Millennia Associates, the development arm of the Jerde Partnership, a Venice Beach, Calif., architectural firm, is buying the former Union Pacific Railroad yard in downtown Sacramento to build a mixed-use development. The 240-acre parcel is one of the largest undeveloped urban tracts in the country. The deal was expected to be completed in February with groundbreaking scheduled for 2005.

The redevelopment will include as much as 500,000 square feet of streetfront retail, 600,000 square feet of office space, 3,000 residential units, 500 hotel rooms and civic facilities. Thomas Enterprises, based in Atlanta, will provide the first phase of financing for the project, which is Millenia's second after The Gateway in Salt Lake City. Rick Poulos, Jerde's executive vice president and chief administrative officer, estimates that the Sacramento project's cost will exceed The Gateway's $375 million price tag.

The development of the rail yards is the last phase in a vast downtown redevelopment that includes Westfield Shoppingtown Downtown Plaza and Old Sacramento, a tourist attraction. The rail yard site may also house a new arena for the Sacramento Kings basketball team. “Downtown Sacramento has historically been less than highly vitalized, so this sort of project wakes up the sense of urbanity of downtown,” says architect Jon Jerde. “What we're seeing across America is this interest in downtown — not a town center, but a real downtown.”

Jerde says he established his own development group to “bring cities back alive.” Sacramento leaders are equally enthusiastic. “This project is going to have regional implications that will literally drive millions of tourists and visitors to the site,” says Thomas Lee, deputy city manager for Sacramento.

Millennia Associates will also coordinate with state and municipal projects on the site, including the expansion of the Southern Pacific Depot to house a transportation center, and of the existing California State Railroad Museum.

Jerde described the redevelopment as an “an accessory” to Downtown Plaza. Millennia will choose tenants that reflect street life, he says, “and Downtown Plaza is offering many things that make us work completely, such as department stores.”

Westfield executive vice president Anthony Manos says he is not worried. “The mall is one of the largest stakeholders in downtown, so we don't think Jerde is going to do anything that would detract from the mall.”