Behind the Scenes: Sports Basement Deal Took Timing, Persistence to Happen

Sports Basement plans to opens its first capital-area store in a downtown building late this summer or early in the fall. That day will cap a multi-year effort to bring the retailer to downtown Sacramento.

People involved in the deal, which was signed in August, said it took diligence and patience. But the most important factor, many said, was Sports Basement’s persistent desire to come here.

“They had a lot of carrots dangled from competing urban centers,” said Valerie Mamone-Werder, business development manager with the Downtown Sacramento Partnership. “But they saw this as a really good fit.”

But it was only happenstance that they discovered the space at all. In 2009, broker Ken Turton, then of CBRE Sacramento, thought he had a lease lined up for 730 I St. with a well-known gym. When that fell through, he said, he had to ponder what other kinds of retailers might want a three-story downtown building of about 70,000 square feet.

A year later, Turton was competing in a triathlon in San Francisco when he realized he needed swim goggles. A Google search led him to one of Sports Basement’s San Francisco stores, he said, and he realized he’d stumbled on a potential tenant for 730 I.

Sacramento County owned the building at the time, and had its own broker representative, Steve Cutter of Lockhouse Commercial Real Estate. But Turton said he still liked the idea enough to approach the Downtown Sacramento Partnership about how to make it happen. At the time he pegged the chances of a deal at 3 percent at best.

Sports Basement was interested, though. Dave Rumberg, a partner and real estate specialist for the store, said initial research into the market suggested spots in Davis, Folsom and Roseville. But none fit as well as the I Street location in terms of building, location and soft attributes, he said.

Because the county owned the building, facilities managers had to issue a request for proposals for leases or sales. Sports Basement was the only one to not only reply but include a nonrefundable deposit, said Turton, who now has his own firm, Turton Commercial Real Estate.

But because Sports Basement was entering the market, in an untested location, the lender was apprehensive, Turton said. In early 2013, the negotiating period between the county and Sports Basement expired without a deal.

“It was a combination of things that didn’t line up,” he said, adding Sports Basement at the time also was working on a new store in Berkeley. “But we hadn’t completely given up.” Even if that deal had died, officials with the store, county, city of Sacramento and the partnership all still thought it was a good plan.

Sports Basement’s approach to retail was a reason why. Turton said store managers often will host events such as soccer sign-ups that naturally draws potential customers. And the stores have a slightly casual feel — such as an Urban Outfitters, Turton said — that attracts a certain kind of customer who’ll make the store a destination, thus helping its neighborhood as well.

Turton said Mamone-Werder kept pushing to make the deal happen over the next few months. After opening the Berkeley store, Sports Basement ramped up its attention. Store officials and partners in the deal were able to produce data showing how strong a recreation market Sacramento was, to sway lenders.

As talks got serious again, city and county officials found a way to shorten the process. As typical with any publicly owned building, other public agencies have the first right to purchase it if it becomes available. So to avoid another RFP process, county officials agreed to sell 730 I for about $5 million to the city, which then promptly sold it to Sports Basement.

“Some deals just need a sweet spot in terms of timing,” said Leslie Fritzsche, a project manager with the city’s economic development department. “They came along when we could make the purchase.”

Turton pointed out by then, Sports Basement had not only lost its original deposit with the county, it wasn’t working with a broker anymore. But the store still paid him and Cutter a commission as a sign of good faith.

Rumberg said as much as his store wanted to be downtown, credit should go to the locals who were involved for making it happen.

“If anyone was troublesome, it was us in making this deal work,” he said. And timing has actually made the deal better, with Sports Basement’s projected late summer/early fall opening part of a downtown renewal, he said.

“We see it changing to a more vibrant community that we’ll be part of,” he said.