City of Sacramento to buy K Street building to settle lawsuits. Will it be used for homeless?
A costly eight-year legal saga between the city of Sacramento and developer Paul Petrovich is finally complete.
As part of a new settlement agreement signed last week, the city has agreed to purchase a K Street building from Petrovich for $18.5 million, and then pay him an additional $7.5 million.
City officials are not yet saying what they plan to do with the building at the corner of 9th and K streets, but it appears possible they would use it as a homeless shelter.
A December agreement between the city of Sacramento and Sacramento County includes a first-of-its-kind commitment in which the county would operate a new 200-bed shelter in city limits if the city provides a “shovel-ready site.”
Eight months later, local officials still have not announced a “shovel-ready site.” But the three-story, 19,000-square-foot K Street building will be vacant by the end of March, according to the settlement agreement.
The lawsuits largely centered around the city barring Petrovich from building a gas station in his Crocker Village residential and retail development in Curtis Park.
A state appeals court ruled in 2020 that the city denied Petrovich a fair hearing on the gas station. That ruling now serves as precedent for establishing thresholds for personal bias in California, the settlement said.
In addition to the $26 million in the settlement, the city has spent at least $2.3 million in legal fees defending itself against the lawsuits.
In addition to buying the building, the city agreed to name an open space inside the Crocker Village park the “Petrovich Family Playfield.” The council voted in 2019 to name the park Ray Eames Park instead of Petrovich Family Park, against Paul Petrovich’s wishes.
The atypical settlement also included a written apology from the city.
“The city apologizes to Mr. Petrovich for conducting an unfair hearing (on the gas station),” the settlement document said. “The city further acknowledges Mr. Petrovich’s contentions in his lawsuit that following the denial of the conditional use permit, he believes the Crocker Village project faced significant unfair treatment, which he asserts severely negatively impacted his health, family, reputation, and business. While the settlement expressly provides that the agreement shall not be considered an admission of liability or responsibility, the city nonetheless regrets the deterioration of the decades long positive relationship Mr. Petrovich had with the city prior to the litigation.”
