Old Gottschalks building in Downtown Fresno, file photo

Mayor Jerry Dyer has initiated the process of selling the city-owned portion of the former Gottschalks building in Downtown Fresno. And while the drive has been to add more downtown housing, one developer who has explored the project says it could be more complex than it appears.

The announcement to declare the building surplus comes after the historic building at 830 Fulton St. was the first to be inspected under the City’s new Commercial Vacant Building Ordinance, which was approved in the 2021-22 budget.

“The City Manager and I have been working with developers, property owners and financial institutions for the past several months to expedite housing development in Downtown Fresno,” Dyer said in an email. “The Gottschalks building has been the topic of many of those discussions.”

The city manager’s office is in the midst of creating a request for proposals to sell the 53,000 square-foot, city-owned portion along with the Spiral Parking Garage through the Surplus Land Management Act. The building has a basement and a ground floor with an upstairs accessible by escalator.

The price has not yet been determined.

An assessment  has not been completed, but estimates put the cost to rehabilitate the building in the range of $5 million to $7 million based on information from 2016, Dyer said.

Fresno City Councilman Miguel Arias said the decision to declare the building surplus would be considered by the Fresno City Council in August. State law says that public agencies seeking to develop surplus properties for the purposes of housing have the right of first refusal. Then follows private developers who would use it for housing and finally developers who would use it for other purposes.

Developer Will Dyck of Summa Development Group in Fresno prefers to call the building on Fulton Street between Kern and Inyo streets the “Gottschalks Block.” Being two distinct buildings, they have two very different potentials, Dyck said, which explains why so many proposals have failed there.

The northern half of the building is owned by Haig Tacorian, an investor from Southern California. Dyck is exploring a joint-venture with Tacorian to turn the building adjacent to the city-owned portion into approximately 75 units. The layout would mostly be lofts and around the exterior would be one-and-two-bedroom units where more windows can be installed.

The problem with using the city-owned portion for housing is the layout. Building codes require operable windows for each unit. And being adjacent to the spiral parking garage makes that next to impossible, said Dyck. The Fulton Street Specific Code also requires a certain amount of retail near the street.

Dyck said retail would be the most feasible for the city-owned portion of the building. In that portion of Downtown near the Brewery District, it’s been restaurants and brewpubs that have been leasing.

The state of the privately-owned portion of the Gottschalks Block is very similar to that of the city-owned portion. Dyck says it is not much more than concrete shell as it has no usable facilities on the inside. People have broken into the building.

“Anything that could be cut out and sold for $5 worth of scrap is gone,” Dyck said.

Part of the city budget allocated $25 million to go toward housing projects in Fresno.

The Gottschalks building could qualify for those funds. Dyer said they would work with the developer to determine how the city can assist with the development.

In 2018, preliminary work had begun for Club One Casino to purchase the Gottschalks building and accompanying Spiral Parking Garage. The deal fell through and Club One ended up locating to Granite Park.

The first Gottschalks department store opened in Downtown Fresno in 1904, later expanding to the Fulton Street location in 1914. The department store would later grow to 58 stores across the western U.S. The Downtown Fresno store closed in 1988, and the chain was liquidated in 2009.