Korea company backs downtown hotel project, developers say
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By Bob Shallit
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Published: Monday, Jul. 6, 2009 - 2:25 pm
Developers of a proposed downtown high-rise hotel say they've nailed down the rarest of commodities: project financing.
South Korea-based Consus Asset Management has pledged to invest more than $91 million to build the 409-room, 25-floor hotel at 8th and K streets and a six-story parking garage at 8th and L, says lead developer Bob Leach.
"Even as bad as things are here, they think (Sacramento) will recover faster than other parts of the country," Leach says of Consus officials, who made the cash commitment after a series of face-to-face meetings in Korea over the past six months.
Leach says he and his partners made contact with Conus through Sacramento hotel-builder Parkcrest Development Corp.
Also on the development team: Moe Mohanna, the Sacramento developer who sold his K street properties to the city last fall for $18.6 million after a lengthy legal battle.
The development group, called USA Hospitality, currently has an exclusive right to negotiate with the city for the planned hotel site. That right expires later this month but Leach is confident it will be converted to a long-term deal once city officials see his financial backing.
"This is the only (proposed downtown) project that has financing tied to it," says Leach, who also developed the swank Le Rivage Hotel on the Sacramento River. "Why not let us run with the ball and score a touchdown for K Street?"
Leslie Fritzsche, the city's downtown development manager, says the development group has made progress. But, she adds, "there are still a number of things outstanding" that need to be resolved.
If all goes well, Leach's team expects to begin construction next summer on a Hilton, Marriott or Starwood hotel. The opening would be in late 2012.
He says the $136 million hotel project will increase the city's ability to host major conventions, spur business at Downtown Plaza and lead to store openings on the long-troubled K Street Mall.
"You get this project built and people will be lining up to put retail on the 700 block" of K, he says.