This story is part of the 2013 Redefining the Core special publication. Click here to view the other stories.
When construction workers put the finishing touches on the state Capitol in 1874, the road leading up to it from the Sacramento River was simply called M Street.
Lined with nondescript warehouses, apartments, homes and shops, M Street was not a grand boulevard any more than neighboring K or L streets.
So it remained for about 50 years, until the California government outgrew the Capitol. In 1928, the state built twin buildings across 10th street for a library, courts and offices. Flanking a roundabout with a fountain at its center, the new state buildings created the first artistic framing for the Capitol’s west entrance.
But it took until the 1950s before Sacramento turned M Street into Capitol Mall. The move didn’t come without controversy.
Back then, with no Interstate 5 slicing through town, there was no sharp border between the areas we now call Capitol Mall and Old Sacramento. It was all the West End, and it was in sad shape.
Physically, the area covered 8 percent of the city and housed about 8 percent of the population. But it accounted for 42 percent of the adult crimes and 70 percent of the tuberculosis cases, according to city historian Marcia Eymann.
What better way to solve a civic problem and create a grand entrance to the city than to scrape it all away and replace it with a wide boulevard and grassy median?
The 10-block stretch from the riverfront wasn’t all blight, though. As in many other American cities during the 1950s and ’60s, urban renewal meant tearing down the places where ethnic minorities lived and worked. Part of what we now know as Capitol Mall was Sacramento’s Japantown.
“The first part of redevelopment cut it right down the middle,” Eymann said. “Most of those people were just settling back in after being relocated after World War II.”
So what buildings went up as others were torn down? The state Employment Development Department building at 8th Street arrived in 1955, as did the five-story State Personnel Board building. The private sector began filling the rest of the space to the river with steel and glass towers. The now-defunct Sacramento Union built 301 Capitol Mall in 1967. Office towers went up at 455 Capitol Mall in 1969 and at 555 Capitol Mall (now called Plaza 555) in 1970.
The 1980s brought more flash, more glass and more height, starting with the 16-story Emerald Tower at 300 Capitol Mall, built in 1984. The 1990s brought the 30-story Wells Fargo Center at Fourth Street, and the 25-story Capitol Square across N Street. The past decade added the 25-story U.S. Bank Tower in the 600 block and the 25-story Bank of the West Tower in the 500 block.
Meanwhile, the state concentrated its upgrades on the Capitol itself and the blocks immediately to the east. The Capitol got a $68 million renovation that took six years, ending in 1982. The $392 million East End Complex created 1.47 million square feet of state offices in five new buildings. That project wrapped up in 2003.
Each time a new office tower goes up on Capitol Mall, landlords start warring for marquee tenants. Large law offices have used the competitive atmosphere to upgrade, either by moving or negotiating a better deal where they already are.
“A Capitol Mall address is the address to have,” said Nico Coulouras, director of asset management for property owner Hines. “All owners are going to be chasing the same deals specific to their markets. Quality always wins out.”
Not surprisingly, Coulouras rates the best of the lot as the two addresses Hines has on the mall: 300 and 400.
While the Emerald Tower at 300 Capitol Mall is approaching its 30th birthday, Hines has made sure it hasn’t lost any luster. It won an award as outstanding building of the year from the Building Owners and Managers Association International in 2010.
As for Wells Fargo Center, he noted that it had no trouble filling up when it opened while a building just across the freeway at 1 Capitol Mall struggled. He knows because he was the one charged with filling up the latter tower, which is physically more a part of Old Sacramento despite its street address.
Not every landlord needs — or is willing — to play the game of courting star tenants, however. One holdout is William Dawson, whose Monterey and Great Pacific Corp. bought 455 Capitol Mall in 1979. At one time his tenant list included the Sacramento Chamber of Commerce and one of the largest law firms in town, Diepenbrock Wulff Plant & Hannegan. Then the law firm bought an interest in the Emerald Tower.
