A hole in the middle

Channa Clark should have known her neighbor’s red, white and green PT Cruiser meant the neighborhood was changing. Clark, who manages American Graffiti Tattoo on 19th Street near Capitol Avenue in Midtown, noticed that the newcomers—khaki-clad representatives of the Krispy Kreme Doughnut Corp.—seemed a little out of place. “They really weren’t the friendliest people. But they brought us doughnuts when they first moved in, which was OK,” Clark said.

Two years ago, when Krispy Kreme began leasing an office space upstairs from New Helvetia, Clark’s favorite coffee shop, she had no idea what the presence of the doughnut people foretold.

But just last week, she learned that New Helvetia is being evicted at the end of March. To make matters worse, for Clark and others who cherish the cafe, Krispy Kreme is making a bid to take over the whole building to expand its Northern California headquarters, and the company ultimately may use the historic structure as a storefront to peddle its corporate confections.

“The whole thing that attracted me to Midtown was that it wasn’t so mainstream and corporate. I’m afraid we’re going to lose what little character is left down here,” Clark lamented.

New Helvetia, and the building it occupies, certainly lends character to the neighborhood. The two-story, red, brick building was one of Sacramento’s first firehouses, built in 1893. The fire department’s logo is still prominent on the facade, and the outlines of old firehouse doors—through which firefighters used to park their horse-drawn pump engines and ladder carts—are still apparent, though they have been replaced by windows.

Inside, the original brick walls are still exposed, accented here and there by the little items—axes, helmets and Dalmatians—that go with the firehouse motif. But much of the wall space is devoted to an ever-changing and eclectic collection of paintings by local artists.

In the late 1980s, though, the firehouse was just one of several garbage-filled and dilapidated abandoned buildings in the area—a shooting gallery in fact.

“This is where people used to do heroin,” said Tiffany Walker, a New Helvetia employee who is now looking for a job. “And that’s where people use to do crack,” she added, pointing to the laundromat across the street. She said New Helvetia was a sort of pioneer, one of the first shops to take a chance on the gritty, crime-ridden area. The cafe began to do brisk business, and other shops started moving into the formerly abandoned buildings. By day, New Helvetia was a popular spot for the office workers in the area, and in the evenings it became a gathering place for Sacramento’s younger gay and lesbian crowd. “That’s why I came down here,” Walker explained. “I was in high school in Rocklin, not the most gay-friendly place. I wasn’t going to go to bars, and I heard that it was a safe place to hang out.”

The neighborhood’s fortunes increased. New Helvetia owner Jane Macaulay and her business partner at the time opened another cafe in Curtis Park (now Café Melange). But it wasn’t long after shops like New Helvetia proved that there was money to be made in Midtown that the chains began to circle, sniffing opportunity.

“Things really slowed down around 1995,” said Macaulay. That was around the time that a cluster of chain stores, including Starbucks, moved in a few blocks north on J Street.

Still, loyal customers remained, and the café expanded its menu, began offering breakfast and managed to shuffle along. But others started to falter, such as Greta’s restaurant, which came to the area at around the same time as New Helvetia. Just down the block from New Helvetia, Greta’s is now a Chipotle burrito store, a chain restaurant owned partly by the McDonald’s Corp.

Two years ago, Macaulay herself ran into trouble. She and her business partner parted ways and split ownership of the two stores. Then, another business deal went awry and ultimately turned into a lawsuit, leaving her with some steep legal bills.

At the same time, Macaulay’s family was growing fast; she now has five children, the two youngest being a 3-year-old and an 8-month-old who are in the shop playing just about every morning—a major distraction to anyone trying to run a business. She started having trouble paying the bills. “I was consistently paying the rent late. I knew I had to do something,” she said. Macaulay decided it was time to get out of the business, and she began looking for a buyer, preferably someone who would be attracted to the spot and who would want to keep the New Helvetia name.

Then, she got an offer from Derar Zawaydeh, who owns a number of coffee and crepe restaurants, including Crepeville in Davis. The offer came on Valentine’s Day, said Macaulay, and was contingent on Zawaydeh being able to negotiate a new lease with the building owners, a company called Firehouse No. 3 Associates. Macaulay said she called the landlord right away with the good news, and a meeting between the three parties was arranged. But then, just two days before the meeting was to occur, Firehouse No. 3 partner Kristy McAuliffe gave New Helvetia an eviction notice, Macaulay said. The next day, she said, representatives from Krispy Kreme were in the shop taking pictures, as if sizing the place up. The day after that, they brought tape measures.

McAuliffe, a partner in Firehouse No. 3 Associates, which owns the New Helvetia building, sounded angry when she returned SN&R’s call requesting an interview. “There is no story,” McAuliffe said tersely. “This is simply a matter of somebody who couldn’t pay their rent on time getting evicted.”

She said no final decision had been made about who the new tenants would be, and she denied having known anything of the pending sale of New Helvetia to Zawaydeh when she gave Macaulay the eviction notice. She added, “She can still sell her business. The building is not for sale.”

But Macaulay said the landlord did know of the pending sale and knew that the sale was contingent upon Zawaydeh being able to get a new lease. Without the location, she said, the business is not nearly as attractive to potential buyers.

Zawaydeh was disappointed, as well, and said he had been excited at the prospect of setting up in such an interesting, historical building. “I really think it would have been charming. To put in a corporate office really seems a shame. What are they going to do, put in cubicles?”

At press time, Zawaydeh remained hopeful that the deal could be salvaged. But Krispy Kreme seems ready to move in.

It’s clear that the company’s loft offices, which serve as the headquarters for all its stores in Northern California, are quickly becoming cramped. “As you can see, we’re kind of arms and elbows up here,” said Tim Hinchey III, vice president of Brand Development for Golden Gate Doughnuts LLC, Krispy Kreme’s Northern California franchisee.

Hinchey said the company was still negotiating with the landlords and that it was uncertain at this point whether the firehouse would be converted to corporate offices or ultimately would wind up as a retail doughnut shop. “That’s something that would have to go through North Carolina,” he said, referring to the location of company’s headquarters.

When asked whether he believed Krispy Kreme was a good fit for Midtown, Hinchey explained that the company recently was nominated for a prominent community-service award recognizing its charitable giving. “We are truly a part of the community. Our philosophy is ‘give ’til it hurts.’ ”

When asked whether he believed Midtowners might balk at a long-standing locally owned business being replaced by a corporate chain, Hinchey said, “You may have noticed that there are several large brands in this area,” referring to the Starbucks cluster and Chipotle nearby.

Indeed, people have noticed that there are several large brands in the area.

“Sacramento used to be a neat small town,” said Walker. “Now, they’re fucking it up, just like the suburbs.”

Though folks like Clark and Walker may be dismayed by what they see as Midtown’s loss of character and decry the chaining of Midtown, there is probably no turning back now.

“I think people will be sad for about a week,” said Macaulay. “Then, they’ll start eating Krispy Kremes.”