Six months after celebrating the completion of the restoration of Fulton Street in downtown Fresno, there’s a big question that keeps bubbling to the surface among Fresnans: Now what?
City leaders and developers point out that six months is but a mere blip in a recent history characterized by decades of mercantile flight, deterioration and municipal indifference. They urge people to be patient: No one ever promised instant revitalization, even after the city received and spent $20 million in federal and state grants to reopen Fulton Street to traffic. The recovery timeline was always projected in years, not months.
It’s going to be a matter of building owners cleaning up their spaces for would-be tenants, restaurants and merchants moving into those spaces to justify the costs of improvements, and a critical mass of people – residents living in the area and visitors from other parts of the city, region and beyond – willing to come to the district for a renaissance to have any chance of taking hold.
“The day I spoke at that (October re-opening) event, I said, ’10 years from now, history will be our judge,’ “ Fresno Mayor Lee Brand told The Bee. “I’ve been in real estate and development for almost 40 years, and things don’t happen overnight.”
“In another six months, people are going to say, ‘It’s been one year; what have you done?’” Brand added. “It takes a while. … Market forces will determine it. I can’t wave the City Hall magic wand and make things happen. … Things are moving forward, but I caution, don’t be impatient. These things take a while to develop.”
Biding their time
When it comes to plans for their own historic and high-profile properties on Fulton Street, developers are moving at different paces depending on their own tolerance for risk versus reward.
But Los Angeles developer Sevak Khatchadourian, who bought the former Security Bank building at the intersection of the Fulton and Mariposa malls in late 2011 and renamed it the Pacific Southwest Building, and Tom Richards, a Fresno developer who bought the Bank of Italy building at Tulare Street and Fulton nine years ago, both said reopening Fulton Street was imperative to breathe new life into the district – but was never considered a quick fix.
“I didn’t think that on the second day after opening the street … we were going to see a lot of changes right away,” Khatchadourian said. “Realistically, we need to give it some time.”
Richards discounted skepticism in some quarters over Fulton’s importance to downtown. “It was far more than ‘better than nothing.’ It was a very important first step,” he said. It would be impractical, however, “if anybody thought this was going to be a magic pill and turn everything around in short order.”
“It took 40 or 50 years to get to this point,” Richards added. “It’s not going to change overnight. Don’t get discouraged. Embrace it and participate, and that’s what’s going to change it.”
Rick Roush, a Fresno financial adviser, is versed in patience when it comes to embracing Fulton Street. He bought the eight-story T.W. Patterson Building, at Tulare and Fulton streets, in 1994 when he and some partners brought the Fresno Grizzlies baseball team to town. “I got behind Grizzly Stadium and tried to get behind renovation of downtown by putting my money where my heart was,” Roush said.
Revitalization, he added, takes time. “It takes love and passion and it takes everyone to believe we need a good downtown,” Roush said. “If you’re looking to come down and pick up a piece of property for $1 million and sell it for a million and a half, don’t come down here.”
Roush ticked down a list of developers, including Khatchadourian, Richards, Will Dyck and Ed Kashian, who own or are revitalizing old downtown buildings on or near Fulton.
Who owns what on the former Fulton Mall?
There are 49 separate pieces of property along the six-block stretch of the former Fulton Mall that reopened as Fulton Street in downtown Fresno. Click a marker on the map above to see details for that parcel. Markers are green for local ownership, red for out-of-town ownership, and yellow for government-owned properties. Map: Tim Sheehan / The Fresno Bee.
Before Khatchadourian bought the 16-story Security Bank building, the previous owner had already undertaken plans to renovate the lower floors for offices and convert the upper six floors into as many as 20 upscale residential lofts. But only six lofts were completed before the owners defaulted on a $4.5 million loan and a bank foreclosed in May 2011.
Khatchadourian has continued to work on improvements. In addition to a large ground-floor ballroom and a basement recreation area for tenants, he established Workspace, a two-story collaborative working area with open workstations, offices and conference rooms available to entrepreneurs on a membership basis. Four floors of lofts are completed and leased, and more are under construction. The Fresno County Office of Education’s technology department took over the entire sixth floor in late January. A group of attorneys will soon be moving into another full floor of the building.
