Saturday, March 14, 2009

K Street compromise

Friday, March 13, 2009
Sacramento Business Journal


The issue: The city approved a $5.7 million subsidy for a nightclub/restaurant on K Street despite protests / Our position: The subsidy’s new restrictions should be enough to quell the controversy without killing the project

Sometimes, a compromise is a victory.

And a controversial development on K Street is proof.

A complicated accord, reached during last-minute negotiations, will allow developer David Taylor and the CIM Group to contract with an out-of-town nightclub and restaurant owner to open a bar, gourmet pizza eatery and nightclub. Construction is scheduled to start by the end of April, and the so-called dive bar — featuring mermaids and mermen — and other entertainment-oriented spots could open by the end of the year.

It’s a long-overdue and much-appreciated development for K Street, which has battled eminent domain lawsuits, failed shops and a look-over-your-shoulder feeling. Sure, an arts center, museum or major retailer is a better use of the building, but an entertainment outlet is a huge step forward.

Any development is better than a block of decaying and neglected structures.

The late-in-the-game agreement turned controversy into compromise and is evidence of a let’s-get-it-done attitude under Mayor Kevin Johnson and a revived City Council.

There was anger, debate and, in the end, a resolution. Truly, a great example of the process at work.

Certainly, closed-door meetings created the deal, but it was a public dispute from the beginning, culminating with full-page newspaper ads and media coverage during the final week.

The Sacramento City Council approved the $5.7 million “altered” subsidy for the development, ending a few hours of public comment and dozens of speakers about the project.

Under the agreement, San Francisco nightclub owner George Karpaty cannot combine the business spaces to create a huge nightclub without Council approval, and $2.1 million in funding will be delayed until a tenant is found for the fourth space. A more-than-acceptable agreement, for both sides.

The controversial funding comes from $25.6 million generated from the sale of the Sheraton Grand, another high-profile and much-needed project Taylor powered. Those dollars could be used only for downtown redevelopment, and the bar-pizzeria-nightclub fits the bill. Karpaty and Taylor will combine to invest $5 million in the project.

However, many midtown business owners challenged the city subsidy, saying the entertainment venues would hurt their own struggling operations. It’s an acceptable argument, especially with the dismal economy and fast-declining consumer spending.

But K Street needs development. Now, with the agreement, the on-again-off-again renovation of the often-overlooked street can resume and get “off its knees and back on its feet,” in the words of City Councilman Ray Tretheway. The agreement between the city, the developers and midtown business owners will also help the city stand a bit straighter in the eyes of the community.

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