Sacramento Proposal/Approval/Construction Thread - III

[snfenoc]

Here's an intriguing proposal for the northwest corner of 14th and I streets - 14i Hotel. The plans call for a 6-story, 19-room HOTEL?!? Only 19 rooms for a hotel? Interesting. Yes, majin, I know it's not tall enough (for you), especially for a project located in downtown. However, the site looks to be less than about one sixth of a block (0.07 acres or 3,166 square feet). Plus, it's currently an empty, ugly lot... I'll take it.

We don't know who the developer is, and apparently the city has not received an application.

HRGA is listed as the architect.

Sacramento gets plans for downtown hotel. But who's proposing it?
By Ben van der Meer – Staff Writer, Sacramento Business Journal
Aug 22, 2019, 8:13am EDT

https://www.bizjournals.com/sacramento/news/2019/08/22/sacramento-gets-plans-for-downtown-hotel-but-whos.html

A new hotel is being planned for a long-empty property in downtown Sacramento. But who’s proposing it isn’t clear.

Last week, city planners received plans for a six-story, 19-room hotel at 826 14th St., about a block north of the Sacramento Convention Center.

https://i.postimg.cc/ZqWRnbYM/Screen-Shot-2019-08-22-at-9-27-57-PM.png

[snfenoc]

Well, that was fast...

https://www.sacbee.com/opinion/article234279762.html

In an opinion piece published this morning, the Sacramento Bee’s Marcos Breton gives some insight into what’s in the works for 10th and J:

Anthem, the new owner of the failed Cathedral Sqaure site (south side of J Street between 10th and 11th) has submitted to the city "pre planning" for an 8-story mid-rise. It would have 6 floors of mid-market apartments, with ground floor and underground parking.

Anthem looked at building a 20-story high rise, but it was just too expensive.

Councilman, Steve Hansen, hopes the application process will be 4-6 months, with demolition possibly starting by the end of this year.

Anthem is saying this could be the beginning of many more projects in Sacramento. (Note, they just bought the 1500 S Street development site.)

Over at the Metropolitan site, on the northeast corner of 10th and J, Kolokotronis (SKK Development) is about 6 months behind Anthem. However, he is planning a structure that is similar to what Anthem is proposing.

There you have it... We went from two high rises of 25 and 38 floors each to two mid-rises of about 8 floors each.

To the Majins of this forum, I’ll leave you with a quote from Steve Hansen. “We in Sacramento always lament when we don’t land on the moon. But when we land in a good place, we should celebrate it.”

Something is better than nothing.

[CAGeoNerd]

Very much a "boutique" hotel!

[LandofFrost]

Well, that was fast...

https://www.sacbee.com/opinion/article234279762.html

In an opinion piece published this morning, the Sacramento Bee’s Marcos Breton gives some insight into what’s in the works for 10th and J:

Anthem, the new owner of the failed Cathedral Sqaure site (south side of J Street between 10th and 11th) has submitted to the city "pre planning" for an 8-story mid-rise. It would have 6 floors of mid-market apartments, with ground floor and underground parking.

Anthem looked at building a 20-story high rise, but it was just too expensive.

Councilman, Steve Hansen, hopes the application process will be 4-6 months, with demolition possibly starting by the end of this year.

Anthem is saying this could be the beginning of many more projects in Sacramento. (Note, they just bought the 1500 S Street development site.)

Over at the Metropolitan site, on the northeast corner of 10th and J, Kolokotronis (SKK Development) is about 6 months behind Anthem. However, he is planning a structure that is similar to what Anthem is proposing.

There you have it... We went from two high rises of 25 and 38 floors each to two mid-rises of about 8 floors each.

To the Majins of this forum, I’ll leave you with a quote from Steve Hansen. “We in Sacramento always lament when we don’t land on the moon. But when we land in a good place, we should celebrate it.”

Something is better than nothing.

If downtown fills up with 6 to 8 story residential, like most of Europe, I'm totally ok with it. A friend of mine moved into the Hardin Apartments (at 700 k) and I've begun to see a glimmer of what it could be like with people actually living in that area.

[Majin]

Yeah no, I'm not actually okay with it. I rather those sites sit vacant until the next boom than to build a 6 story structure in the middle of downtown.

The long term damage to Sacramento this will cause is immeasurable. This current "boom" while adding some density is already doing some long term damage to the look, perception, and potential density in the grid. I already don't like the wasted potential of a 8 story building on capitol mall, but do start filling up J street with 6 story apartments? Our potential downtown density AND skyline is going to be permanently screwed over with things like this. It's very short term thinking in a long game.

And yes we are on skyscraperpage so we are skyscraper enthusiast, but at the same time Sacramento really does need to fill out and add density to the skyline to improve its perception to the outside world, which has tangible quality of life and economic benefits. We are a high growth rate metro, which can already absorb a lot of apartment construction so the problem definitely isn't lack of demand. It's not like we are Flint, MI waiting to build a 50 story skyscraper.

For most of the downtown blocks (JKLI corridors, railyards) we should just wait for the critical mass for monied developers to finally build skyline changing buildings rather than just build standard 6 story crap in the middle of downtown. Save that for the edge of midtown and east sac/oak park.

The momentum is already starting to shift. 11 story apartments at 19th and J, 15 story apartments proposed on K street. Just wait instead of doing permanent damage.

[Majin]

And by the way... unless there is something very prohibitively expensive about California I am missing. I am very dubious as to why at least 15 story apartments don't pencil out in Sacramento. We already know the market is undoubtedly there for it. It's not like Sacramento is a poor rust belt city with population decline.

Other metros with similar or less population, similar or less median income, similar or less rent price can somewhow "pencil out" more high rise (15+ stories).

Is only different I assume is labor in CA. Materials should be exactly the same. I would expect land prices are a tiny fraction of what it costs to build a high rise so thats moot.

snfenoc, thoughts?

[novatone82]

And by the way... unless there is something very prohibitively expensive about California I am missing. I am very dubious as to why at least 15 story apartments don't pencil out in Sacramento. We already know the market is undoubtedly there for it. It's not like Sacramento is a poor rust belt city with population decline.

Other metros with similar or less population, similar or less median income, similar or less rent price can somewhow "pencil out" more high rise (15+ stories).

Is only different I assume is labor in CA. Materials should be exactly the same. I would expect land prices are a tiny fraction of what it costs to build a high rise so thats moot.

snfenoc, thoughts?


You couldn't have elaborate any better then that :worship::tup:

[sactivity]

I'm with majin big time. There are still street level parking lots in the middle of downtown. I could imagine an opportunity for a real honest SKYSCRAPER to fill it up... but if you put a 6-story there instead then that opportunity is gone for a very very long time. I'd rather see the street level parking lot till something taller better bigger skyline-defining attitude-changing, yadda yadda comes along.

[snfenoc]

You make some interesting points and pose some good questions, Majin. However, these points and questions have been addressed and answered over and over and over and over again. Why should I address and answer them? I might as well be talking to a wall.

Heck, forget about me. I'm just a development "buff". Have you even read what Son of Travis (who actually works in the business) has written? Are you listening to what the developers are saying when they're asked, "Why don't you build taller?"

They make some really good points, but they all seem to bounce right off of you.

If you won't listen, after a while, what's the point?

Repackaging your same arguments does not change the fundamentals of what is going on. I am sorry, but demand is not enough. Developers, contractors and investors have to supply that demand. In order to supply that demand, there has to be an incentive. We call that incentive "profit."

An investor has a fiduciary responsibility to maximize profits. He can't just tell his angry shareholders that he OK'd a risky and expensive tower project because he felt a need to indulge Majin's demand that Sacramento must appear grand to people driving by on the freeway.

Yes, it is more expensive to build in California. Labor, availability of contractors, permit fees, and CEQA lawsuits all combine to diminish the profits from projects with already slim profit margins. Yes, Sacramento has to compete in an expensive state with bigger, richer cities for limited investment dollars.

No, it has not been proven that taller buildings would be successful in Sacramento. If it were proven, do you think we'd be seeing these 5-10 story proposals? These developers and investors are not stupid. They've done their homework. They know what works right now.

You mentioned a bunch of phantom 15 story buildings as proof that Sacramento is ready for taller projects. Specifically, what are you talking about? Are you talking about Nikki Mohanna's proposal for K street? Are you talking about the Yamanee proposal? You realize these proposals have not been built yet, right? As of now, they are merely drawings in an office. They are not real. I am not saying they won't happen or won't be successful. I AM saying that they hardly provide a track record for building tall in Sacramento. Plus, those proposals are for smaller parcels and either rely on super high density or super rich renters/buyers.

If, as many experts have said, that building taller is much more expensive per square foot, can you imagine just how expensive it would be to build taller on these much larger J street parcels?

Right now, I know of only 3 newer, privately developed buildings in Sacramento that are taller than these 8 story proposals: 19J, 1430Q and the DOCO tower. 19J is only 11 stories, it was a gamble, it's on a smaller parcel, and it's relying on super high density - units as small as 312 square feet. 1430Q is only 8.5 stories, it too is on a smaller parcel, and it relies on luxury renters. The DOCO tower is mostly a hotel, it is part of a larger project that received heavy subsidies, and its 45-ish condos are for rich people.

Maybe you are talking about 15 story buildings in other, similarly-sized cities in other states. OK... give me some examples. Have they been successful? Were they as expensive to build as they would be in Sacramento? Are any of those cities home to Fortune 500 companies, because Sacramento is not. Is it possible that those other cities have different economic realities, different laws, a different mix of people, and don't have to compete with Los Angeles, San Diego, San Francisco, San Jose, and Oakland? Population is not the only determining factor in whether it makes sense to build so far upward.

