community Center Theater and a revamped Memorial Auditorium, all of which will draw more people downtown, and have prompted plans for at least four more major hotels.

Perhaps most notably, Kaiser Permanente soon will build a major medical campus in the downtown railyard. A Major League Soccer stadium is planned a few blocks away. In between the two: Upscale and low-income housing is planned, along with new offices suited to young entrepreneurs.

Sacramento has become an investment magnet in the last few years, thanks in part to Golden 1 Center and the city’s push to encourage downtown housing. That luster is not gone, even amid coronavirus and even if the state workforce downtown has been reduced for now.

Architect Ron Vrilakas offers an example: Last month, during the height of the virus, Montreal-based Lotus Equity Partners scanned west coast cities for a housing project, and chose 14th and H streets in Sacramento for a 60-unit housing and retail space.

Vrilakas, the architect for that project, says Sacramento’s core is viewed as a place on the rise, with generally low construction costs and solid economic diversity. “The (downtown and midtown) core has the fundamentals of a good place to invest. It is a good place to be part of the change. The diversity of what goes on in the core is so much more than state workers.”

“The reports of the demise of downtown are greatly exaggerated,” said Councilman Steve Hansen, who represents the area. “One of our priorities was to be less dependent on state workers. We have to continue to diversify beyond our state workforce. Residential housing is critical.”

HOTELS OFFER HOPE, CAUTION

There are signs of life. One big occupant of Downtown Commons has reopened: the Kimpton Sawyer luxury hotel the Kings developed as they were building Golden 1.

The Holiday Inn just west of the mall has also reopened. The Hyatt Regency across from the Capitol is scheduled to reopen June 22.

“We wanted to open, we wanted to get our people back to work,” said Brandyn Hull, a spokeswoman for the Kimpton hotel chain, which runs the Sawyer. The hotel is already starting to see “a steady uptick in bookings for the near future.”

It will be a while before it’s business as usual for hotels. The Residence Inn at Capitol Park, where vandals cracked a lobby window, is just 30 percent full, mainly with traveling nurses and other workers who’ve been deemed essential during the coronavirus shutdown.

Shelly Moranville, the hotel general manager, said she’s worried that corporations won’t be ramping up on travel to Sacramento right away even as the public health crisis eases, meaning hotels like hers, which depend on business travel, will have to work harder to fill their rooms.

She’s hopeful, though. “There’s still business out there. There will be people traveling.”

Her hotel is across the street from the convention center where a multi-million-dollar remodel is expected to conclude in January. That could be a big moment for downtown’s revival.

Visit Sacramento, the city’s convention and visitors bureau, has already lined up 52 conventions for 2021, the most ever, thanks to the expanded size of the new facility. That would refill downtown hotels, and then some.

But that is only if the state’s current coronavirus-based ban on large gatherings is lifted. If not, Sacramento may for months find itself with a brand new and underused convention center.

The current uncertainty appears not to have deterred Eva Hill, a Sacramento developer who has eyes on the corner of Ninth and L streets as a prime location for a new 14-story Hilton Hotel – close to the state Capitol, state offices and the arena. Even after vandals smashed windows on the vacant building currently on the site, and coronavirus slowed state business, Hill’s group said last week it’s still interested, albeit more cautiously.

“Every urban core nationwide has gone through a transformation in the last 90 days,” a representative of Hill’s Venture Oaks Real Estate Group wrote in an email to The Bee. “Given the fact we are handling a global pandemic the likes of which we have never seen before, our feeling is we have weathered a pretty fierce storm to date, with some uncertainty lying ahead.

“Our sincere hope is we move ahead on a realistic timeline with all Sacramento has to offer now, and long into the future.”

Source: Sacbee