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

[enigma99a]

Originally Posted by econgrad

hmm...I see several posts stating he should have done a smaller project. Yes, smaller projects have more of a chance of being built, but lets not start believing Sacramento can't get large projects done, I mean, let us hope not. I would like to see something even bigger than the Towers someday soon... Here's hoping.

Too bad Nassi can't buy the Metropolitan's land and build Epic where it was going to go...

[Web]

Can Nassi even buy land????

[kryptos]

Originally Posted by Web

Can Nassi even buy land????

lol^^


as far as thinking that sactown cant get big projects to become reality, i dont think that at all, but i also remember that you have to crawl before you can walk...and putting one tower there is better than none at all

i think things are gonna start falling like dominoes now...towers, aura, epic, capital grand, etc...atleast the US bank tower came to fruitition

[sugit]

I can't wait until the next wave of news on these projects comes out and the goods news is for The Towers and the bad news is for Aura this time around....it's going to be funny watching people start jocking Saca again and ripping Nassi....

I can see it now

"Saca extends option to buy out CalPERS"
Random quote: "What determination by Saca. More developers in this city need to be more like Saca."

"City extends Aura loan for 30 more days"
Insert random Nassi bashing comment quote: "What a joke. He's been saying he's going to breakground for a year and half now. First he says 80 % sold out, then 70%, now 55%?!

....then a week later watch every flip the switch again when the news reverses itself again. This seems to be the pattern over the last 6 months or so.

if it would have been just 1 tower at 50 stories instead of 2, the funding would have been there and we would be watching it grow right now

I don't understand why he doesn't just build one right now....he still has a few hundred buyers and a hotel...I don't see why this can't be funded essential 100% sold, assuming buyers agree to move from Tower II to Tower I. I have to imagine this can still be an option, but has been crossed yet, esp since that was the original plan.

[Web]

Well what project has this Nassi done without problems? Denver/Reno/Sacramento........

How can New York buy into the hype?????

[urban_encounter]

First let me say objectively, that despite the best efforts by John Saca, it is fairly clear that this project as currently proposed wont be built.

I've listed the hurldes facing this project before since the halt in construction and so there's really no point in repeating them again.

While I admire John's bold vision for Sacramento, it is now clear that this project (as designed) was too big for Sacramento's first highrise condo project; especially in a falling housing market.

All that being said, I still believe that havinig Cal Pers on board as a partner in this project represents the best opportunity to see a quality project built at 301 CM. A project that is more in scale with downtown Sacramento and a project that can pencil out in Sacramento's current housing market. There simply isn't another equity partner waiting in the wings to rescue the current proposal for 301 CM, and I believe that Cal Pers will want to see some kind of return on their investment.

Highrise residential housing can still be (and I believe will be) eventually built, at 301 Capitol Mall, once the project is redesigned and John Saca steps aside.

[Scooby]

A significant change in the project would bring everyone back to the proverbial "drawing board". New financial projections, new plans, (I can't see a "major" change on a project this size being handled as a modification), and a new lineup of who's contributing what as far as $$$. I'd say that the project that we all knew is dead. Projects, like people, have a history of being resuscitated, but I wouldn't put much hope in that. The horse is dead.....time to dismount. Does anyone know if folks are jumping ship yet? Saca's luck ran out with the decline in the housing market.

[Phillip]

What will mark an official end?

As long as Mr Mohammed doesn't foreclose on the note for the land Saca can keep saying "We're still looking for financing. We're very close." forever. At some point does Saca make an announcement that it's over? When are deposits returned to purchasers?

Looking forward what are some of the possibilities for this key downtown parcel?

What's the market for downtown office space now? Is the market for office better than residential now? Or will the new USBank tower be enough office space for awhile?

Are two smaller condo towers feasible now? I think that would mean starting from scratch, yes? New developer (probably), new design, new approval, starting the sales process all over.

Any speculation about what the future of 301 CM will be?

[innov8]

It's possible that Saca could be bought out of the Towers project entirely and
a developer with better connections and financing could see the project thru.

I don't think the Towers saga is over yet Phillip... all the signed extensions
have a start date of August 31 and the Towers would then have to be topped
out two years from that date.

[Phillip]

Three more months before we know for sure then. Let's see if we can get this thread up to 3,000 posts now!

[Web]

I wonder who is paying for that arrow board on capital mall.........its gotta be rented ..........

and open up some of the lanes!!!!

[innov8]

Your thoughts are thought provoking web.

[urban_encounter]

Towers project looks shakier
Developer misses buyout deadline for his 53-story dream.
By Mary Lynne Vellinga - Bee Staff Writer
Last Updated 12:17 am PDT Wednesday, May 30, 2007
Story appeared in METRO section, Page B1


Downtown high-rise developer John Saca missed Friday's deadline to buy out his estranged partner, the California Public Employees' Retirement System -- leaving the fate of his twin condominium towers more precarious than ever.

"Things did not turn out the way we were hoping," Saca said. "We had under 60 days to raise over $60 million for a project that was really underwater. ... We just ran out of time."

The giant state pension fund now has a week or two to decide whether it wants to take over the stalled, debt-ridden project at the entrance to Capitol Mall and move forward without Saca, CalPERS confirmed Tuesday. The pension fund invested about $25 million with Saca before cutting him off in late 2006, citing cost overruns.

CalPERS has brought in the CIM Group, a Los Angeles-based developer, to decide whether it would make financial sense to pursue a significantly scaled-down version of Saca's 53-story condominium and hotel towers. CIM's idea for the site also would include some office space, said CalPERS spokeswoman Pat Macht.