I would much rather see these less grand proposals get built than wait. J street has waited long enough. Those properties are burdens on the city. They drag it down. Did you ever consider that if all of these smaller projects become successful and add life and commerce to the city, Sacramento may see grander projects in the future? You have to learn to crawl before you can walk. Sitting on your bum, waiting for magic to happen isn't going to work.

Yes, developing these sites will make them unavailable for development in the near-future. But there are plenty of undeveloped and underdeveloped sites in town that could be home to Sacramento's next skyscraper. However, that skyscraper will need a foundation of other successful projects on which to build. Investors will want proof that a risky tower project will pay off. If they look around and see lots of people living in the city and lots of commerce, they may want to invest. If they look around and see blighted properties and holes in the ground, they will pass.

Ask yourself this question, 'Do I really care about Sacramento's progress or am I compensating for something?'

[sactivity]

Whew, i'm glad you got that off your chest

[Majin]

Ok this is going to be fun, I'll take your points one by one. But let me say first that I'm not trying to argue with people, I'm trying to be convinced so Im willing to take data and change my mind. But lets go point by point.

In order to supply that demand, there has to be an incentive. We call that incentive "profit."

That is exactly the heart of my question. Lets take some similar sized cities. Portland, Tampa, Charlotte, Pittsburgh, San Antonio, Austin, Las Vegas, Nashville. Assuming the "free market" sorts things out to maximize profits for building residential buildings (I actually challenge this assumption that the market is always right but lets take that on in a different post), are you saying every other similarly sized city as Sacramento can make more profit buildings 15+ story residential towers? I'm looking for data.

1. Are rental prices in the central cities of all of those places significantly higher than Sacramento?
2. Are construction costs (labor) significantly higher in Sacramento?
3. What is the percentage of the total costs of building a residential tower that is CA's permits and other legal stuff compared to other markets? I'm guessing getting permits is a tiny percentage of the total cost of building a residential tower.

Number #2 is a big one, I would assume that is very true. So yes, if you or someone else show me some data that it is 2x the cost to build a tower in Sacramento vs Nashville for example, and that central city Nashville can get the same rental prices as Sacramento, then I would understand why residential towers arent built here.

Yes, it is more expensive to build in California. Labor, availability of contractors, permit fees, and CEQA lawsuits all combine to diminish the profits from projects with already slim profit margins. Yes, Sacramento has to compete in an expensive state with bigger, richer cities for limited investment dollars.

As I mentioned above yes labor costs might be prohibitive, but if a building cost $50 million for example, what percentage permit fees and CEQA lawsuits? I'm guessing that is like 0.01% of the cost. I never understand the "there are bigger and richer cities argument", because no matter what city, there are ALWAYS bigger and richer cities. Why would you build in Portland when you can just build in New York? Why would you build in Austin when you can build in New York? You can always point to New York or San Francisco.

No, it has not been proven that taller buildings would be successful in Sacramento. If it were proven, do you think we'd be seeing these 5-10 story proposals? These developers and investors are not stupid. They've done their homework. They know what works right now.

I disagree about the "market is always right" BS but that aside, but right now 19J is opening, 15 story residential tower is proposed for K street. 8 story at 15th and Q is almost finished, The Saywer (I agree this was subsidized). My point was in the original post was "lets wait", as it looks like we may be crossing that threshold where 10+ floors might become the new normal. It looks like to me we are only a few years away from 10+ floors being "proven". My whole argument was "lets not build 6 stories on J street and wait", not that Sacramento is a proven market for 30+ story residential towers.

You mentioned a bunch of phantom 15 story buildings as proof that Sacramento is ready for taller projects. Specifically, what are you talking about? Are you talking about Nikki Mohanna's proposal for K street? Are you talking about the Yamanee proposal? You realize these proposals have not been built yet, right? As of now, they are merely drawings in an office. They are not real. I am not saying they won't happen or won't be successful. I AM saying that they hardly provide a track record for building tall in Sacramento. Plus, those proposals are for smaller parcels and either rely on super high density or super rich renters/buyers.

The Yamanee seems like BS but the 15 story K street proposal is way more believable since Mohanna actually followed through with her plans at 19J. If a 11 story tower fills up without issue (I agree we have to wait and see, but we'll find out very soon its almost open), you telling me going from 11 to 15 floors is some kind of pipe dream? Seems believable to me assuming 19J is successful.

Maybe you are talking about 15 story buildings in other, similarly-sized cities in other states. OK... give me some examples. Have they been successful? Were they as expensive to build as they would be in Sacramento? Are any of those cities home to Fortune 500 companies, because Sacramento is not. Is it possible that those other cities have different economic realities, different laws, a different mix of people, and don't have to compete with Los Angeles, San Diego, San Francisco, San Jose, and Oakland? Population is not the only determining factor in whether it makes sense to build so far upward.

Yes I'm comparing 15 story buildings in other similar sized cities with Sacramento. My whole point was I would like some data why they pencil out in other similar sized cities vs here. I agree the population of a city isn't everything, which is why I'm asking. Is there something special about Nashville for example where 15 story residential towers pencil out but they don't pencil out in Sacramento? F500 companies, sure, but at the end of the day isn't it just what you can charge for rent? Central city Sacramento already has tons of places that charge ridiculous rent. Isnt that the bottom line for profitability?

I would much rather see these less grand proposals get built than wait. J street has waited long enough. Those properties are burdens on the city. They drag it down. Did you ever consider that if all of these smaller projects become successful and add life and commerce to the city, Sacramento may see grander projects in the future? You have to learn to crawl before you can walk. Sitting on your bum, waiting for magic to happen isn't going to work.

I never said don't build them. I said don't build them on J street. In my OP I said build them in Oak Park, the outskirks of midtown, east sac, etc. Just don't build them at 10th and J or on Capitol Mall. Hell, I don't even have much of a problem with the 7 story buildings at the capitol towers site as they are still in Downtown proper and we are trading 2 story suburban shit for some 7 story density. They can help breathe life into downtown proper while persevering those J street sites for when the market is ready.

Yes, developing these sites will make them unavailable for development in the near-future. But there are plenty of undeveloped and underdeveloped sites in town that could be home to Sacramento's next skyscraper. However, that skyscraper will need a foundation of other successful projects on which to build. Investors will want proof that a risky tower project will pay off. If they look around and see lots of people living in the city and lots of commerce, they may want to invest. If they look around and see blighted properties and holes in the ground, they will pass.

Yes, how about the R street corridor, or south of N street, plenty of places to add density there while staying below 10 floors. I'm just saying leave IJKL and capitol mall alone.

Ask yourself this question, 'Do I really care about Sacramento's progress or am I compensating for something?'

Yes I'm compensating :rolleyes:

[snfenoc]

If the law of Supply and Demand is BS to you, then, I'll say it again, what's the point in trying to convince you? I see it differently. That's it. There is not much I can say to someone who is diametrically opposed to my values. I will note that saying you don't believe in market economics isn't really an argument. It's just a quick and lazy way to deflect reality.

Speaking of reality... How many privately built 15-story towers go up in Sacramento during this economic boom? What does that tell you? Do you think that developers and investors are intentionally keeping Sacramento down? I don't. I think they are doing the best that they can to build the best that is possible. If you go on Anthem's website and take a look at their projects (admittedly, many suburban-style developments), they seem to be pretty knowledgeable about development. They seem to have a good track record. So I find it difficult to question them when they say it's too expensive to build much taller on the Cathedral Square site. I trust them. However, I guess that's not enough for you.

With regard to wanting facts and numbers, I don't want to seem like a jerk, but why do I have to put together scholarly report for you? You're basically asking me to Google everything for you, sort through all the data and come up with some sort of complicated mathematical formula proving why mid-rises are the best option at this point, and why we should strike while the iron is hot. No offense, but do it yourself, and come to your own conclusions. Then, maybe you can share your knowledge with us... You know??? Maybe do that instead of complaining about every single proposal that doesn't meet your standards?

As I've said before, I am a development "buff". I read the articles and I listen to what the experts are saying. I don't sit and run the numbers. Sorry. However, I've learned some pretty cool things just by reading, listening and asking those who know more than I do. For example by reading, listening and asking the experts, I've learned a number of things....

I was speaking to someone involved in financing construction projects a few weeks ago. He explained that a lot contractors won't even consider working on many of the construction projects that we all love. You know why? Because of all the fires in Northern California. You see, insurance companies don't hassle the contractors over what they do. Insurance companies basically write a check and say, "go to town." Contractors love that. It's way better than worrying about those silly investors wanting to account for every penny. An interesting piece of info, huh? You think that might add some competition, decrease the number of available contractors and increase construction costs? With regard to the "Cali Premium," I can't tell you what percentage of the overall cost it is. But common sense tells me that California is just more expensive, and significantly so. Sure, you can justify building at an expensive price if you're getting $6 or $7 a square foot (like 90 minutes away, in SF), but not so much if you're only getting say $3-5 a square foot in Sacramento. Again, we have another example of competition and supply and demand rearing their ugly heads. I learned from Son of Travis when he wrote about $1.5 million in permitting fees for an $8 million project in West Sac. (What's that, like 18-19%?) I do know that in the 3 years it took for Yamanee to go through the courts (a CEQA claim was part of that lawsuit), construction costs rose significantly (I remember reading something like 10-15%). I have learned by working as an office manager that when businesses talk about their costs, labor is number one; and we know labor is more expensive in California compared to many other states. We know that land is more expensive. We know that taxes are higher. I know I am rambling, but I found this interesting. Again, from asking people in the business, did you know that tax credits, say for projects that include low-income components, can be bundled and sold on the market to companies that have nothing to do with the actual project? From what I gathered, many companies will actually pay more up front than the tax credit is actually worth. (I guess, if they do their accounting correctly, they can lower their tax base and save even more. Interesting.) So, a developer can use that upfront money and, basically, subsidize his or her project. If you subsidize something, you maintain its high price. Nifty, huh? But it makes me wonder, can Sacramento hand out as many tax credits as other cities in California or in other states? Again, Sacramento has a lot of bigger, richer cities with which to compete for those credits. Plus, other similarly-sized cities across the country are often the biggest cities in their respective states; so they may be able to hand out more subsidies than Sacramento can. Here we go again with Sacramento having to compete in a tough market.

