Status Check: City of Roseville Buys Long-Empty Building
Former Kobra Properties building in downtown has been vacant for years
When Abe Alizadeh’s empire collapsed in 2008, eventually leading to a 56-month federal prison sentence for the developer for real estate fraud, the fate of a large unfinished building in downtown Roseville hung in the balance.
Prior to Alizadeh’s downfall, the fast food mogul had begun constructing a building for his business Kobra Properties at 116 S. Grant St., pulling permits in 2005. When longtime developer Joseph Mohamed bought Alizadeh’s building out of bankruptcy for $6.4 million in 2013, it was only 85 percent complete.
The four story, 56,248-square-foot building was part of a spate of projects and concerted efforts by local leaders and developers to revamp the area, which Comstock’s reported on in its story “Can Downtown Roseville be Revitalized?” in January 2017.
Thankless tasks greeted Mohamed at his new building, including tile falling onto the street, stucco coming off and more. “Every window in that building leaked,” Mohamed told the Roseville City Council during a special meeting Dec. 20.
The council officially turned a new chapter on the troubled building, voting 5-0 to buy it for $10.5 million and to place a plaque on the building in honor of 91-year-old Mohamed and his wife, Shirley Mohamed. Escrow is set to close Jan. 24.
The plaque comes at the request of Joseph Mohamed, who says his ties to Roseville go back to when his family brought him as a baby to visit in 1928. “The place kind of attracted me and as I grew up, I was always friendly to Roseville,” he told the council.
Roseville Councilman Scott Alvord says it was a much-needed purchase. “Because it sat vacant, it kind of gives an impression that … the downtown may not be a desirable place to be, even though we know that’s not true,” says Alvord, who owned a restaurant in downtown, A Dash of Panache, until selling it several years ago. “Having this building occupied finally is going to finally fill up the major, empty eyesore in the downtown.”
It wasn’t the first attempt to buy the building by the city, which has taken an active role in redevelopment downtown. A staff report for the Dec. 20 meeting by Economic Development Director Laura Matteoli notes the city attempted to buy the building in 2016 for $21 million. After Mohamed rejected the offer, Matteoli wrote the city spent $22 million to construct a city hall annex across from Civic Center on Vernon Street.
Some city staff moved to the annex from former Fire Station No. 1 on Oak Street, where a group connected to Angelo Tsakopoulos intended to build a graduate campus for United Kingdom-based Warwick University, which Comstock’s wrote about in November 2016 (“Warwick Sets its Sights on Downtown Roseville”). The city sold the fire station and roughly three acres of creekside land to Tsakopoulos’s group for $190,000 in March 2017, months before that project fell apart with Warwick officials citing financial and regulatory concerns.
Matteoli says the old station is still with Tsakopoulos’s group. When asked if there’s still a possibility of higher education coming to the site, she says, “We’re hopeful, yes.”
Meanwhile, the list price on the Mohameds’ vacant building around the corner kept dropping and finally settled most recently at $12.2 million. “The building had sat vacant, and it’s really hard to get the high, high price when you don’t have the rents coming in,” Matteoli says.
The city will use part of the building to house offices for Roseville Electric. Matteoli says the utility has been at Hilltop Circle for more than 15 years and is out of space. The utility will keep operations at Hilltop while occupying part of the new building. “It’s a more consolidated, front-facing utility billing function,” Matteoli says.
The city plans to lease out the remainder of the space to generate $800,000 a year to repay the building’s purchase cost, which was covered through the Roseville Electric fund for capital acquisition. If all goes as planned, the city could pay off the building in about 13 years.
Among the possible tenants could be a post office relocated from across the street, where local leaders have long spoken of demolishing the Works Progress Administration building to construct a boutique hotel. “If (the city reaches) out to the post office, and the post office chooses to come in there on the other part of the first floor, that would be fantastic,” Alvord says.
Meanwhile, other redevelopments are ongoing around the area, guided by the Downtown Specific Plan the city council approved about 15 years ago. For instance, the downtown has seen an influx of housing. In February 2019, the first affordable housing development in downtown Roseville held its grand opening. Built by Mercy Housing, the Lohse Apartments has 58 units. In addition, Matteoli says it’s possible housing could come in at the former municipal courthouse, which the city deemed surplus property last year.
“We have been working toward redevelopment of our downtown for a very long time,” Matteoli says. “This (building) … sat adjacent to our Town Square, which was a critical component of our city and activity down here.”