Khatchadourian said he’s in negotiations for a second-floor rooftop bar atop the ballroom, and he’s also in the preliminary stages of planning to recast the two uppermost floors as a restaurant and lounge.
Opening Fulton Street seems to have sparked greater interest in not only the Pacific Southwest building, but also in ground-floor retail storefronts in the nearby Helm Building, which Khatchadourian bought in 2012. “All I can say is that our calls have not doubled, not tripled, but quadrupled,” Khatchadourian said. “People are wanting to open bars, people wanting to open coffee places. I’m seeing a lot of creative minds, and that’s the beauty of this. … It gives big hope to all of downtown.”
For the upper floors of the Helm Building, Khatchadourian said he wants to see how things shake out when he’s finished with the Pacific Southwest building before deciding to develop them as offices or lofts.
In nine years since Richards bought the Bank of Italy building – the only Fulton Street property on the National Register of Historic Places – it has remained empty, awaiting commitments from enough lease tenants to make it worthwhile to undertake the expensive and extensive work needed to bring the 100-year-old edifice back to life as an office building. Reopening the street has made that more likely now than at any time since Richards bought the building.
“People are interested. We’ve come close three different times and we’re working on something right now that I’m encouraged by,” Richards said. “It’s not for the entire building, but about half of it, which from my perspective is enough” to begin moving ahead with plans for renovations that will cost millions of dollars.
“The timing is right,” he said, adding that his natural instinct would be to wait until he has agreements to lease two-thirds of the building. “It’s an expression of my confidence in how right it was to open Fulton Street.”
Richards recalled coming from Santa Barbara, where he was living in the mid-1970s, to Fresno where he was doing business, and being impressed with what the Fulton Mall still was at that time. Major department stores such as Gottschalks and J.C. Penney, and upscale specialty clothing stores such as Coffee’s, were hallmarks of the mall. “I was running on the mall and all the stores were there and I thought, ‘Wow, how great this is.’ It was one of the reasons I really got attracted to Fresno while I was still living in Santa Barbara.”
“All we’ve seen since then is deterioration” on Fulton, he added, addressing the flight of major retailers to shopping centers in the ever-expanding northern reaches of the city.
When Roush bought the Patterson building, which was built in 1923, there were few tenants and lots of maintenance needed. Cardboard boxes were used to divert and block air through the building. The roof needed repairs and a new paint job. The first two years, the cleanup crew would chase homeless people out of the building, Roush said.
Downtown failed to flourish in the 1990s as Roush had hoped. He and his partners sold the Grizzlies in 2005, but Roush kept fixing up and restoring the Patterson building where he would open his own firm, Roush Investment Group, and provide office space for others. The total cost: about $3 million.
Now the Patterson building is nearly full with a few remaining spaces that could accommodate a business needing up to 4,000 square feet of space. The ground floor restaurant spaces and mezzanine are empty, but Roush is in negotiations for a restaurant tenant.
Sitting on the sidelines?
As major retailers moved north from the Fulton Mall, so too did much of the the investment interest that will be vital to whatever improvements are required on Fulton Street. “What’s necessary is to have more capital, and not only in terms of dollars,” Richards said. “It’s business people and entrepreneurs with commitment and good ideas that cause people from other parts of the community – and outside our community – to follow them.”
Investor willingness has been a problem for Shay Maghame, who told The Bee that he’s been unable to secure the financing he needs – up to $60 million – to restore the old Radin-Kamp department store building (later the J.C. Penney building) at the southwest corner of Tulare and Fulton streets. Maghame’s company bought the building in 2013 with plans to establish retail stores on the ground floor with residential apartments on the upper floors.
“We haven’t even been able to get pilot money on this,” Maghame said. “The banks are kind of hesitant to lend money for projects in downtown Fresno. It has been a challenge.”