Frankly, I think your estimation of 0.01% premium is off by at least two zeroes. Since it's common for equity partners to demand 15% IRR, a 1 or 2% Cali Premium can certainly make the difference. Remember, construction projects are risky and have slim profit margins. So a 2% premium could lower profits a lot! Due to its lower rents compared to other, major cities in California, and because Sacramento is considered risky, I understand why investors may not want to invest in a high-rise. At least, not just yet.

It's funny that you mention Nashville. Because I just read a couple articles in Forbes about that city. Nashville was the third and fourth fastest growing economy in in 2017 and 2018, respectively. You know what city did not even crack the top 10? Sacramento.

Nashville is not only the state capital of Tennessee, it's also the home of country music - a $6.5 billion dollar a year industry in Nashville. Entertainment dollars can pay for a lot of glitz and glamor, including high-rise housing. So, yeah, I think it may have different economics than Sacramento does.

Going back to Son of Travis, I learned from him that Sacramento is an untested market for high-rise living. It needs to either have an investment "fairy" in the guise of CalPERS for 301 Crapitol Mall, or it will need to string together quite few successful mid-rise projects before the investment gods will take a risk on a high-rise. Well, that's all the more reason to be exited about 7, 8, 9, or 10 story projects getting proposed - especially by companies with access to lots of money and strong tack records. If a number of them get built and are successful, then we could see a few high-rise residential projects in a decade or so.

True, I am taking a leap of faith by "going with the experts on that one," and believing these articles about development. (I know you probably consider Forbes to be a "crapitalist pig" magazine.) However, they seem to be truthful, and I have no reason to question them. Also, I have to add that you and I are both not developers or crapital investor, and since it's not our 10s or 100s of millions of dollars at stake, I think we should be willing to let them decide what works and what doesn't. But what do I know? I don't have the "numbers," right?

You mentioned that you're OK with 7-10 story developments, just not downtown, along J Street. Ahhhhh yes, the magical land of "Elsewhere." You realize that's the same kind of argument that wburg likes to make when he opposes anything over 5 floors in midtown, right? Both of us called him on that. Developers don't have their pick of the litter. They buy what they can buy, and they build what makes sense to them. They don't have the luxury of passing on properties and leaving them to someone who can build something different.

Maybe you're right. Maybe the next boom will see Sacramento on the rise? But that could be a decade or more away. Also, I recall that we said the same kind of stuff a decade ago, when the towers failed. Well, ten years have come and gone, and we did NOT get a bunch of high-rise residential buildings. BUT we have gotten (and continue to get) multiple awesome mid-rise projects that have changed some pretty blighted areas for the better.

After the towers failed and it became clear that any future development on that site would be much less grand, Son of Travis explained a few construction business maxims to us. One thing he said was that "something is better than nothing." I believe this to be true. Sure, we could wait and get something better. However, we can't tell the future. What if we have another fire or a major earthquake? Then, we'll be running into the same problem of contractors choosing rebuilds over new developments. You never know what is going to happen. Meanwhile, J Street would continue to sit and rot instead of thriving with residents and shops.

So while I am certainly disappointed by the lack of height in all of these proposals, I would rather Sacramento take what it can get, continue to move forward, and build a foundation for future, grander developments.

I'll leave you with one more thing. I was in Sacramento last summer with my spouse. We stayed at the Citizen hotel. (Got a great rate on Priceline.) I was excited to show off my hometown. Sadly, it was completely embarrassing. J street looked like shit. So, you know what? I am happy if Anthem only builds an 8 or 9 story building on the Cathedral Square site. I am happy if the Metropolitan drawing turns into a real 8, 9 or 10 story building. I'll take the sure thing. There will be other opportunities. If half of all these mid-rise proposals get built, reduce blight and improve the city, they will build the foundation for the future. But if Sacramento misses these opportunities, holding out for taller buildings, it's back to square one. I would rather see progress, whether it's in the form of a high-rises or a bunch of really nice mid-rises. Let progress happen!

[CAGeoNerd]

Natural Resources building looks like it's adding the top floors today, it really has added some height the last few days! Excited to see it's place in the skyline finally.


On the discussion of midrises vs skyscrapers and whether we should fill up street-level parking lots or not.... as long as we have literally hundreds of acres of undeveloped open space sitting in the Railyards as well as the Bridge District, space is not going to be a limiting factor in developers wanting to build upwards. It's going to take a lot of midrises filling in the grid and these undeveloped areas before more residents and office space start driving things higher.

[Majin]

Ok here we go!

If the law of Supply and Demand is BS to you, then, I'll say it again, what's the point in trying to convince you? I see it differently. That's it. There is not much I can say to someone who is diametrically opposed to my values. I will note that saying you don't believe in market economics isn't really an argument. It's just a quick and lazy way to deflect reality.

Dude where did I say anywhere that I think the law of Supply and Demand is BS? And how is it apparent to you that I am making my entire argument that I don't believe in market economics? What I said was I don't buy that "the market is always right" which has absolutely nothing to do with supply and demand. And even besides that point, the vast majority of my post was actually inquiring about the differences (cost/profit/etc) between similar markets, seeking actual data, not just throwing my hands up and saying "I don't believe in the market" or "I don't believe in supply and demand". What I mean is that just because "the market" thinks something will or will not be successful doesn't not mean its "right" in signaling that it won't. For example, before The Saywer, "the market" decided not to build million dollar condos in Downtown Sac, assuming because there was "no market", yet after it was built, million dollar condos sold. "The Market" signaled it was too expensive to build anything taller than 5 story wood frame housing in Sacramento, yet the 11 story steel building at 19J is about to open. If it fills up no problem, then "The Market"™ was understating the financial feasibility of 11 story steel framed residential apartments in Sacramento. The same story if Mohanna gets her 15 floor apartment on K street, we will wait and see on that.

Speaking of reality... How many privately built 15-story towers go up in Sacramento during this economic boom? What does that tell you? Do you think that developers and investors are intentionally keeping Sacramento down? I don't. I think they are doing the best that they can to build the best that is possible. If you go on Athem's website and take a look at their projects (admittedly, many suburban-style developments), they seem to be pretty knowledgable about development. They seem to have a good track record. So I find it difficult to question them when they say it's too expensive to build much taller on the Cathedral Square site. I trust them. However, I guess that's not enough for you.

I'm not saying I'm an expert that knows better than developers, what I have been saying is that I am skeptical on how accurate this is based on my observations of other markets. Thus my inquiry on *why* its too expensive/unprofitable to do it here versus other places. For the sake of argument lets say what they say is 100% accurate, what is the problem with me being curious to dig into the details as to *WHY* its so unprofitable compared to other markets? During this boom, as to why we didn't have a bunch of 15 story residential buildings going up, I would agree that in 2008 The Grid and Sacramento being a "urban" market was much much more unproven than it is in 2019. I think if we started in the "2019 Sacramento" during the start of the boom it would of been much more likely to produce the 15 story towers.


With regard to wanting facts and numbers, I don't want to seem like a jerk, but why do I have to put together scholarly report for you? You're basically asking me to Google everything for you, sort through all the data and come up with some sort of complicated mathematical formula proving why mid-rises are the best option at this point, and why we should strike while the iron is hot. No offense, but do it yourself, and come to your own conclusions. Then, maybe you can share your knowledge with us... You know??? Maybe do that instead of complaining about every single proposal that doesn't meet your standards?

No you don't have to put any scholarly report together. You don't even have to reply to any of my post if you don't want to of course. It sounds like to me you don't know, don't want to look, and just trust whatever developers say. Thats fine, but I'm more skeptical/less trusting of "markets" and what companies/developers say in general. For example, when Waste Management left Sacramento they first said it was because of "California Taxes", then later admitted it had absolutely nothing to do with "California Taxes", it was political BS. So no, I don't trust developers/corporations state by default. I am not trying to argue in bad faith though and can be convinced of anything, even if I'm initially skeptical.

As I've said before, I am a development "buff". I read the articles and I listen to what the experts are saying. I don't sit and run the numbers. Sorry. However, I've learned some pretty cool things just by reading, listening and asking those who know more than I do. For example by reading, listening and asking the experts I've learned a number of things....

Thats exactly what I'm doing. I'm sitting down and listening. As I stated before, what is wrong with being skeptical and trying to understand the underlying factor deeper than the single phase "it doesn't pencil out"?

I was speaking to someone involved in financing construction projects a few weeks ago. He explained that a lot contractors won't even consider working on many of the construction projects that we all love. You know why? Because of all the fires in Northern California. You see, insurance companies don't hassle the contractors over what they do. Insurance companies basically write a check and say, "go to town." Contractors love that. It's way better than worrying about those silly investors wanting to account for every penny. An interesting piece of info, huh? You think that might add some competition, decrease the number of available contractors and increase construction costs?

I'm not even following what this means. Are you saying contractors rather work to rebuild from fire damage with an insurance check rather than build for an investor?

