The future of Downtown Sacramento as businesses open and close amid skyrocketing costs

SACRAMENTO — Downtown Sacramento is seeing more businesses closing as others open. Skyrocketing costs are putting so many out of business and keeping customers away in some cases.

“It’s really tough,” said Takumi Abe, co-owner of Kodiako Ramen and Bar on K Street. “I feel really fortunate that we’re still here.”

Abe said business continues to be steady inside his business, but with the cost of everything going up, it sometimes gets passed along to customers.

“People have been pretty understanding of the price increases,” he said. “People aren’t complaining about it.”

Just a few doors down on K Street, Solomon’s Vinyl Diner abruptly closed down after just hosting a disco brunch for Father’s Day and a paint-and-sip event days before.

The diner was established in 2019 as a tribute to Tower Records and its founder Russ Solomon, which originated in Sacramento.

“It looks like it’s always busy all the time. That’s why I haven’t even had the chance to check it out,” Juan Valderrama, who lives in Sacramento,” said of Solomon’s.

Solomon’s co-owner Jami Goldstene cites the pandemic, a loss of foot traffic, and rising labor and food costs as reasons for what she hopes is just a temporary closure.

On Restaurant Realty, Solomon’s appears to be listed for sale, but Goldstene couldn’t confirm this. She gave CBS13 this response when directly asked about the listing:

“We hope our amazing, iconic space gets a well-deserved second life.”

Chains are also closing, like three Sacramento Starbucks locations within weeks of each other—one in East Sacramento on Alhambra Boulevard, a location in DOCO, and one attached to the Hyatt on L Street.

A spokesperson from Starbucks would not say why the locations closed but said the location in the Hyatt was not a licensed Starbucks location—and, therefore, not its decision to close.

The spokesperson said employees had the option to transfer to other locations.

“I think our businesses in the central city are still defining what a new normal is going to look like,” said Scott Ford, deputy director of the Downtown Sacramento Partnership.

Ford said that over the past 12 months, they have seen more than 31 million visitors to the central city. That is about 80% of what it was pre-pandemic.

“We’re losing foot traffic here and everything,” Valderrama said. “It makes it look kind of ghost townish.”

So what is going to get people to come downtown?

“We are going to need a mix of uses, not just to create a healthy environment that all Sacramentans and our visitors can enjoy but especially for our businesses,” Ford said.

Ford said that even though we see some doors closing downtown, other unique business ideas are opening.

“Traditionally, this was the office district for the region and people haven’t really thought about downtown as a neighborhood to live in,” Ford said.

This re-imagined downtown may come at a greater cost, but Ford said it is worth it.

“We don’t want to price out a lot of the potential customers and guests, but at the same time, we need to cover our costs,” Abe said.

Ford said the social economy has been booming thanks to concerts and Kings games at the Golden One Center.

“We know that there’s unfortunate stories like Solomon’s closing, like Starbucks closing, but we are also seeing entrepreneurs like Ernesto del Gado open concepts like Octopus Peru right here on 9th Street,” Ford said. “That is a ceviche bar.”

He believes Downtown Sacramento is becoming more of a neighborhood to live and work in.

“The reality is the future of Downtown Sacramento, like downtowns all over the United States, is going to be something different than it was pre-2020,” Ford said.