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

[sugit]

I highly doubt we see something like 800J on that site, but I wouldn't be suprised to see CIM and CalPERS bring the number of floors well below 40.

I really hope if Saca gets the boot, he can get out with his head held somewhat high. The man really tried to do something visionary and came pretty damn close to pulling it off, ...but like with most visonaries, someone else likly reaps the rewards (I think I remember brandon saying something like that a while ago) If he can get out of this with his skin, that could maybe hold some hope for his other properties.

[innov8]

Our small skyline will forever stay small... man, what a shame. I seriously
doubt will ever see a 600' ever built in this city. With bank requirements
needed to build an office building and very few big dreamers willing to risk it,
getting anything of real size will be slim to none.

[urban_encounter]

Originally Posted by innov8

I agree foxmtbr, I can't imagine at this time seeing a 800J go in at the Towers site

800 J is a quality project. It may not be a "skyscraper", but skyscrapers don't define a city as we've talked about many times.

Like Brandon said "at the end of the day, it's just one (or two) buildings." Sure it's unfortunate for John Saca that things didn't work out and you can't help but admire his bold vision. However a redesign of this project (or a scaling back) will not break the momentum that Downtown Sacramento seems to have going for itself right now.

Hopefully Cal Pers will make good on their earlier offer and pay his bills, while giving him some money to walk away with. Then he can turn his attention to making the Metropolitan a reality.

But everyone should try to remain positive about this, until it plays itself out over the next couple of weeks.

Let's wait and see what CIM comes back with (assuming it is still economically viable)...

I doubt that CIM will disappoint, should they decide to move forward with a project...

[innov8]

Originally Posted by urban_encounter

800 J is a quality project. It may not be a "skyscraper", but skyscrapers don't define a city as we've talked about many times.

I agree, they don't define a city. But this is a city where you can count every
skyscraper on two hands for a region with over two million people.

It's just sad... the man with the bow-tie has won again

[BrianSac]

I am worried that we dont have enough lots zoned to build a supertall considering the height restrictions around the Capital Building.

I would hate to see anything less than 600 feet at 301 Captiol Mall.

From the get go, I was worried that Aura would affect the Towers. If Aura had not taken Saca's potential buyers, Saca would had hit the magic number, 50% or whatever it was.

[arod74]

Wow, looking back just one year ago to Saca's ground breaking party to today I just can't believe how quickly things unraveled. You have to wonder what could have been if they had broken ground just 2 or 3 months sooner. Maybe they could have gotten past the 50% sell through to meet Deutsche bank's requirements before the real estate market around here tanked so hard. It hurts to think that maybe 15 or 20 units not sold was enough to kill this project as envisioned. I just hope Saca can escape with his shirt to hopefully see some movement on his other projects and something of significance will rise up from pile pit we have now.

[sugit]

Originally Posted by urban_encounter

but skyscrapers don't define a city as we've talked about many times.

You and I have always been on the same page on this. With that said, this was the one project I really wanted the stature. They def would have been symbols.

Maybe they could have gotten past the 50% sell through to meet Deutsche bank's requirements before the real estate market around here tanked so hard.

I'm sure the housing market didn't help, but I have to think te extra 70-100M on the budget was the biggest reason of all.

[joninsac]

The project that CIM could have in mind sounds quite a bit like one of the Capitol Grand iterations. Assuming a 230-room hotel, an office component of 50k-100k square feet and a single-tower design, we could still have quite a sizeable project, depending on the number of condo units CIM decides to build. The fact that 301 CM is an entire city block, along with cost, could keep the new project short. Hopefully CIM and CalPERS realize that living in the sky was one of the things that drew almost 400 buyers to the Towers in the first place. It will be interesting to see what they come up with, provided they move forward.

[enigma99a]

Can someone submit a request to have the 301CM thread taken out of the construction?



Here's what I expect CIM to do. They are not from around here and have no vision for Sacramento, so unlike Saca who was just doing it for civic pride, CIM will do whatever means the most money. I expect something in the 18-23ft range.. and around 220-320 ft. YAY!

[Jay916]

Originally Posted by enigma99a

Can someone submit a request to have the 301CM thread taken out of the construction?



Here's what I expect CIM to do. They are not from around here and have no vision for Sacramento, so unlike Saca who was just doing it for civic pride, CIM will do whatever means the most money. I expect something in the 18-23ft range.. and around 220-320 ft. YAY!

I just threw up in my mouth a little.

[urban_encounter]

I just spent the past three weeks touring the eastern seaboard,
Pittsburgh, Detroit, Toledo, Baltimore and Washington D.C. to name a few, and one thing everyone on this forum needs to understand is that there is an incredible amount of construction activity ongoing in the downtown area of Sacramento right now, especailly when meausred with other locales.

I realize everyones disappointed in the change of events and so am I. But in the grand scheme of things this is only a hiccup for DT Sacramento.

621 and 500 CM are u/c as is Cal STRS. Once the legal issues with the 700 and 800 block of K street is resolved that will move forward and the lastest plan for the Railyards with it's proposed theater district is very exciting; (and frankly a welcome surprise to me)

Again, I suspect we will see a quality project proposed and I also suspect that a developer will realize that combined both Aura and the Towers pre sold 600+ high end luxury condominiums. That's an incredible number for a city that has never built luxury highrise condominiums.