With regard to the "Cali Premium," I can't tell you what percentage of the overall cost it is. But common sense tells me that California is just more expensive, and significantly so. Sure, you can justify building at an expensive price if you're getting $6 or $7 a square foot (like 90 minutes away, in SF), but not so much if you're only getting say $4 or $5 a square foot in Sacramento. Again, we have competition and supply and demand. I learned fro Son of Travis when he wrote about $1.5 million in permitting fees for an $8 million project in West Sac.

I'm genuinely curious in larger projects (10+ floors) what percentage of the costs is this "California Premium". I would figure at some point the project becomes so expensive the cost of land/permitting/lawsuits become much less significant as a percentage. The Arena and The Sawyer I think cost $500 million, and had the face the "California Premium", I'm wondering what % of that $500 million is the California tax?

I do know that in the 3 years it took for Yamanee to go through the courts (a CEQA claim was part of that lawsuit), construction costs rose significantly (I remember reading something like 10-15%).

Well yeah you already know me and you are on the same page on things like the CEQA, regulation, and all of that crap. It needs to go or be significantly reduced. As for construction cost rising during lawsuits/delays in California, yeah I agree thats a factor probably other states don't have to contend with. I wonder why, however, given the California delays, why developers don't just propose things and start the process maybe 2-3 years before the market is "ready". For example, things were already turning around in 2014. I wonder why there wasn't a bunch of proposals started then so by the time 2016/2017 hit, during "peak boom", they weren't ready to start moving dirt?

I have learned by working as an office manager that when businesses talk about their costs, labor is number one; and we know labor is more expensive in California compared to many other states. We know Thant land is more expensive. We know that taxes are higher. I know I am rambling, but I found this interesting. Again, from asking people in the business, did you know that tax credits, say for projects that include low-income components, can be bundled and sold on the market to companies that have nothing to do with the actual project. From what I gathered, many companies will actually pay more up front than the tax credit is actually worth. (I guess, if they do their accounting correctly, they can lower their tax base and save even more. Interesting.) So, a developer can use that upfront money and, basically, subsidize his or her project. Nifty, huh? But it makes me wonder, can Sacramento hand out as many tax credits as other cities in California or in other states? Again, Sacramento has a lot of bigger, richer cities with which to compete for those credits. Plus, other similarly-sized cities across the country are often the biggest cities in their respective states; so they may be able to hand out more subsidies than Sacramento can. Here we go again with that difficult competition.

This is actually a good point. The vast majority of states only have 1 big city to focus on. So they get a lot of state level support since that is the states "showcase city". Sacramento has a lot of competition for state level support. I wonder in other states because they only have 1 big city if developers get a lot of tax credits there that they don't get here. That would uneven the playing field quite a bit.

Frankly, I think your estimation of 0.01% premium is off by at least two zeroes. Since it's common for equity partners to demand 15% IRR, a 1 or 2% Cali Premium can certainly make the difference. Remember, construction projects are risky and have slim profit margins. So a 2% premium could lower profits a lot! Due to its lower rents compared to other, major cities in California, and that Sacramento is considered risky, I understand why investors may not want to invest in a high-rise there. At least, not just yet.

Yeah, maybe its 1% and 1% is enough for it to "not pencil out"? But what I'm more interested in out it compares to other similar cities not San Francisco. San Francisco is literally I think the most expensive city in the country. Highrises are build in other places besides SF.

It's funny that you mention Nashville. Because I just read an article in Forbes about that city. Nashville was the third and fourth fastest growing economy in in 2017 and 2018, respectively. You know what city did not even crack the top 10? Sacramento.

Nashville is not only the state capital of Tennessee, it's also the home of country music - a $6.5 billion dollar a year industry in Nashville. Entertainment dollars can pay for a lot of glitz and glamor, including high-rise housing. So, yeah, I think it may have different economics than Sacramento does.

At the end of the day this would show up in rent prices or housing prices right? And salary numbers right? Just "being the country music capitol" doesn't put money into investors pockets unless entertainers are renting apartments or buying condos... which again would show up in the rent price/housing prices data.

What I am curious about ultimately is what is the price per sqft do you get in similar sized places vs the cost to build. Those data points should in theory tell us a lot about investor motivation if profits are the ultimate goal.

Going back to Son of Travis, I learned from him that Sacramento is an untested project for high-rise living. It needs to either have an investment "fairy" in the guise of CalPERS on 301 Crapitol Mall, or it will need to string together quite few successful mid-rise projects before the investment gods will take a risk on a high-rise. Well, that's all the more reason to be exited about 7, 8, 9, or 10 story projects getting proposed - especially by companies with access to lots of money and strong tack records. If a number of them get built and are successful, then we could see a few high-rise residential projects in a decade or so.

I think we are teetering on the edge of "untested" as we speak. To the point where we should wait before we fill up our main corridors.


True, I am taking a leap of faith by "going with the experts on that one," and believing these articles about development. (I know you probably consider Forbes to be a capitalist pig magazine.) However, they seem to be truthful, and I have no reason to question them. Also, I have to add that you and I are both not developers or crapital investor, and since it's not our 10s or 100s of millions of dollars at stake, I think we should be willing to let them decide what works and what doesn't. But what do I know? I don't have the "numbers," right?

Yes, see my initial response at the top.

You mentioned that you're OK with 7-10 story developments, just not in downtown, on J Street. Ahhh yes, the magical land of "Elsewhere." You realize that's the same kind of argument that wburg likes to make when he opposes anything over 5 floors in midtown, right? We have both called him on that. Developers don't have their pick of the litter. They buy what they can buy, and they build what makes sense to them. They don't have the luxury of passing on properties and leaving them to someone who can build something different.

Yes I actually do realize I'm doing a wburg in reverse. I however think its better to kill of low density projects in what should be high density areas. wburg is more interested in killing off high density projects in low density areas. I believe my views are better for the city, and another key difference is I just rant on the internet while wburg actually sues and does real damage.

Maybe you're right. Maybe the next boom will see Sacramento on the rise? But that could be a decade away. Also, I recall that we said this stuff a decade ago, when the towers failed. Well, ten years have come and gone, and we did NOT get a bunch of high-rise residential buildings. BUT we have gotten (and continue to get) multiple awesome mid-rise projects that have changed some pretty blighted areas for the better.

Even if it takes another decade to fill up J street and Capitol Mall with high rises its worth it to me. I could be wrong but I'm willing to take that risks while the rest of the city fills up with midrises.

I'll leave you with one more thing. I was in Sacramento last summer with my spouse. We stayed at the Citizen hotel. (Got a great rate on Priceline.) I was excited to show off my hometown. It was completely embarrassing. J street looked like shit. So, you know what? I am happy if Anthem only builds an 8 or 9 story building on the Cathedral Square site. I am happy if the Metropolitan drawing turns into a real 8, 9 or 10 story building, which would be a lot taller than any stupid drawing. I'll take the sure thing. There will be other opportunities. If half of all these mid-rise proposals get built, reduce blight and improve the city on ground level, they will build the foundation for something much grander. But if Sacramento misses these opportunities, holding out for taller buildings, it's back to square one. I would rather see progress, whether it's in the form of a high-rises or a bunch of really nice mid-rises. Let progress happen!

LOL for one, 10th and J is literally the absolutely worst block in the entire city, thus this entire conversation. 10th and J is super embarrassing, but I'm sure every city has a block like that, ours just happen to be on our main street and exactly where you happened to stay. I don't know why that prevented you from showing off nicer things to your spouse as the the citizen hotel itself is nice, and all you would of had to do is turn the corner and take a look at "ten ten bar" and K street is starting to clean up nicely, especially by the arena.

In fact DOCO is starting to become a very nice and lively place. I'm more concerned about DOCO long term however with the lack of new housing in downtown proper.

[Majin]

Natural Resources building looks like it's adding the top floors today, it really has added some height the last few days! Excited to see it's place in the skyline finally.


On the discussion of midrises vs skyscrapers and whether we should fill up street-level parking lots or not.... as long as we have literally hundreds of acres of undeveloped open space sitting in the Railyards as well as the Bridge District, space is not going to be a limiting factor in developers wanting to build upwards. It's going to take a lot of midrises filling in the grid and these undeveloped areas before more residents and office space start driving things higher.

Has the Natural Resources building really topped out already? How many floors is it? I thought it would end up being taller than that.

[CAGeoNerd]

Has the Natural Resources building really topped out already? How many floors is it? I thought it would end up being taller than that.

21 floors. It does look like it has a little more to go, and it has a sort of slanted roof on one side so will be a little higher. I can't wait until it's up and wrapped!

[Majin]

21 floors. It does look like it has a little more to go, and it has a sort of slanted roof on one side so will be a little higher. I can't wait until it's up and wrapped!

21 floors is JUST tall enough to have an affect on the skyline, but barely. I drove by it over the weekend and thought it had more to go before topping out. It should be taller than those twin towers its next to right? What is the floor count on those?

[kamehameha]

the twin towers are 17 stories tall. the new department of natural resources building(345ft i think) should be almost the same height as the Capitol Square building(351ft).

[Majin]

the twin towers are 17 stories tall. the new department of natural resources building(345ft i think) should be almost the same height as the Capitol Square building(351ft).

If thats the case doesn't it have quite a bit a ways to go before topping out?

[CAGeoNerd]

If thats the case doesn't it have quite a bit a ways to go before topping out?

This site has a nice rendering and video showing what it will end up looking like, you can get an idea of how much taller than the adjacent twin buildings it is: https://sacrbr.aecomonline.net/

[Majin]

This site has a nice rendering and video showing what it will end up looking like, you can get an idea of how much taller than the adjacent twin buildings it is: https://sacrbr.aecomonline.net/

Kinda hard to tell even from the renderings. The building looks nice I just wish it were taller.

[urbanadvocate]

Are you sure it is not just the lower portion that is topped out with the upper stepped back still left to frame out? Doesn't seem even as tall as the twins yet.

