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Site Sold for Broadway Project, With Changes

Site Sold for Broadway Project, With Changes

Sacramento Business Journal
By Ben van der Meer | September 22, 2020

One of the most obvious development sites on Broadway in Sacramento has sold, though the plans for it have changed slightly.

Escrow closed this month for the 1.25-acre property at 1901 Broadway, bought by affordable housing developer EAH Housing for $5.6 million.

“This land purchase cements EAH Housing’s collaboration with the City of Sacramento to develop On Broadway Apartments, a community-building initiative that advances the economic revitalization goals envisioned for the Broadway Corridor,” said Scott Johnson, director of business development with San Rafael-based EAH, in an email.  “EAH will transform the property into a mixed-use, green-certified, Transit Oriented Development (TOD) combining permanently affordable housing, neighborhood-serving commercial space, public mobility and transit improvements.”

Burke Fathy, a managing partner with selling entity Sutter Capital Group, said his group also supports the development of more affordable housing, and with the site a stone’s throw from a light-rail station, the project should be a positive addition to the Broadway corridor.

“We were pleased to support EAH’s development of the project via our willingness to provide a longer than typical escrow period allowing them time to procure preliminary entitlements and importantly determine a feasible capital structure for the project,” said Fathy, in an email.

Last month, San Rafael-based EAH Housing got city approval for a project at 1901 Broadway called On Broadway, with 140 affordable housing units in two five-story buildings with ground-floor commercial space.

However, the approved project was different from what EAH submitted earlier this year, a six-story project with 150 units. That version also had 1,700 square feet of ground-floor retail doubled to 3,500 square feet in the approved version. Other changes included creation of green space between the two buildings. City comments and other input prompted the changes, according to the revised application with the city.

Johnson of EAH said they’re aiming to start construction of On Broadway in the fourth quarter of 2021. The project, estimated previously at about $70 million, would open to residents about two years later.

Jason Parr and Scott MacDonald of Cushman & Wakefield represented the seller in the deal.

For Sutter Capital, the sale of 1901 Broadway is the second time in the last two years the group turned a profit on a property without doing much of anything with it. Sutter Capital acquired 1901 Broadway in 2016 for $2.215 million, then explored redeveloping the site with retail uses, though those plans never got much further than conceptual.

Last year, the Sacramento-based group sold a development site at 1500 S St. in Sacramento to Anthem Properties for $5.1 million, after buying it in 2017 for $2.9 million. Anthem is planning a market-rate apartment and retail project at 1500 S St., near the R Street Corridor, a hot development area.

Sutter Capital has redeveloped or reinvigorated leasing at other properties it owns, such as the former Hall of Justice in Downtown Sacramento and The M.A.Y. Building on K Street Downtown.

*Homepage image of On Broadway is courtesy of LPAS Architecture & Design