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

[doriankage]

This was on the News 10 website.

The major equity partner in the landmark Towers on Capitol Mall wants to replace local developer John Saca to finish the hotel and condominium project.

The California Public Employees Retirement System has been talking to a "world class" developer about taking over the stalled project.

The partnership consisting of Saca and the CalPERS broke ground last fall on the twin 53-story towers. But work stopped suddenly last month with contractors filing liens for $13 million in unpaid bills.

Rising construction costs have put the project at least $70 million over budget.

Saca notified by email hundreds of prospective condo buyers who placed deposits that he's defaulted on the $22 million loan for the block of land at 4th Street and Capitol Mall.

A default is the first step in the 111-day foreclosure process.

"Rest assured that I am working diligently and doing everything possible to move this forward and fulfill the dream of bringing this project to the Sacramento Community." Saca said in the message.

CalPERS confirms it has only invested $25 million of the $100 million it committed to the project.

Spokeswoman Pat Macht told News10 CalPERS stopped contributing to the partnership after Saca failed to meet his contractual obligations.
I wonder what they mean by this?

Saca is not yet able to access a $370 million construction loan from Deutsche Bank, or an $11 million grant offered by the city of Sacramento when the buildings are close to completion.

Macht suggests one possible solution is to remove Saca as the developer.

"We made him a great offer where we bring in a world class developer with extra money and he would still be a part of it and he turned us down," Macht said.

Macht said CalPERS is open to other alternatives, including the possibility of Saca finding new investors and buying out CalPERS.