[enigma99a]

Are you sure it is not just the lower portion that is topped out with the upper stepped back still left to frame out? Doesn't seem even as tall as the twins yet.

Also there are these webcams. Looks like vertical steel is going up

https://app.oxblue.com/open/turner/nnrhproject

[urban_encounter]

Yeah no, I'm not actually okay with it. I rather those sites sit vacant until the next boom than to build a 6 story structure in the middle of downtown.

Majin, I don’t think anybody here would ever question your passion for the central city (with the exception of our tree canopy). :haha: But some of the most vibrant cities in the world are cities dominated by low and mid rise buildings. There are plenty of sites in the downtown core for residential high rises should they ever materialize. The two projects Marcos Breton mentions would still add a lot of residential units and much higher densities in addition to erasing years of blight. I love the Shornstein proposal on Capital Mall and it’s not tall. Secondly, it sounds as if Anthem remains open to the possibility of taller projects downtown if demand continues to grow.

I understand what you’re saying about the other mid sized cities seeing high rise residential projects materialize in their downtowns. But the truth is, they don’t have the same construction red tape and added costs that we have here in California to say nothing of the never ending lawsuits being filed.

I’m excited to see construction on J street. I don’t care if they’re 8 or 40 stories as long as they’re quality projects that bring more vibrancy to our central core.

BTW as a side note there’s something to be said about smaller projects. When people buy into a high rise condo or apartment project, the high rises almost end up like self contained cities within a city. People sometimes never venture out of their ivory towers. When i lived at 800 J street, I was out all the time.

[sactivity]

Hey, I just read that Tower 301 is breaking ground in 1 week. I also read that the new courthouse is breaking ground next month and the re-design adds 8 more stories and another 100 feet to its height. Also breaking ground next month is the Capital Grand Tower over 900 feet tall. This will join Saca's decision to build his twin 52-story towers at the site of the Metropolitan. Oh, and also read Libeskind came back and it says that he's breaking ground on Aura in January with The Epic going up simultaneously just a block away.. Oh, and I almost forgot... Amazon is building their World Headquarters on K Street next spring at 1075 feet.

[innov8]

Hey, I just read that Tower 301 is breaking ground in 1 week. I also read that the new courthouse is breaking ground next month and the re-design adds 8 more stories and another 100 feet to its height. Also breaking ground next month is the Capital Grand Tower over 900 feet tall. This will join Saca's decision to build his twin 52-story towers at the site of the Metropolitan. Oh, and also read Libeskind came back and it says that he's breaking ground on Aura in January with The Epic going up simultaneously just a block away.. Oh, and I almost forgot... Amazon is building their World Headquarters on K Street next spring at 1075 feet.

Your satire is brilliant. Only 10 years ago all sorts of spectacular condo
high-rises were proposed and not one of them was built. Today they are still
not feasible, that’s why nobody has proposed any. Vanir tower was a joke
from the beginning by not paying any fees to begin the EIR process, just renderings.

Majin is an agitator, you people already know this and he has told me this
when we talked in private massages. He’s driven by one topic and enjoys
watching you guys react to his absurd height is everything argument.

For the foreseeable future it appears only the State of California will be
constructing high-rises in Sacramento, the private sector is not interested and
there is limited record showing the market can pay the high cost to do so.

[downtownserg89]

Hey, I just read that Tower 301 is breaking ground in 1 week. I also read that the new courthouse is breaking ground next month and the re-design adds 8 more stories and another 100 feet to its height. Also breaking ground next month is the Capital Grand Tower over 900 feet tall. This will join Saca's decision to build his twin 52-story towers at the site of the Metropolitan. Oh, and also read Libeskind came back and it says that he's breaking ground on Aura in January with The Epic going up simultaneously just a block away.. Oh, and I almost forgot... Amazon is building their World Headquarters on K Street next spring at 1075 feet.

Aw man I totally fell for this during the first couple of sentences.

[Clinton Robinson]

I was wondering if anyone would be able to get a few photo updates of the Downtown skyline with the cranes that are up and the progress of Natural Resources building? Thank you!

[novatone82]

Hey, I just read that Tower 301 is breaking ground in 1 week. I also read that the new courthouse is breaking ground next month and the re-design adds 8 more stories and another 100 feet to its height. Also breaking ground next month is the Capital Grand Tower over 900 feet tall. This will join Saca's decision to build his twin 52-story towers at the site of the Metropolitan. Oh, and also read Libeskind came back and it says that he's breaking ground on Aura in January with The Epic going up simultaneously just a block away.. Oh, and I almost forgot... Amazon is building their World Headquarters on K Street next spring at 1075 feet.

Yea and the 36 story tower on 6th and capitol and found out that the Asian trade center 28 story hotel 40 story office tower and 26 story residential o wait the vanir braking ground tomorrow and just announced MLS approved SAC with a Team:tup: Yea the city skyline wouldn't even look the same with all of them past time proposals , Its always nice to dream though:)

[snfenoc]

Update to the Sacramento Commons project:

According to Ben van der Meer of the SBJ, the developer announced at the groundbreaking today that they will build BOTH 7 story mid-rises. That’s 436 units! Awesome news.

[novatone82]

Found this web site skyscrapercity.com looks like a spin off of this forum anybody else seen it???? Our forum seems to have the most updated and most conversations about Sacramento development and more options to see other projects around the world. love to see the different opinions on this forum, we have the best and most activity.

[novatone82]

Your satire is brilliant. Only 10 years ago all sorts of spectacular condo
high-rises were proposed and not one of them was built. Today they are still
not feasible, that’s why nobody has proposed any. Vanir tower was a joke
from the beginning by not paying any fees to begin the EIR process, just renderings.

Majin is an agitator, you people already know this and he has told me this
when we talked in private massages. He’s driven by one topic and enjoys
watching you guys react to his absurd height is everything argument.

For the foreseeable future it appears only the State of California will be
constructing high-rises in Sacramento, the private sector is not interested and
there is limited record showing the market can pay the high cost to do so.

Will there ever be a increase in the private sector? and what can be done to gain the private sector? Do you think government has a lot to do with these proposal never going threw?

[sactivity]

Is there a "groundscraperpage.com", by chance?

[creamcityleo79]

Found this web site skyscrapercity.com looks like a spin off of this forum anybody else seen it???? Our forum seems to have the most updated and most conversations about Sacramento development and more options to see other projects around the world. love to see the different opinions on this forum, we have the best and most activity.

Skyscrapercity has been around for a long time (just like skyscraperpage) and is much bigger. They have way more international users and their US forums are more robust in areas where the SSP forums are lighter (ie. the Midwest outside of Chicago). A quick wiki search reveals that SSP is 4 years older with about 52,000 members. While younger, SSC has over 950,000 users.

[novatone82]

Skyscrapercity has been around for a long time (just like skyscraperpage) and is much bigger. They have way more international users and their US forums are more robust in areas where the SSP forums are lighter (ie. the Midwest outside of Chicago). A quick wiki search reveals that SSP is 4 years older with about 52,000 members. While younger, SSC has over 950,000 users.

Nice good looking on the info :tup:

[ljm]

I almost never post anything, but I did want to mention all the construction in North Natomas and by the airport. If you haven't driven up the 5 recently, there are several projects under construction. There are several areas (circled) where housing is under construction as well, some not shown on the map (south of Arena). Anyway, a lot is happening, maybe even a new zoo...wishful thinking.

https://lh3.googleusercontent.com/ywOUOrE9V4q6PpysLIfSENMjl0_CI2f-v7Z3EIgewDHrFSPxhCSy1WIcgJ9-DQzVh0Qr-p5M9cbcP1URrHMAJx0g-TmArtMzqZIrUIKn6Dhsghp230m8x8KTopcfLdJ2azZyDRipaw=w2400

1) Metro Air Parkway Interchange (under construction) - New freeway interchange connecting Metro Air Parkway, which runs up to the 'new' Amazon building. (https://www.bizjournals.com/sacramento/news/2019/08/13/metro-air-park-interchange-underway-with-more.html)

2) Greenbriar Development (under construction) - Nearly 600 acres, 3K homes, commercial, etc. https://www.cityofsacramento.org/-/media/Corporate/Files/CDD/Planning/Environmental-Impact-Reports/Greenbriar/GPO01GreenbriarConservationStrategy1417-1-00192414xC4B98.PDF?la=en

3) North Natomas Aquatic Center (under construction) - http://bcaarchitects.com/portfolio/north-natomas-community-center-and-aquatics-complex/

4) Spec commercial/industrial (under construction) - sat unfinished for a while, there are several multi-level spec building finishing construction.

5) Hilton Garden Inn (complete) - just recently finished

6) Centene Sacramento Campus (under construction) - currently, two large, 4 story office buildings as part of new campus that takes up that entire area off Arena/I5 - https://www.centene.com/news/centene-dedicates-sacramento-campus.html

7) Another hotel under construction - not sure what it is yet.

8) Natomas Crossing Apartments (under construction) - Not too exciting, but it's getting pretty dense right there. - https://www.cityofsacramento.org/-/media/Corporate/Files/CDD/Planning/Environmental-Impact-Reports/Final-Natomas-Crossing-Apartments-Addendum-P17062-WEB.pdf?la=en

9) Wyndham Garden Hotel (under construction) - https://www.wyndhamhotels.com/wyndham-garden/sacramento-california/wyndham-garden-sacramento-airport-natomas/overview

[CAGeoNerd]

Thanks for that summary, but I think it's safe to say most people on this forum are interested in growing urban density and building high rises, not depressing suburban sprawl. ;) :D

[Deno]

Is there a "groundscraperpage.com", by chance?