"CIM is taking a look at it, and they're conducting their due diligence," Macht said.

CIM also has approached the city about a possible subsidy for the project, Macht said. The city had committed $11 million to Saca to help buy fixtures and furnishings for the hotel once it was constructed.

CIM is best known in Sacramento for its recently completed seven-story loft apartment project at Ninth and J streets. CalPERS was also an investor in the project. The city of Sacramento contributed about $16 million in redevelopment funds.

Sacramento Assistant City Manager John Dangberg would not discuss the details of the city's discussions with CIM or CalPERS. But he pointed out that the City Council's main focus for redevelopment spending remains the more blighted area around J, K and L streets -- not the Capitol Mall.

"The City Council chose to step away from those priorities to assist (Saca's) project because of its impact," Dangberg said. "If that project goes away, I think what still stands is the council's priority for J, K and L."

The current cloud hanging over one of downtown's most visible development sites is far from the optimism city leaders and Saca once voiced about his chances of building the West Coast's tallest residential structures.

Saca is a shopping center developer with no previous high-rise experience. His family is best known for founding the Filco appliance chain. Yet he captured the public imagination -- and nationwide attention -- with his ambitious plan to build something grander and taller than his hometown had ever seen.

Even as the housing market stalled, Saca still managed to secure deposits for about 400 units in The Towers. But construction costs soared. The CalPERS executive who made the commitment to invest $100 million in the project left the pension fund, and CalPERS managers became increasingly uncomfortable with putting in more money. The pension plan pulled the plug.

Construction on The Towers stopped in January. In February, Saca defaulted on the loan he used to buy the prime site at Third Street and Capitol Mall, once the home of the Sacramento Union newspaper.

Contractors who worked on the site have since filed liens totaling about $13 million.

"It can't get much worse," Saca said Tuesday. "There's a stigma on the property now, and it's hard to overcome that."

The $22 million mortgage on the construction site has been purchased by Joseph Mohamed Sr., a Sacramento investor who is inclined to give Saca plenty of breathing room. Mohamed has a personal reason for wanting to see Saca move forward.

"We bought some units there too that we'd like to live in," Mohamed said. "So we're going to do whatever we can to make it work."

About three-quarters of Saca's original buyers also have agreed to extend the terms of their purchase contracts -- another key element in keeping the project afloat, he said.

Still, the interest and penalties on his debt continue to pile up, Saca said, making outside investors reluctant to get involved. Complicating matters is his contentious relationship with CalPERS. Saca said that also makes potential investors leery.

Saca said he's still hopeful that CalPERS will wind up agreeing to accept something less than the money it has spent. In that case, it would be easier to find new investors, he said. If the property goes to foreclosure, the pension fund's entire investment will likely be lost.

Saca said Tuesday he would be disappointed if the CIM plan moves forward.

"The sad thing is that CIM doesn't want to build (my) project," he said. "They would basically throw away the plans and start from scratch."

[foxmtbr]

Oh God... CIM... I can only pray that the Towers don't become the next Metro Place...

[urban_encounter]

Originally Posted by foxmtbr

Oh God... CIM... I can only pray that the Towers don't become the next Metro Place...

Be thankful that CIM stepped in to build 800 J street. That was one of Downtown Sacramento's most blighted blocks for many, many years.

If CIM can construct a quality project at 301 CM like they did at 800 J street, that brings people downtown to live, city leaders should give them the key to the city. (I'm joking about the key of course, but certainly city leaders would have to be thankful)..

The alternative is what you see down there now and the last thing Sacramento needs is a hole in the ground or surface parking lot at the gateway to the Capital for the next 20 years.

CIM's interest at this point, can only be viewed as a postive development imho. Assuming that they conclude that a project can still pencil out.

[foxmtbr]

Good point. Whatever they do will be quality, but it's still a shame to not see the original Towers go up as planned. We'll just have to wait and see what happens. Maybe we can come out of this with at least one good-sized tower.

[sugit]

CalPERS has brought in the CIM Group, a Los Angeles -based developer, to decide whether it would make financial sense to pursue a significantly scaled-down version of Saca's 53-story condominium and hotel towers. CIM's idea for the site also would include some office, said CalPERS spokeswoman Pat Macht.

This was probably CalPERS game plan the entire time. A few people have mentioned how this how they work, looks like they may win again. CIM is good developer, they are still on the only ones to complete a major housing project DT...if they are stepping in, we should see something good there...I don't see much chance of The Towers as planned stay for much longer though. 53 stories it will not be...

I just hope housing, hotel and retail can still stay the main focus of the project, even if office is included.

[innov8]

"It can't get much worse," Saca said Tuesday. "There's a stigma on the property now, and it's hard to overcome that."

Saca sounds like he's given up and it appears CalPERS has CIM waiting
in the wings. I agree foxmtbr, I can't imagine at this time seeing a
800J go in at the Towers site Now that John has said this discouraging
quote, I don't see any good news coming out of the Saca camp ever again
concerning our beloved Towers

[brandon12]

[urban_encounter]

Originally Posted by sugit

I just hope housing, hotel and retail can still stay the main focus of the project, even if office is included.

I agree..

In fact if they can still include the InterContinental Hotel component, (or any hotel) we might still see a tower go up. A tower with hotel, office and a much smaller number of residential units might be enough to peek CIM's interest... But like you said Sugit, it wont be 53 stories.

In any case CIM's early involvement, gives me hope that a quality project will evenutally get built there.

We'll see....