I think that some of the costs that Cal Pers has already absorbed with their $25 million investment will be spared in a new project. (such as site prep and some pile driving).

Remember, they already have the piles in place for one tower.
So they could conceivable still constuct one tower quickly.

I'm also certain that the city will make clear that they would still like to see a hotel component. Cal Pers (or CIM) can approach each contracted buyer and guage their interest in whether they would be intested in moving into a new mixed use project?

A mixed use office, hotel and residential tower could be what we will see.
They could conceivably just scrap one tower now? and hold off until the market improves in a few years. And although like Sugit, I doubt we will see anything over 40 strories, who can really say until CIM comes back with their recommendation?

CIM will lokk at the fact that nearly 400 buyers signed contracts in a flat market.

They'll look at the other 200 buyers who happen to be in limbo down the street at Aura.

They'll know that a project (once u/c) might also convince buyers who didn't sign their contract extesnsions, that their project is legitimate and will be built.

Again, I would just say, lets wait and see what happens.

Whether CIM/Cal Pers comes back with a 10, 20 or 40 story proposal, I have confidence that it will be a quality project..

[travis bickle]

So close... so damn close...

Obviously a tough week for those of us who love downtown Sacramento. Once the leadership at Calpers changed, this project was doomed. Saca had a visionary kindred spirit at Calpers, but he was replaced by another short-sleeve-shirt-at-the-office bureaucrat. If Saca could have started six months earlier, or if the Matrix system had been well in place...

The saddest sentence in the English language: "What might have been..."
It is a very bitter pill.

CIM is one of the leaders in urban development and their ability to get things done - especially in Sacramento - can't be understated, but The Towers would have taken Sacramento to a completely new level. It would have given a home-town boy the experience to build even more landmark structures and would have showed the financial communities that Sacramento is more than ready for this kind of spectacular project in a spectacular downtown. So much could have come from it. All put to a screeching, glass-shattering halt by some Calpers drone.

CIM is solid, but not exactly at the edge. And that's what this fabulous site demands. Whatever creativity CIM manages, I'm sure the new Calpers team will suck out.

Alright - let's get optimistic - If they can combine the Intercontinental (say 11 floors), office (say 14) and topped by housing (10-14 floors, 50-70 units) with ground retail and perhaps row homes along "L," That gets us to a single, tapering tower of nearly 500' and if squint - I can get it even higher.

I'll take it.

[innov8]

Towers project looks shakier
Developer misses buyout deadline for his 53-story dream.
By Mary Lynne Vellinga - Bee Staff Writer
Wednesday, May 30, 2007

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."

[Scooby]

CIM's involvement is good news for the project site. Obviously, it's not good for the people that are dedicated to seeing the original project come to fruition. To me, this is a positive sign that SOMEthing will be completed, (after a delay to re-design and resecure the financing). Saca has been over his head from day one. I'm in the construction financing world and guys just don't make this much of a leap in experience. Someone with Saca's background simply does not go from shopping centers to something of this magnitude with nothing in between. Maybe CalPERS is guilty of wanting him to succeed more than they should have. Looking at it objectively, they can probably see that they erred by giving Saca too much freedom. They're too experienced to have let this happen...shame on them. But they've righted the ship, in my opinion, and I'm confident that a reasonable, sensible, and feasible project will now be built at the site.

[JeffZurn]

So what kind of timeline are we looking at? Is it Aug 31st before we hear of what is it happen next? Does Saca back down earlier and Cal-Pers and CIM move in?

[ozone]

I think you guys have pretty much said it all. I would just add that every city has experienced this type of thing and that Sacramento is not in any way unique in seeing a big project fold or greatly reduced. I wouldn't say that our small skyline will forever stay small because forever is a long time. It's also useless to play the blame game until we really know what went on behind the scenes. I'm actually hopeful in that CalPERS is looking at ways to make something happen and that we'll not have a big hole in the ground for ten years.

[arod74]

I wonder about what CIM can do to keep those who have already signed contracts from walking out. Im pretty sure that most of these people signed on to have access to services like the fitness center, hotel concierge, and most importantly the height/views. I am not too confident about them keeping the intercontinental hotel portion of the project and who knows about all the other amenities. If I had to wager a guess, the safest bet for Calpers/CIM would be a lower quality hotel operator plus some scaled back condos along the lines of the new Marriot. And probably similar size unfortunately.

[sugit]

One issue I can see coming up here that I think has been overlooked is the land is default. I think it's pretty obvious that the only reason it has not been foreclosed on is Mohamed and Saca have a relationship.

It seem like if CalPERS ties to push Saca completely out, they he could foreclose on the land to throw a wrench in those plans as well. By him foreclosing, they gets a prime piece of land at a great great price.

[arod74]

Originally Posted by sugit

One issue I can see coming up here that I think has been overlooked is the land is default. I think it's pretty obvious that the only reason it has not been foreclosed on is Mohamed and Saca have a relationship.

It seem like if CalPERS ties to push Saca completely out, they he could foreclose on the land to throw a wrench in those plans as well. By him foreclosing, they gets a prime piece of land at a great great price.

Would it be that great a price after you have to pay off all the liens to clear the title?

[sugit]

Would that be his responsibility? I guess if the liens are on the property itself, you're right. I'd be really interested to know how that would work.