Sacramento Proposal/Approval/Construction Thread - III

[Web]

I can answer the Nassi and money thing......

He is a scammer who goes from town to town.......

someday no one will listen.

[TowerDistrict]

who is he scamming though? he's gotta return those deposits now, pay
the City for their time, and pay the engineers and architects eventually...

[Fusey]

How well are the L Street Lofts selling? Maybe medium-sized projects are the way to go at this point (at least until the market is ready again).

[Web]

Originally Posted by TowerDistrict

who is he scamming though? he's gotta return those deposits now, pay
the City for their time, and pay the engineers and architects eventually...

has it been shown that he ever pays architects and engineers??????
he probably mae some etra cash on the deposits......
The guy is a sleaze and Sac is lucky he didnt build halfa buildingand run away like reno etc etc

[TowerDistrict]

I'm not defending the guy.

It just goes back to what i've been saying for months now....
how the hell does he make money?

[Ryan@CU]

Originally Posted by TowerDistrict

Nothing is ever accomplished by
sitting on your ass and watching the world go by.

I'm printing this out and posting it on my bathroom mirror

[travis bickle]

Sacramento's in a tough spot right now. No high-rises went up in one of the best market cycles in history. As has been discussed, Sacramento got such a late start (due, in my view, to a lack of confidence), that nothing above 200' was built - and that was as part of a hotel. Trying to get financing now for what is, in Sacramento, an unproven market, will be difficult at best. The spectacular failures of the most notable residential high-rises doesn't help.

Frankly, I don't see it until at least 2009. And I mean to start the process. That means no steel until 2011.

Just look at it... We're going to need the present disastrous real estate markets to regain balance. We're going to need the mortgage markets to loosen again (obviously, not to the pre-bust levels of 2003-2006). We're going to need equity markets to regain strength. We're going to need to build upon the success of mid-town's mid-rises as proof of the market. This will be difficult in our current cycle.

We're also going to need the right political climate and real leadership. We'll need an aggressive and savvy redevelopment agency that can develop sufficient revenue streams to jump-start projects. And we'll need leadership that can effectively battle the "old Sacramento" that wants it to forever remain a cow-town that they can spend all of their waking hours complaining about.

I sincerely hope I'm wrong but Jeez...2009 may be optimistic...

[TowerDistrict]

I don't think waiting that long should be an option. The properties where some
of these highrises were to go have been vacated and now stand as black
holes in the city. I don't think it should be tolerated to empty out business and
sit on your proposal till you feel it's the perfect time. Even Mohanna keeps a
few buildings occupied while he "works" on his "redevlopment plans".

[travis bickle]

Originally Posted by TowerDistrict

I don't think waiting that long should be an option. The properties where some
of these highrises were to go have been vacated and now stand as black
holes in the city. I don't think it should be tolerated to empty out business and
sit on your proposal till you feel it's the perfect time. Even Mohanna keeps a
few buildings occupied while he "works" on his "redevlopment plans".

I'm with you TD. I wish it weren't an option. But Sacramento really fumbled the ball during the most conducive market for residential high-rises in history. Unless local leaders make an offer a developer can't refuse (can you imagine the squealing!!!), I don't see it anything before 2009. And even getting something started by 2009 will require a developer willing to take a huge risk with a large equity position and a welcoming political climate.

[TowerDistrict]

I guess that's what stings the most. When things looked like they were
going to get better for the downtown area, they ended up getting worse.
Who would've thought that the geaming buildings we saw on the horizon
would actually lead to increased blight?

[travis bickle]

Originally Posted by TowerDistrict

I guess that's what stings the most. When things looked like they were
going to get better for the downtown area, they ended up getting worse.
Who would've thought that the geaming buildings we saw on the horizon
would actually lead to increased blight?

It does sting. Badly. What makes it all the more painful is how close Sacramento came. Six months would have made all of the difference. Maybe even three.

The Towers had the sales. It didn't have the time.

It's painful to those like you who aim high and want to see Sacramento aim high.

Gotta shake it off and come out swinging. But this incredible opportunity for Sacramento to step out of its self-inflicted shadow was wasted. That's not to say all is lost. As I've repeatedly said, many great things are happening in a wide spectrum of Sacramento neighborhoods.

But it coulda, shouda, woulda been spectacular. Now it won't be for far too many years to come.

[friedpez]

I think Sacramento does offer a good market for highrise living, but I think the proposals were too high-profile and really skipped out on the midrange buyers. If, for example, the Metropolitan had been promoted first, I think it could have done really well; midrange buyers would have bought midrange units, and higher-end buyers would have filled out the top floors. And construction would have continued straight through this housing downturn, as we're seeing in other cities. Then, hopefully, the Metropolitan project could have spurred more interest in highrise living and kicked off more projects, like Aura & the Towers (for the affluent) and more mid-range projects (like the Library Lofts on I Street). Just my two cents, and yes, I could be wrong in many ways... this is just one way to think about it, I suppose.

[BrianSac]

Originally Posted by friedpez

I think Sacramento does offer a good market for highrise living, but I think the proposals were too high-profile and really skipped out on the midrange buyers. If, for example, the Metropolitan had been promoted first, I think it could have done really well; midrange buyers would have bought midrange units, and higher-end buyers would have filled out the top floors. And construction would have continued straight through this housing downturn, as we're seeing in other cities. Then, hopefully, the Metropolitan project could have spurred more interest in highrise living and kicked off more projects, like Aura & the Towers (for the affluent) and more mid-range projects (like the Library Lofts on I Street). Just my two cents, and yes, I could be wrong in many ways... this is just one way to think about it, I suppose.

