A little more than two years ago, Sacramento’s core suffered a nasty one-two punch. COVID-19 and the March 2020 lockdown removed about 100,000 state workers who poured into the central city each day. Suddenly, they were working at home—many still are—while many restaurants, bars and other small businesses depending on them collapsed.
Throw in the late-spring and summer of sometimes violent protests over the murder of George Floyd and other outrages, and the central city became a ghost town by day and frequent crime scene at night. What finally seemed like a Sacramento renaissance months earlier dissolved into a sad, depressing mess.
Jump ahead to a hot evening this past July with several hundred people at an open house celebrating the new Mansion Apartments at 15th and H streets. The mood has shifted.
“Better days are ahead of us, in a big way,” says Sotiris Kolokotronis, whose SKK Developments built the Mansion Apartments and about 1,150 apartment units in the area over the past four years. “All the state workers are not back and that’s important, but this is not the first or last time in the history of civilization we’ve had a tough situation like this.”
Kolokotronis is known for his optimism, but he’s betting more than good cheer on the central city’s comeback. His company, now a family affair with daughter Marisa and son Constantine playing key roles, has been riding an impressive string of successful projects.
He has another 500 to 600 apartment units in various planning stages in the core city. Several projects could begin construction this year.
“The city will be different,” he says. “That is still playing out, but institutional investors and smart money that were not coming to Sacramento a few years ago are coming now and that it is very good.”
Nellie Cruz, an associate at CBRE, the leading Downtown commercial real estate broker, said her firm initially expected the pandemic to result in companies moving from the central city to suburban locations.
“We have seen some of that,” she says, “but we are seeing a lot of activity in the core.” CBRE recently brokered a deal with a tech company leasing 20,000 square feet at 621 Capitol Mall, and is tracking about 1,000 residential units under construction in the core.
While rising interest rates and construction costs could slow things down, CBRE sees strong demand from companies that want to be in the center of Sacramento.
One of those is Anthem Properties Group of Vancouver, British Columbia. It has several projects underway, including a mixed-use building at J and 9th streets, long an eyesore.
“Work from home is here to stay, but I think to a degree much less than we think right now, at least in the long run,” says Riaan De Beer, Anthem’s vice president for development.
“In the end, people being able to interact face to face informally around the water cooler, down hallways, is part of the greater energy that makes companies work and business work. It makes government work for that matter,” De Beer says. “Being able to go out to a lunch together and do a business meal. Those things are entrenched in our government and business culture. It will come back.”
I tend to agree. Skeptics have predicted the demise of cities since the beginning of time. They take their hits, new ones emerge, people and businesses adapt, and cities find different ways to make themselves appealing. Look at the streets teeming with people in Midtown and Downtown and all the construction and you might not know what we have endured.
We have plenty of challenges, but the socio-economic and demographic forces that fueled the city’s renaissance haven’t disappeared. They were on hiatus. Smart people and smart money are betting a comeback is underway. Here’s hoping they’re right.
Gary Delsohn can be reached at gdelsohn@gmail.com. Follow us on Facebook, Twitter and Instagram: @insidesacramento.