Now, with would-be tenants expressing greater interest in Fulton Street, the thinking – or hoping – is that lending for improvements will follow.
Khatchadourian said it’s up to building owners to seize on that renewed interest. “There are some passive developers and there are some active developers. The passive developers are still sitting, not doing anything,” he said. “The active developers are the ones who are pursuing those phone calls; they’re making business out of these calls.”
Contrary to some chatter about “out-of-town” landlords who are sitting on properties rather than sprucing them up for tenants, only 14 of the 49 properties along Fulton between Inyo and Tuolumne streets are owned by interests outside the Fresno-Clovis area. Eight are owned by local government agencies such as the city’s Redevelopment Successor Agency or Fresno County. The local private owners include family partnerships, limited liability corporations and family trusts which, in some cases, may not have the ready cash – or cannot get the necessary financing – to repair or restore their buildings.
Brand said he hopes to “nudge” property owners into being more active in trying to make their properties more attractive to tenants rather than sitting on an investment in hopes of someday selling for a profit.
“You get people – and I can’t blame them – who buy the land, they speculate that the high-speed rail station is going to come, so (they think), ‘I’ll sell it in five years and make a lot of money,’” Brand said. “I don’t want people to get in and sit on it and wait for the market. They’ve got to take some initiative.”
Bringing people back
An important aspect of attracting investment and business will be to attract people – enough potential clientele to make it worthwhile, Brand said. “I’d like to see a Yosemite Ranch (steakhouse) down there; I’d like to see a Sal’s Mexican Restaurant down there. I’d like to see retailers down there,” he said. “All the amenities that you find in north Fresno, we’d like to see that downtown. And to do that, we have to make it more attractive.”
But it does present a chicken-and-egg scenario: What comes first, the amenities or the people?
“No. 1 is getting more people living downtown, not in affordable housing but in open-market rate housing, people with disposable income,” Brand said. He pointed to Khatchadourian’s lofts, plans for a mixed-use commercial/residential building by developers Mehmet Noyan and Terance Frazier on Fulton behind Chukchansi Park, and more than 450 apartments and lofts across a dozen residential projects by developer Darius Assemi and the Assemi family in and around the Cultural Arts District a few blocks north of the former mall.
“A lot of younger people love downtown; they can walk the mall, go have breakfast someplace, go pick up shirts” Brand said, referring to the clothing and department stores that once populated the Fulton Mall.
As major retailers abandoned the mall, however, “it’s turned in recent years to more of an ethnic flavor,” Brand said of many current Fulton business tenants. “There’s probably still a market for that. I’d like for those people to be successful, too.”
A more diverse Fulton Street business environment could also help keep the thousands of local, state and federal government employees who work in downtown in the area after 5 p.m., Richards said. “These are people who are making pretty good wages, and as you keep improving the offerings (on Fulton), it can encourage those people after work to say, ‘Well, let’s just stay down here and have dinner; we don’t have to drive somewhere else to eat.’”
Scott Anderson, vice president of Richards’ Penstar Group, agreed. He compared Fresno and its distinct business districts – north Fresno, the Tower District, southeast and downtown – as different pieces of a patchwork quilt. “What I see in downtown, and specifically Fulton Street, is something that could develop into a really neat piece of the patchwork,” he said. “If you’re up north, (you might say), ‘Hey, let’s get a little different flavor of the city and head downtown, hang out and get something to eat, and see some unique shops.’”
Roush suggested that even more will be needed to attract and keep people downtown for the long haul: “We need universities to have satellites down here. It takes a transit system to take people to and from.
“You can only believe that (revitalization) finally is here after 20-plus years (of saying) that it’s going to happen and it is happening.”
Fulton Street’s historic character
Fifteen properties along Fulton Street in downtown Fresno, in or near the six-block stretch of the former Fulton Mall, are included on the city of Fresno’s Local Register of Historic Resources (denoted by red markers on the map above). Click a marker to see details of that site. Map: Tim Sheehan / The Fresno Bee