Broadway’s Slow Transition

A decade ago, commercial real estate and development experts tabbed Broadway in Sacramento as “the next R Street,” shorthand for an urban corridor likely to see new investment, development and redevelopment over the next few years.

Since then, some of Broadway has definitely changed. Look no further than the intersection of Broadway and 16th Street/Land Park Drive, where on two corners stand new retail or residential/retail development, and nearby a long-empty bank building has become a second site for a popular swim school.

But even boosters for Broadway, like Tower District Executive Director Joan Borucki, acknowledged that progress has been uneven.

“The city put money into Complete Streets here, and now we have to give them a reason to come and stay,” said Borucki, speaking of the city’s effort to make Broadway more amenable to visitors by expanding sidewalks and reducing traffic lanes from four to three, among other components. “The thing standing in our way is the cost to develop.”

Borucki’s organization, renamed in the last decade for the historic Tower Theatre building on the southwest corner of 16th and Land Park Drive, is the property business improvement district for Broadway and X Street. The district’s footprint is the section of those streets from Third Street on the west to 28th Street on the east, just before Broadway juts south into the Oak Park neighborhood.

Progress on Broadway seen over a decade

In 2015, many experts pointed to the city’s plans for Broadway Complete Streets as a reason for optimism for the corridor, as private dollars often follow public ones for reinvestment.

Although Broadway Complete Streets didn’t get underway until 2023, buyers with a vision didn’t wait. Jon Gianulias, a commercial real estate broker and member of a longtime Sacramento family in real estate, filed plans in 2020 for his five-story, 53-unit project on the southeast corner of 16th and Land Park.

“We have owned our site since 1943 on the east side where the bookstore used to be, so we just have a lot of history with our property and believing in the area and how it transitions from Land Park into downtown,” he said in an email.

Gianulias’ project had some detractors because it involved tearing down an existing building at the corner that was one of the first locations of the iconic Tower Records chain. Now set for completion in early 2026, Gianulias’ project will also have 14,000 square feet of retail space.

Since 2015, other parts of Broadway have also seen new investment:

Those ground-up developments came in addition to new tenants in existing spaces along Broadway, including Sunh Fish buying and moving into 1309/1313 Broadway, Little Whale Swim School turning the Pappas Investments-owned former bank at 1331 Broadway into a new swim school and School of Rock buying a former Walgreens at 1401/1429 Broadway for a new music school location.

But Borucki and Scott Kingston, a commercial real estate broker with Turton Commercial Real Estate who’s on the Tower District board, acknowledged Broadway has seen some setbacks as well.

Midway through the last decade, the Covid-19 pandemic chilled economic activity for months, especially affecting restaurants that counted on dine-in service. Eateries along Broadway were no different, with the casualties including China Buffet.

Borucki said perceptions hurt as well. With its proximity to Highway 50 and panhandlers at intersections and off-ramps from the freeway, a visible population of people without housing began to affect the area’s reputation.

To counter that, Borucki said, the district last November hired new security and worked with the Sacramento Police Department to crack down on quality-of-life issues like public drug use and dumping.

Since then, she said, the number of reported crimes has dropped to zero. “It’s a significant difference,” she said.

Kingston said that without the perception of a clean and safe environment, city investments like Broadway Complete Streets go to waste.

“I would bet block by block, Broadway is the safest part of the city,” said Kingston, whose commercial real estate firm is working to find tenants for both Gianulias’ project and adaptive-reuse project Marketplace at Mill within The Mill at Broadway.

If Broadway has turned the corner on the perception issue, though, other challenges persist. As a result of the pandemic, the global economy saw supply-chain constraints that started a spike in costs, in turn causing interest rates to rise. That’s filtered into real estate development in the form of both higher costs to build and borrow money.

Kingston said the cost to build, cost to borrow and rents on the back end are the three determinative factors for commercial development and investment on Broadway or most anywhere.

“There’s also the question of what you can sell it for,” he said. “Those factors are very difficult to make work right now no matter where you’re at.”

Belief in the future of Broadway, and opportunity sites

Even with those challenges, Borucki and Kingston said they both believe Broadway is on the path to fulfilling the predictions made a decade ago.

In particular, Borucki said, there are several sites where redevelopment is planned or likely. At 2701 Broadway, the city has plans for a five-story, 31-unit project on the site of a closed Subway restaurant, delayed by construction costs.

The closed China Buffet restaurant on Broadway has potential interest from investors who would redevelop the site, she said. But that and other locations have another hitch that’s long bedeviled Broadway in seeing new investment: longtime ownership with one family.

Some families are loath to sell a property that’s been in the family for generations and sometimes housed a long-running family business, even if there’s no tie anymore other than ownership.

For the former China Buffet site, Borucki said, family members inherited the property but are still trying to decide what to do. “There’s no lack of interest,” she said. “That is one of the challenges we have. Most people want to come in and build bigger projects.”

More than three years ago, the city received an inquiry about a traffic study for what might be one of the most transformative projects on Broadway since Mill at Broadway.

At 2110 Broadway, the Broadway Village proposal called for about 600 residential units, a grocery store and other retail space across six multistory buildings.

The Catholic Diocese of Sacramento owns the 6.79 acres that constitute the proposed footprint for Broadway Village. Though the city hasn’t received any formal application for the project, Borucki said she believes it’s still being conceived.

A message left with the diocese’s communications department wasn’t returned.

Broadway Complete Streets isn’t done, either. The section of Broadway from 19th to 21st and 24th to 29th streets should get under construction and be completed next year, said city spokeswoman Gabby Miller.

Borucki said the first phase was done so quickly and painlessly, she didn’t hear any complaints from current building tenants. So she’s eager for the second phase.

“What we’ve done is bring everybody together and say, ‘let’s work toward the same thing,'” she said. “I feel like we’ve gotten back to where we were just before the pandemic.”