Popular chain retailers such as Whole Foods look to Midtown Sacramento

It comes down to leakage.

Or at least that’s how new Midtown Business Association executive director Emily Baime Michaels explained what national big-brand chains such as BevMo! take into account when considering a new store in Sacramento’s central city.

“What they’re looking for is whether people are leaving an area to find a certain item,” she explained.

In the case of BevMo!, the company hopes to move into the large building on the corner of J and 17th streets—former home of record store The Beat—next year. It says enough Midtowners are leaving, or “leaking,” from their homes and apartments to purchase wine, beer and spirits at the company’s other locations in suburbia.

“We continually see our customers in the central Midtown area traveling out to [our other] stores to shop,” said Greg Endom with BevMo!

His company isn’t alone. More and more big-name chain stores, including Whole Foods Market, are eyeing Midtown.

“National chains are looking for very convenient locations,” explained David Herrera, vice president with commercial real-estate firm Colliers International. His company represents the owner of the building that BevMo! hopes to call home.

“The reason that they like this location is the high amount of traffic, the visibility and the on-site parking,” which includes 48 stalls, Herrera explained.

“If you had a Beat building like that up and down J Street, [the block] would be 75 percent chains,” he said.

He used the Goodwill store on 16th and L streets as an example of the “identity, branding and convenience” that national chains look for in urban areas.

For years, Midtown has been devoid of big-name corporate retail stores, sans a few Starbucks coffeehouses or the occasional California Pizza Kitchen.

“The reason is that we simply don’t have a large enough inventory [of big buildings] for many large retailers,” explained Baime Michaels, who added that the arrival of well-known brands in Midtown is “going to be a really slow progression.”

Not that big chain stores aren’t trying.

Habit Burger, a California-based company with more than 80 locations in multiple states, announced it will be opening a restaurant at the new mixed-use apartments on 16th and O streets next year.

And multiple sources confirmed to SN&R that Texas-based Whole Foods Market has been eyeing the grid for years.

“They’re definitely aggressively looking,” Herrera said of Whole Foods, adding that it wants a 20,000 to 30,000-square-foot location—almost the size of an entire city block—with parking. A site under consideration is near The Sacramento Bee headquarters at 21st and Q streets.

One source said it was a “50-50 chance” that Whole Foods would end up in the central city. A spokesperson for Whole Foods said the company has yet to announce anything for a Sacramento store, and that it reveals such news during its quarterly earnings calls.

Like a new Sacramento Kings arena on K Street, a Whole Foods Market has the buying power and anchor-tenant capacity to tip the scales toward more big-name stores converging on the grid.

So, will Midtowners, who are accustomed to locally owned businesses, accept these big chain stores? And can BevMo! or Whole Foods co-exist with old-school corner liquor stores or the Sacramento Natural Foods Co-op?

“It’s great that these retailers feel that the central city has buying power. But I do have concerns about how these larger chains are going to impact existing businesses,” said Julie Murphy, president of the Marshall School/New Era Park Neighborhood Association.

Baime Michaels thinks there’s room for everyone, and that residents will embrace the chains, because they tend to open smaller “neighborhood concepts” that fit in with the existing urban fabric.

Endom with BevMo!, for instance, says his company is already reaching out to local muralists and even a bike-rack architect so that its Midtown store can vibe with the grid milieu. They also intend to preserve the original Beat building, including the kiosk at its J Street entrance.

BevMo! submitted an application to operate with the city a couple weeks ago, according to Endom. “It’s going to be well into next year before we open a store,” he said.

Is this the beginning of The Big Chain Takeover?

“I don’t think it will ever be taken over by chains, but having a couple chains here and there could be good,” Herrera said. “Midtown, I like it for being Midtown. It’s fun.”