Or lowscraperpage.com

[sactivity]

I almost never post anything, but I did want to mention all the construction in North Natomas and by the airport. If you haven't driven up the 5 recently, there are several projects under construction. There are several areas (circled) where housing is under construction as well, some not shown on the map (south of Arena). Anyway, a lot is happening, maybe even a new zoo...wishful thinking.

https://lh3.googleusercontent.com/ywOUOrE9V4q6PpysLIfSENMjl0_CI2f-v7Z3EIgewDHrFSPxhCSy1WIcgJ9-DQzVh0Qr-p5M9cbcP1URrHMAJx0g-TmArtMzqZIrUIKn6Dhsghp230m8x8KTopcfLdJ2azZyDRipaw=w2400

1) Metro Air Parkway Interchange (under construction) - New freeway interchange connecting Metro Air Parkway, which runs up to the 'new' Amazon building. (https://www.bizjournals.com/sacramento/news/2019/08/13/metro-air-park-interchange-underway-with-more.html)

2) Greenbriar Development (under construction) - Nearly 600 acres, 3K homes, commercial, etc. https://www.cityofsacramento.org/-/media/Corporate/Files/CDD/Planning/Environmental-Impact-Reports/Greenbriar/GPO01GreenbriarConservationStrategy1417-1-00192414xC4B98.PDF?la=en

3) North Natomas Aquatic Center (under construction) - http://bcaarchitects.com/portfolio/north-natomas-community-center-and-aquatics-complex/

4) Spec commercial/industrial (under construction) - sat unfinished for a while, there are several multi-level spec building finishing construction.

5) Hilton Garden Inn (complete) - just recently finished

6) Centene Sacramento Campus (under construction) - currently, two large, 4 story office buildings as part of new campus that takes up that entire area off Arena/I5 - https://www.centene.com/news/centene-dedicates-sacramento-campus.html

7) Another hotel under construction - not sure what it is yet.

8) Natomas Crossing Apartments (under construction) - Not too exciting, but it's getting pretty dense right there. - https://www.cityofsacramento.org/-/media/Corporate/Files/CDD/Planning/Environmental-Impact-Reports/Final-Natomas-Crossing-Apartments-Addendum-P17062-WEB.pdf?la=en

9) Wyndham Garden Hotel (under construction) - https://www.wyndhamhotels.com/wyndham-garden/sacramento-california/wyndham-garden-sacramento-airport-natomas/overview

Isn't number 7 the new Centene Campus?

[ljm]

Isn't number 7 the new Centene Campus?

yes it is, sorry, put two 7's. It's the larger of the two. Anyway, no it's not high-density construction downtown, but it's nice to see Sacramento growing, not to mention some activity on this often silent thread.

[creamcityleo79]

Thanks for that summary, but I think it's safe to say most people on this forum are interested in growing urban density and building high rises, not depressing suburban sprawl. ;) :D

Also, in Sacramento, it's just 5 or I-5, not "THE 5". ;)

[ozone]

^^^ I'm not at all interested in any development in North Natomas, unless it's a public amenity such as a new zoo. North Natomas is the biggest 'bait and switch' development scheme in my lifetime. A total disaster and disgrace.

[innov8]

Will there ever be a increase in the private sector? and what can be done to gain the private sector? Do you think government has a lot to do with these proposal never going threw?

Sacramento high-rise residential is an unproven market, so the financial risk is
high. Travis Bickle has personal experience with this and has explained this in
depth on this forum. I would recommend clicking on his profile and then
viewing his previous posts. I believe in his last 20 posts you will find some
information as to why it’s not happing here.

For the last 20 years or so high-rise offices built by the private sector in
Sacramento only seem get built when they receive subsidies from the city.
The most recent was The US Bank tower on Capitol Mall, the developer David
Taylor bought the whole block for $1 from the city promising to build a
high-rise. This was a subsidy from the city to buy the land for almost nothing,
which made this project possible. Before that in the 1990’s, the Esquire Plaza
and Sheraton Grand were both financed with heavy subsidies also by Taylor.
Ever since then, most developers planning to build big projects also have
their hand out to the city… the Towers almost got $10 million from the city.
The arena and hotel/condo tower were also built with heavy subsidies by the
city to the tune of $272.9 million in addition to a mega land give away.
Just last year the proposed Metropolitan was asking for a $3 million subsidy
from the city, they did not get it and now it’s a dead proposal. CADA has had
to offered taxpayer-funded subsidies for every housing project they have ever
done up until the site at 14th & N Street.

At some point, taxpayer-funded subsidies stopped being a catalyst and started
becoming a crutch. All these subsidies from the City have manipulated the
market picking winners and losers.

I think developers building downtown are now beholden public money if they
wanna make a profit. David Taylor been the leader of the pack. $6 million to
build a mermaid bar, a nightclub and a pizza joint. $10 million for the
Cosmopolitan entertainment complex. $6 million in city redevelopment money
for IMAX Theater next door to the Esquire tower. I have not seen Taylor build
anything downtown without taxpayer-funded subsidies other than 1201 K
Street (Ban Roll-On Bldg.), he’s the king developer for downtown but only if
he receives subsidies. Taylor has received over $50 million in public funds for
all his projects, but he is also the one who can get things done when others can’t.

In addition, the cost Per Square Foot to construct a new tower is beyond what
the Sacramento market can pay right now. The current rate for Class-A office
space is $3.19psf, but a new tower has to ask nearly $3.75 psf to make new
construction profitable because construction cost have been rising and rising.
Only once has a high-rise in Sacramento (500 Capitol Mall) been built on
speculation and self-financed. No lending rules or needing to pre lease 50%
of the building before construction could begin. In Sacramento this unheard
of and the bet paid off for them.

I could go on and on… hope this is good info.

https://i.postimg.cc/N0kTfXRF/public-money.jpg (https://postimg.cc/xkqq6cxV)

[LandofFrost]

In addition, the cost Per Square Foot to construct a new tower is beyond what
the Sacramento market can pay right now. The current rate for Class-A office
space is $3.19psf, but a new tower has to ask nearly $3.75 psf to make new
construction profitable because construction cost have been rising and rising.
Only once has a high-rise in Sacramento (500 Capitol Mall) been built on
speculation and self-financed. No lending rules or needing to pre lease 50%
of the building before construction could begin. In Sacramento this unheard
of and the bet paid off for them.



hmmm, so $3,500 a month for a 2bed 1000 square foot high rise apartment, that doesn't seem that crazy actually.

[urban_encounter]

Also, in Sacramento, it's just 5 or I-5, not "THE 5". ;)

I say “the five”....

[urban_encounter]

hmmm, so $3,500 a month for a 2bed 1000 square foot high rise apartment, that doesn't seem that crazy actually.

Yeah I think we will eventually get there in time (meaning demand) but I don’t think we’re anywhere close yet. I saw a rental on Zillow (I think it was Zillow) for a 1 bedroom at $4100/month at 500N.

I don’t know if they’ll get that to be honest. It’s probably still posted online because it was only a few days ago. But I doubt there are many people willing to pay that price in Sacramento willing to justify a high rise tower. Who knows though because when it comes to development in Sacramento I’m always wrong.
:D

[creamcityleo79]

I say “the five”....

I've never known any Sacramento native to say "the ?". That's really a tell tale sign someone is from Southern California. Of course, there are always exceptions to the rule; but, there have been plenty of articles and discussions about this.

[TWAK]

hmmm, so $3,500 a month for a 2bed 1000 square foot high rise apartment, that doesn't seem that crazy actually.
That's about 1k more than my former apartment in the bay area....and more than mortgages in sac itself. Pretty good IMO. HOA fess though might be the killer.
I say “the five”....
secretly a so-cal-er haha

[SacTownAndy]

Nothing new here we don't already know, but interesting to see an outsider perspective... just wish it would move faster...


Sacramento, California’s booming downtown may double in size with Railyards project

https://www.curbed.com/2019/9/3/20837237/real-estate-downtown-sacramento-development-railyards

[SacTownAndy]

The glass curtain wall is starting to go up at the Natural Resources HQ

https://live.staticflickr.com/65535/48686032986_273a5a63e4_z.jpg

https://live.staticflickr.com/65535/48686032921_a69aaf9b13_z.jpg

https://live.staticflickr.com/65535/48686069011_a2c1e29df1_z.jpg

[urbanadvocate]

So is there about 2 more floors to go or have they topped out on steel?

[Pistola916]

Plan for Sacramento’s tallest building scrapped — for now — as CalPERS ends agreementact with CIM.

https://amp.sacbee.com/news/politics-government/the-state-worker/article234954932.html?__twitter_impression=true

[CAGeoNerd]

Plan for Sacramento’s tallest building scrapped — for now — as CalPERS ends agreementact with CIM.

https://amp.sacbee.com/news/politics-government/the-state-worker/article234954932.html?__twitter_impression=true

Uuuuuuuuuuuugggggggggggggggggghhhhhhhhhhhh

[innov8]

CalPERS set the bar lower than most for this tower begin construction. While a typical
high-rise needs to pre-lease 50% of the building, this one only needed to pre-lease 40%.
I also believe the per-square-foot asking rate of $3.75+ for Class-A office space was a
mark the local market could not pay when the average rate is $3.19psf but as high as $3.50psf.
https://www.ai-cio.com/news/calpers-terminates-real-estate-partner-development-plan/

[SacTownAndy]

Plan for Sacramento’s tallest building scrapped — for now — as CalPERS ends agreementact with CIM.

https://amp.sacbee.com/news/politics-government/the-state-worker/article234954932.html?__twitter_impression=true

Barry Broome (Greater Sac Economic Council) tweeted this in response to the article:


"We have had the anchor tenant secured for months. Our community should not accept this as an outcome. It's time we stop being a door mat."



