SACRAMENTO — Anyone developing 65,000 square feet of retail space would love to tell potential tenants and customers that the new shopping area will be "freeway close"--even if the nearest off-ramp is five congested miles away.
But for two Sacramento men, that boast goes unchallenged. Dain Domich Jr., and George Separovich have just broken ground on Sutter Square Galleria, a 2 1/2-acre shopping center that will be located under, alongside and slightly higher than Interstate 80.
In a precedent-setting arrangement, the state holds a participatory ground lease on the project for 55 years that could see the government realizing $500,000 a year in rental income within a few years, according to Separovich.
The galleria is being built in Sacramento's mid-town area where, two decades ago, the California Transportation Commission plunked down Interstate 80. It bisected this over 95-square-mile city, causing a city councilman of that era--one Dain Domich Sr. to proclaim that one day all of that unused land beneath the freeway would become a thriving marketplace if only some entrepreneurial minds went to work on it.
Near New Hospital
Enter Domich Jr., proving that the son also rises to the occasion.
"Someday, there's going to be a 24-hour community in Sacramento," the younger Domich says. "Within a block of our project is a hospital (the newly built Sutter General) that's open 24 hours. The freeway is open 24 hours. It's as simple as that.
"This project will also do something about all of that talk about bringing people back downtown at night."
Designed Hefner's Club
Sutter Square Galleria has been designed by Beverly Hills-based architect Stanley Felderman, who has designed executive offices for Avco Embassy Pictures, as well as the now defunct private club, Touch, a Hugh Hefner enterprise. Recently completed projects include work for Carte Blanche Corp., Paramount, United Artists, Crocker National Bank, 20th Century Fox, Metro-Goldwyn-Mayer, ASCAP and Le Triangle, a pricey Beverly Hills eatery.
Domich says he and his partner hope to interest a restaurant operator in the structure's top floor, which will overlook the freeway.
The galleria is set up as a European-style pavilion with a two-story garage beneath the freeway.
The partners' arrangement with the state points to a new direction for sub-freeway developments, Separovich says. Under former Caltrans Director Adriana Gianturco, land underneath the freeways was retained to provide for future transportation needs.
With a new administration, state offices, warehouses, storage-locker businesses and manufacturing firms--as well as parking for state employees--have begun to take over many of these parcels.
Developers Get Support
Sacramento's largest daily newspaper has endorsed the project in an editorial, pointing out that air-quality control officials "don't expect the development to be unduly exposed to health hazards from vehicle exhaust overhead. They indicate there's enough air circulation to prevent serious concentrations of carbon monoxide and other pollutants."
Likewise, local businesses and community members--still stung by the closure of a nearby shopping center to make room for Sutter General Hospital's towering new parking structure--have supported the project.
Domich and Separovich hope to create a mix of shops and restaurants, boutiques and markets in Sutter Square Galleria (named for its two-block proximity to historic Sutter's Fort).
Domich says the Caltrans people told him that "George and I are the managers of the project. We choose the tenants, nobody else (does). That's the best part, because it means that we can see this thing through the way we've envisioned it, as a sort of mini-Manhattan, real upscale kind of place."
Separovich anticipates the base rent of $15,000 per month paid to the state will cover the entire project, although gross rents of the property over the years would increase." Retail space will go for about $1.25 to $1.75 per square foot," he said.