Sacramento: 301 Capitol Mall: A New Plan for The Towers Site

[urban_encounter]

Default notice given on Saca Towers loan
Sacramento Business Journal - 7:34 PM PST Wednesday, February 14, 2007
by Michael Shaw Staff writer

A notice of default was filed Wednesday by a local investor who holds a $22 million loan on the Towers at Capitol Mall condominiums, just as the two principal partners in the stalled project are seemingly at odds about how to resolve millions of dollars of cost overruns.

The 53-story Towers project, a landmark building for Sacramento if constructed, is owned jointly by developer John Saca through his Saca Towers LLC and the California Public Employees' Retirement System, which committed $100 million.

Work stopped a month ago with little more than concrete pilings in the ground.

Through a series of written statements released Wednesday, John Saca expressed frustration with his "partners," or "partner" in varying instances, though he never names CalPERS directly, saying they have rejected proposals he has brought in to get bills paid and keep the default notice from being filed.

"This predicament is out of my control," Saca wrote. "I have proposed several alternatives to my partner on how we pay these bills, however, none have been accepted."

Saca did say of CalPERS: "I am not sure they are the right partner for this project."

While the default notice was not immediately available for viewing, Saca's representatives confirmed that it was filed by Joseph Mohamed Enterprises Inc. of Sacramento. The loan was originally made through First Bank and Trust for the $21 million needed to buy the land, according to Saca's representatives. Joseph Mohamed could not be immediately contacted Wednesday night.

Including that loan, a total of $35 million is already owed on the Towers project. Several liens have been filed by companies that have done ground work at the site.

Payments on the loan were due in December, but the Towers corporation does not have the funds to pay on that loan, Saca said. A six-month extension was offered, but the jointly-owned corporation did not accept the extension.

"I felt we should have accepted the extension," Saca wrote.