So what gives? Anchor tenant secured. Sounds to me more like politics than economics.

[Bubb90]

The last two paragraphs are interesting

https://www.ai-cio.com/news/calpers-terminates-real-estate-partner-development-plan/

[innov8]

Barry Broome (Greater Sac Economic Council) tweeted this in response to the article:


"We have had the anchor tenant secured for months. Our community should not accept this as an outcome. It's time we stop being a door mat."



So what gives? Anchor tenant secured. Sounds to me more like politics than economics.

Berry Broome has the ability to provide more information on why he believes
this; instead, he offers a vague reference with no substance. Who is this
anchor tenant? How is this decision to cancel the current proposal make “us”
a doormat? The CalPERS board might be playing it safe if the economy is
softening, since they have taken ownership of the site they have spent
approximately $70 million and there little to show for it.

[ozone]

TBH I'm not all that disappointed. The tower's design was uninspired at best and I don't trust CalPERS to ever deliver something that will be. My hope is that they will sell the land. And I don't give a rat's ass if there's a high-rise on that site. There are a ton of other sites downtown for that. What I do not want is for the site to remain empty for another 10-15 years.

[urban_encounter]

Barry Broome (Greater Sac Economic Council) tweeted this in response to the article:


"We have had the anchor tenant secured for months. Our community should not accept this as an outcome. It's time we stop being a door mat."



So what gives? Anchor tenant secured. Sounds to me more like politics than economics.


You might be right about politics. I think Cal PERS was regretting its vote to move forward with the proposal since the board gave the go ahead with a slim majority. Still you would think they would need to propose something with enough significance that they can recoup some of the money that they’ve sunk into 301 CM, going back to their failed partnership with Saca.

Considering how long that empty lot has been sitting there i would be thrilled with a quality mid rise 8-12 stories. I think infill projects like the one proposed by Shornstein can help erase some of the blight downtown.

[urban_encounter]

The CalPERS board might be playing it safe if the economy is softening, since they have taken ownership of the site they have spent approximately $70 million and there little to show for it.

Cal PERS hasn’t been completely comfortable with the size/scope of the projects proposed (first the Towers and recently Tower 301). As far as playing it safe, they’re way past “safe”. They’re going to have to roll the dice if they have any hope of recuperating that $70 million. They’re in the business of maximizing investment opportunities for state employees and there’s a slim profit margin for them in Sacramento’s office market. Again, with their $70 million already sunk into that site, they may not ever see any profit for their investment and the board likely knows this.

Hopefully Cal PERS sells the property so that another developer can propose a residential project; albeit on a smaller scale so that something finally gets built.

[ltsmotorsport]

Berry Broome has the ability to provide more information on why he believes
this; instead, he offers a vague reference with no substance. Who is this
anchor tenant? How is this decision to cancel the current proposal make “us”
a doormat? The CalPERS board might be playing it safe if the economy is
softening, since they have taken ownership of the site they have spent
approximately $70 million and there little to show for it.

That's not how business deals work, real estate being no exception. The anchor may not even be unveiled until who knows when in the hopes that a new partner can salvage the project (in whatever form). Given CalPERS history, and the noted last paragraphs of the CIO article, I wouldn't be surprised if politics ultimately doom this project. Broome my be a ra-ra mouthpiece, but he's our ra-ra mouthpiece, and I can't blame him for really alluding to some possible shenanigans behind the scenes. I'm sure there's plenty of potential tenants who would look to fill space once built, and it's mighty tough to recruit companies if there's no space to put them.

On the project itself, it definitely isn't the most striking or innovative design, but it pushed the envelope in scale which is exactly what this city needs. It would've (or hopefully still will) provide much-needed premier office space, 100 more residential units downtown, over 20,000 square feet of restaurants and retail space, and publicly-accessible open spaces which would invite and engage anyone in or around the building. Make no mistake, this is a HUGE loss for Sacramento if it isn't built, especially as currently proposed. We have to demand more of ourselves, those who want to invest, and not settle for mediocrity (see 601 CM).

[Majin]

It's back to my suspicion that it's not just pure market economics that prevent these projects from being built. Either way, I agree with everyone else that edit: CALPERS should just cut their losses and sell the site if politics are preventing them from moving forward with anything. With MLS (hopefully) around the corner and more and more taller residential units being built, I'd rather just wait until the site is in the hands of a developer who is less mired in politics.

[Majin]

Also, if it's true that there was an anchor tenant ready to go... it gives me a SLIGHT hope that this project isn't completely dead yet.

[novatone82]

How do we upload pictures or videos , its asking for a url of image?

[sactivity]

How do we upload pictures or videos , its asking for a url of image?
This website uses almost archaic technology. I've tried to do the same thing. It hurts mt head to think about it.

[enigma99a]

How do we upload pictures or videos , its asking for a url of image?

There are a lot of services out there, try:

https://imgbb.com/

[SacTownAndy]

How do we upload pictures or videos , its asking for a url of image?

Your own pictures or one online?

[novatone82]

Your own pictures or one online?


Pictures that I've taken

[urban_encounter]

Also, if it's true that there was an anchor tenant ready to go... it gives me a SLIGHT hope that this project isn't completely dead yet.

It’s dead, because i truly don’t think CalPERS was really on board to begin with. I’m sure they’re trying to figure out how to cut their losses without incurring additional losses with absolutely nothing to show for it.

[Majin]

It’s dead, because i truly don’t think CalPERS was really on board to begin with. I’m sure they’re trying to figure out how to cut their losses without incurring additional losses with absolutely nothing to show for it.

I hope you're wrong but that could be the case. I'm sure Steinberg is busy making sure MLS gets finalized but once that is over and done with I really hope Steinberg starts using his political capital on making sure something gets done with 301CM very soon. Maybe making Gavin Newsom get involved in forcing CalPers to sell or do something with the property or higher ups at CalPers losing their jobs.

[novatone82]

https://i.ibb.co/Wxp3brY/sky1-2.jpg
https://i.ibb.co/4RqmCqP/20190916-164338.jpg

[novatone82]

https://i.ibb.co/dp7k1Zc/20190909-133335.jpg

https://i.ibb.co/jhfzsGt/20190909-133526.jpg

https://i.ibb.co/WPzmFMm/20190916-110039.jpg

https://i.ibb.co/j8w70z4/20190916-163951.jpg

[novatone82]

Did the best I could with the pictures I uploaded had to shrink them down in size so you wouldnt have to move around the whole screen to see the photos ,thanks enigma99, for the website, if anybody knows how to keep the quality of the picture fill me thanks

[Pistola916]

Did the best I could with the pictures I uploaded had to shrink them down in size so you wouldnt have to move around the whole screen to see the photos ,thanks enigma99, for the website, if anybody knows how to keep the quality of the picture fill me thanks

Looking at the last pic, I like how the building fills in the gap. It appears to be almost topped off. I have never seen a Sacramento high-rise rise so quickly. I’m looking forward to the exterior skin being placed.

[Majin]

Although I wish the natural resources building was taller, it looks like its going to fill in the skyline decently. Just need more to be built that all or taller.

[SacTownAndy]

Pictures that I've taken

I have the Flickr app on my phone and just upload photos I take to there, and then use the url link to upload to a forum.

[Clinton Robinson]

Niiiice Novatone!!!! You posted some good pics!!! I want to first off thank you and secondly want to say that I myself had some pics of DT that I wanted to post but got frustrated over the difficulty involved with posting and said F""k it! Anyway thank you VERY much! I look forward to seeing any other pics of DT SAC!!!

[TWAK]

Although I wish the natural resources building was taller, it looks like its going to fill in the skyline decently. Just need more to be built that all or taller.
From all angles it basically fills a gap it seems.

[Clinton Robinson]

I also want to say that I am impressed with how fast the Natural resource building shot up! I agree with everyone else on the fact that we need a couple much taller buildings that center piece DT and more density on both sides of the I5. I am truly disappointed that we are not seeing a bigger SERIOUS highrise boom in Sac like Frisco and Oakland! I do believe however we will see some amazing things happening in the near future! Too much potential in the city not too!! At least we are getting some fill in and that some of the best spots are not bieng developed with some garbage low rises that are grossly overpriced like LA did in thier first round of development 10 years ago or so!

[Clinton Robinson]

I think it fills in one of the gaps we had nicely! I would have really liked to see atleast another 100 to 150 ft more height or so but way better than Nothing!!! I think once the skin goes on that it will be a very nice building! I dont get DT like I used to so I truly appreciate your pics Novatone82 and all the others posted! If anyone else has any please post them!:) alright then, hope everyone of you on here has a amazing day and enjoys watching our Skylines grow as much as I do!

[SacTownAndy]

Still uncertain what they will do with the site, but some news at least.


CalPERS selects Hines for 301 Capitol Mall project

https://www.bizjournals.com/sacramento/news/2019/09/17/calpers-selects-hines-for-301-capitol-mall-project.html?iana=hpmvp_sac_news_headline

[Majin]

Not sure if this is a good thing or a bad thing?

[snfenoc]

I think Hines is in the running to be the developer of the Aggie Square project in Oak Park as well.

[urban_encounter]

Not sure if this is a good thing or a bad thing?

Well good or bad it’s back to the drawing board. Hopefully the third time is a charm.

As a side note my prediction that the project was dead was clearly off. It just goes to underscore what I always say; NOBODY knows less about Sacramento area development than me. I am always wrong. :haha:

[sactivity]

They'll spend a couple million dollars drawing pictures and then tell everyone it's too expensive to build.

[sactivity]

Any news on the new courthouse building? I can't find anything new about this project.