I think Saca would have hit his 50% mark in sales if Aura were not on the table at the same time. The sales that Nassi secured could have been Saca's and the Towers would have got their financing. Saca was off by only 5-10% before CalPers pulled the plug.

[snfenoc]

I doubt competition from Aura had much to do with Saca's failure to deliver the Towers. The issue wasn't really the percentage sold, it was the high (and rising) cost of construction, combined with the market's inability to support that cost.

If your pricing structure will net you around $100 million (and that's the best you can get out of the market), but the estimated cost of construction is $130 million, I seriously doubt you'll get the necessary funding from lenders.

[travis bickle]

Originally Posted by snfenoc

I doubt competition from Aura had much to do with Saca's failure to deliver the Towers. The issue wasn't really the percentage sold, it was the high (and rising) cost of construction, combined with the market's inability to support that cost.

If your pricing structure will net you around $100 million (and that's the best you can get out of the market), but the estimated cost of construction is $130 million, I seriously doubt you'll get the necessary funding from lenders.

This is where Saca's inexperience may have cost him. I have had projects go over budget... but never $30 million over budget. I'd love to know who prepared his original budgets... and then never hire them.

[friedpez]

I agree that his budgeting was probably way off. But rising costs haven't affected all other projects throughout the state as they did in Sacramento. Many condo projects were announced in San Diego several years ago, but are still under construction right now despite the sharp rise in material costs over the past few years. I just think it was a perfect storm of factors in Sacramento: too many high-end projects that took buyers from one another, a lack of more moderate units, rising costs, a downturn in the housing market, and inexperienced (Saca)/idiotic (Nassi) developers, basically.

[ozone]

I understand the disappointment most of you feel that the highrises never materialized, however, speaking as a Midtown resident and business owner I can say that there's still a good bit of infill uc/or in-the-works and in one way the demise of the Towers and Aura was a blessing for the smaller projects.

Talking to L Street Lofts, it seems that people who had deposits in those projects have instead bought into these smaller projects because they are people who still want to live in the Downtown/Midtown area.

We can debate forever the whys & hows of the local highrise condo towers bust. We can get on the typical Sacramento negativity bandwagon and forget that good things are still hapening and that overall we are moving in the right direction.

[SacUrbnPlnr]

Originally Posted by Fusey

How well are the L Street Lofts selling? Maybe medium-sized projects are the way to go at this point (at least until the market is ready again).

_________________________
The L Street Lofts have sold just under half the 92 units so far. I was in the sale office this morning to arrange to a preview tour next weekend of the unit my spouse and I purchased. Sales staff are estimating completion at mid-December. We should know for certain soon.

Given the current market, I suspect that most interested buyers will want to wait until they can see the finished product (notwithstanding that several model units have been open for some time now). Perhaps sales will pick up after the Lofts are completed.

SacUrbnPlnr

[ozone]

Originally Posted by SacUrbnPlnr

_________________________
The L Street Lofts have sold just under half the 92 units so far. I was in the sale office this morning to arrange to a preview tour next weekend of the unit my spouse and I purchased. Sales staff are estimating completion at mid-December. We should know for certain soon.

Given the current market, I suspect that most interested buyers will want to wait until they can see the finished product (notwithstanding that several model units have been open for some time now). Perhaps sales will pick up after the Lofts are completed.

SacUrbnPlnr

No doubt that will be the case and that's what they are thinking as well. By the way I understand Aqua restaurant (of San Francisco) is going to have a branch in the L Street Lofts and The Real Pie Company is moving there too.

[TowerDistrict]

Not-so-incredible midtown hulk
will soon become the fashionable 2020 L
By Bob Shallit - [email protected]
Last Updated 7:36 am PDT Monday, October 29, 2007
Story appeared in BUSINESS section, Page D4



John Pappas doesn't have great things to say – yet – about the vacant office building his family owns at 2020 L St.

"It's one big mass – stark and institutional," he says of the hulking, six-story structure. But he brightens when talking about its future. A $3 million "extreme makeover" now under way will give the building "an eclectic modern feel that fits right into midtown," according to Pappas.

Some interior work has already been completed on the 9-month project. The once-drab lobby now has the feel of a stylish hotel, with terrazzo flooring, chic light fixtures, flat-screen TVs and contemporary art.

The 154,000 square feet of office space – occupied until 2002 by the state's Air Resources Board – will be updated and converted into "Class A (quality) at a Class B price," says Tom Bacon, part of a Cornish & Carey Commercial team of brokers who are marketing the building. (Rates will be about $2.25 per square foot, compared with $3 and up in similar space downtown.)

But the biggest change will be the building's exterior. A limestone facade will circle the building at eye level. New windows will be added and an aluminum-framed glass marquee will extend over the building's entry, highlighted by an art deco-inspired, illuminated sign with the building's new name: 2020 L.

An expansion of the building's recessed penthouse floor also is planned. Bacon says Cornish is in talks with numerous potential tenants, including law firms and environmental consultants.

The main pitch: good value, open floors that can accommodate large or small users and – a midtown rarity – ample parking in the Pappas-owned garage across L Street. Cornish is also touting the building's proximity to nearby eateries. Its promotional brochure even maps out the dining possibilities, from the upscale – Mulvaney's, Waterboy and Zócalo – to eat-and-runs like Togo's and Subway sandwich shops.

One way to a prospective tenant is through the stomach, it seems.