“That was the first big tenant that we lost. And I resolved at that point that we don’t want big tenants any more. We want small guys,” Dawson said. “Large tenants have huge leverage in negotiation and in servicing. You’d better offer them the best rate and you’d better not bring in a competitor.”
In the early 1980s, Dawson had 18 large tenants. Now he has about 40 small ones using the same amount of aggregate space.
“What we’ve seen is these large firms, even the accountants like PriceWaterhouse, we see the talent that feels they are not being treated fairly, take a client or two and come to us,” he said.
Despite the competitive location, there are several vacant parcels along Capitol Mall. One belongs to a project that never got off the ground — The Towers on the old Sacramento Union site at 301 Capitol Mall. Proposed by developer John Saca, the project would have added more than 800 condominiums in two 53-story residential towers, plus a 200-room hotel.
The property is now owned by the California Public Employees’ Retirement System. The general consensus is that it will be developed, but no one is predicting when.
There’s also been discussion about development of the parking lot next to the U.S. Bank Tower at 621 Capitol Mall. Although much of the talk has revolved around a possible hotel, property owner David Taylor has said that the lot is entitled for three different types of uses: office, residential and a hotel. His company, he said, is still mulling over all the options.
One area that is getting attention now involves Interstate 5, which is both a physical and psychological barrier to pedestrians.
“Right now when you walk across the freeway, it’s busy, it’s noisy, it’s yucky,” said Liz Brenner, administrator of the Old Sacramento Historic District. The city is working on a Riverfront Reconnection project, which aims to start construction next year. Plans include a new bridge to bring N Street over the freeway to Front Street, and to reconfigure Front Street so that it intersects with Capitol Mall instead of ducking under it. Some extra landscaping may help mitigate the freeway noise.
“The goal and vision is to make the Capitol Mall pedestrian traffic more pleasing,” she said.
In an effort to spruce up Capitol Mall, two years ago the city of Sacramento teamed up with the local chapter of the American Institute of Architects to hold a design competition. The winning proposal called for planting hundreds of native trees along Capitol Mall and creating a riparian river walk, a sculpture park and a lawn to be used as a venue for concerts and other gatherings.
Although the winner won $20,000, nothing materialized from the design notions.
“They came forth with a number of very cool ideas, but we have not had the resources to continue to cull through the great ideas and come up with a project. So that one is on hold,” said city spokeswoman Linda Tucker.
What’s not on hold is the lure of a Capitol Mall address.
“I don’t think you’re going to see the types of tenants locating on Capitol Mall changing that much. It is arguably the region’s premier Class A office address, being as close as it is to the Capitol,” said Michael Ault, executive director of the Downtown Sacramento Partnership.
That address is likely to become even more of a draw with the construction of a new sports and entertainment arena on K Street.
“You are going to see more retail. You are going to have more restaurants. It is going to be such a lively experience around the arena that it is going to have such a positive effect on downtown as a whole,” said Nico Coulouras, director of property management for property owner Hines.
“The parking transition is going to be huge downtown,” he said. “Our tenants have a right to park 24-7 if they pay their monthly parking fee. That is going to have to change. Our tenants are going to have to be restricted so that we can somehow accommodate the event parking market. Maybe we have to build a parking garage. Maybe we have to charge on the surface lot that we have.”
Another idea is to turn that surface lot into a sports bar on event nights.
Several blocks away, on 3rd and N streets, the Kings new ownership group owns a parcel, one of several downtown properties it acquired as part of the Kings deal. Nothing specific has been proposed for that parcel yet, however.
Ault of the Downtown Sacramento Partnership cautioned that it’s important to think beyond basketball.
“A lot of the discussion is Kings, Kings, Kings, and I get that, but there is a lot more than basketball that comes into the facility that brings families down,” he said. “There are some ground-floor vacancies that could take advantage of those uses. The opportunity people have to be seeing is not just what is here now, but how would my cafe, that is open now from 10 to 3, benefit from being open later.
“People are going to need to raise their game.”