[innov8]

https://www.wsj.com/articles/calpers-in-talks-with-hines-to-develop-sacramento-parcel-11568755606

It appears CIM’s ouster was because of a lack of performance.

According to the Wall Street Journal, an outside consultant expressed concern about the
former developer CIM performance. CIM failed to deliver as much as $41 million in
rebates that were negotiated as part of the nine-year-old agreement. In addition, about
$41 million, a previously unreported figure, remains to be paid by CIM Group to Calpers
on a total $50 million in fee rebates promised under a 2010 agreement.

[Korey]

Welp more bad news folks, it looks like Cresleigh is either going apartments for 10 years and trying condos afterwards for the N & 14th site (Vantage), or might just sell the land back to CADA for the purchase price.

http://www.cadanet.org/wp-content/uploads/2019/01/Item-5-Site-21-Vantage.pdf

I was also poking around Vrilakas Groen's website because I heard a rumor that they were designing something for that large empty lot on Broadway and 34th. Didn't see anything about that (anyone else know anything about that property's future?), but did catch these renderings for a project across the alley from the Westminster Church, on 13th and O kitty corner to the Vantage site.

http://www.vg-architects.com/westminister/mrme4lwajxn05hlsyw9nahqq5fz9bx

Looks pretty good actually, I hope it gets built and the fate of the Vantage site doesn't have repercussions for that section of the neighborhood, along with the other planned CADA small unit project nearby (The Courtyard?).

[novatone82]

Niiiice Novatone!!!! You posted some good pics!!! I want to first off thank you and secondly want to say that I myself had some pics of DT that I wanted to post but got frustrated over the difficulty involved with posting and said F""k it! Anyway thank you VERY much! I look forward to seeing any other pics of DT SAC!!!


NO PROBLEM :tup: if the weather permits i will try to get some new pictures snapped, inno8 has some skills on the photo taking, hope to see some new ones.

[novatone82]

Any news on the new courthouse building? I can't find anything new about this project.

Clarks construction website saying expected to break ground October , not sure how accurate that is though:shrug:
https://www.clarkconstruction.com/our-work/projects/new-sacramento-courthouse

[urban_encounter]

Welp more bad news folks, it looks like Cresleigh is either going apartments for 10 years and trying condos afterwards for the N & 14th site (Vantage), or might just sell the land back to CADA for the purchase price.

http://www.cadanet.org/wp-content/uploads/2019/01/Item-5-Site-21-Vantage.pdf

I was skeptical that this project would get off the ground when Cresleigh was picked for the developer of the site.

[urban_encounter]

https://www.wsj.com/articles/calpers-in-talks-with-hines-to-develop-sacramento-parcel-11568755606

It appears CIM’s ouster was because of a lack of performance.

According to the Wall Street Journal, an outside consultant expressed concern about the
former developer CIM performance. CIM failed to deliver as much as $41 million in
rebates that were negotiated as part of the nine-year-old agreement. In addition, about
$41 million, a previously unreported figure, remains to be paid by CIM Group to Calpers
on a total $50 million in fee rebates promised under a 2010 agreement.

I read that in the print edition today as well. It sounds like a smart move by Cal PERS since they are in the business of maximizing their investment portfolio.

I also think it makes a project at 301 CM more likely at some point; although who knows whether it will be before the next economic slow down or what the Hines proposal will look like. If I were to bet though I suspect it will be something a bit less ambitious or risky for this market than ‘Tower 301’. I would be stunned if they came back with the same proposal.

[urban_encounter]

They'll spend a couple million dollars drawing pictures and then tell everyone it's too expensive to build.

Yeah considering that they’ve (Cal PERS) have spent over $70 million dollars and have nothing to show for it, that’s what I’m afraid may happen. But as I say over and over, I am never right when i make predictions either way, so hopefully we’re wrong.

[sactivity]

Clarks construction website saying expected to break ground October , not sure how accurate that is though:shrug:
https://www.clarkconstruction.com/our-work/projects/new-sacramento-courthouse

Yes, i've been to their site. But it has said that for quite a long time now. I was hoping to set something through other channels. But it's been real quiet.

[ltsmotorsport]

Welp more bad news folks, it looks like Cresleigh is either going apartments for 10 years and trying condos afterwards for the N & 14th site (Vantage), or might just sell the land back to CADA for the purchase price.

http://www.cadanet.org/wp-content/uploads/2019/01/Item-5-Site-21-Vantage.pdf

Doesn't worry me too much actually as this is fairly common with many projects and will give Cresleigh HUGE liability coverage for those 10 years. I believe 16 Powerhouse is mapped for condos but they have not been put on the market due to the 10-year liability term in CA.

[ozone]

I read that in the print edition today as well. It sounds like a smart move by Cal PERS since they are in the business of maximizing their investment portfolio.

I also think it makes a project at 301 CM more likely at some point; although who knows whether it will be before the next economic slow down or what the Hines proposal will look like. If I were to bet though I suspect it will be something a bit less ambitious or risky for this market than ‘Tower 301’. I would be stunned if they came back with the same proposal.


Exactly! And I’ve said many times that I could not care less if a tall tower gets built at that site. If Hines can deliver a smart mix-use mid-rise I’d be more than happy, probably more so than yet another boring 9 to 5 office building on the mall.

[Clinton Robinson]

Thanks Novatone82... I think those pics you posted are of really good quality and you did a great job capturing the scale of the projects! Hopefully we will get some more ground breaking soon! Sac has been growing man and is a Major City! Hopefully we get some more quality highrise development that REFLECTS accurately the strength of the city just a little more! I actually like the Natural resources building just wish the would have added a hundred feet or more to the overall height! Anyway thank you once again very much! Look forward to seeing some new pics and new developments!!

[enigma99a]

Exactly! And I’ve said many times that I could not care less if a tall tower gets built at that site. If Hines can deliver a smart mix-use mid-rise I’d be more than happy, probably more so than yet another boring 9 to 5 office building on the mall.

No way a simple mid rise goes on this lot. Far too much money has already been sunk into it. They basically have a 70 million dollar piece of land right?

[Son of Travis]

No way a simple mid rise goes on this lot. Far too much money has already been sunk into it. They basically have a 70 million dollar piece of land right?

Hello everyone. Haven't been here for awhile. A few comments.

I think the above is probably correct. CalPERS is still an investment fund that has to deliver a target return to demanding investors. Mid-rise probably won't get them there. We know high-rise anything is pretty risky in Sacramento, so I'd look for heavy office with smaller residential and commercial components. Something along the lines of 65% office, 30% residential, 5% commercial. this mix assumes that, as we've been told, anchor tenant already in place (and no way they announce who that is until deal is done). A move of that magnitude needs early commitment and plenty of lead time, so I wouldn't expect Hines to sit on site for too long before moving forward. I wouldn't be surprised if this anchor tenant pressured CalPERS to replace CIM for lack of progress and threatened to go elsewhere if no movement.

High-rise with that mix probably still doesn't pencil, so expect Hines to demand a significant waiving of City fees to reach viability.

City desperate to get that site filled, so I imagine they'll find agreement.

We should all be delighted that Hines replaced CIM. I've had minimal acquaintance with each, and that was awhile ago now, but the Hines teams were always among the sharpest I'd ever encountered.

Absolutely first-rate personnel and no reason to think that's changed. They don't like to screw around either. They'll drive a hard bargain with the city, and that could cause some delay, but overall I'd say the chances of something good happening on this site just went way up.

Quick point about apartments instead of condos. It's just too expensive and difficult to build mid-priced condos in California anymore. Everything to do with building in California, from fees to taxes to construction costs, is obscenely expensive and cumbersome, but the coup de grâce that prevents condo building in California is liability. The legal lobby in our state makes it far too easy to sue, and keeps the developer and builder on hook for far too long.

This results in only two types of product: Luxury, where you can better absorb costs through high prices and HOA fees, and publicly-supported, low-income housing. Please also note that even in this latter category, government demands, rules and regulations can often put your per/unit costs to over $500,000. That's not a typo, I've seen plenty of "low-income" projects that had a per unit cost of that or higher.

Also note that with low-income housing, the rules are so byzantine that there are few players involved and those that are are typically very "cozy" with local/state authorities. This burdensome and expensive process also impacts supply as with costs so high, it makes little sense to train a even a talented team to, in essence, learn "on the job" while they navigate the process. It's a classic barrier to entry that plays a role in even this market being addressed in California.

The result, with some exceptions of course, is few middle-class condos built in California now. It is particularly frustrating when you contrast the number built with demand.

So, to fill the need for housing, at least partially, you have little choice but to build apartments instead.

Just a quick example re costs - to get some multi-family projects insured today, you have to stipulate that you won't even put a map on it for 10 years (liability period). So you can't even take the first step to a for-sale product without incurring significant additional costs. This is just one of a thousand things, big and small, that drive up the cost of housing in California.

Vote for whomever you want everyone, but don't pretend for a moment that who's in the Capitol and City Hall doesn't have a severe impact on housing costs, affordability, and supply.

If you're still renting after 10 years in a good job, this is why.

As far as what type of product "should" go on what site, just remember that it doesn't matter what the developer thinks should go there, what the city thinks should go there (unless it's prepared to write a huge check), what activists think should go there, or what those of us who enjoy forums like this think should go there.

All that matters is what the lender thinks should go there, and as noted before, they are risk-adverse.

As always: here comes the caveat. I could be 100% wrong about all of this. There are few industries as easy to be wrong in as development.

So yeah, Hines tomorrow could announce twin 1000' towers and another Amazon HQ to fill one and condos starting at $325k to fill the other.

Should that happen, I will celebrate with you...

[Bubb90]

Does anyone have any recent news on the California fruit building hotel conversion? I have been searching and can't find anything