Quote:
Originally Posted by mello
So securing financing is partly based on having union support? The court case with 7th and Market was cleared two years ago so how are unions still affecting the green light on Cisterra's project now?
Another thing I just thought of, Bosa is holding off on his ready to go semi twin to Pacific Gate because he feels demand for high rise condos is quite soft and is still trying to sell out Savina and PG.
Contrast this with CA Theatre, it's in a waaay less desirable part of DT than Bosa's site yet they think they can sell luxury condos there.... What do you guys think.
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You have to look at this from the perspective of an institutional investor. Investors hate uncertainty. They don't want to spend years or even decades sitting on a fat stack of cash when it could be invested and making them more money. They want to know exactly when their money will be needed and how much, so they can arrange for the funds to be available then and keep them working beforehand.
This is where 90% of NIMBY and trade union power comes from. If a developer is determined, and city leaders approve, the project
will get built eventually. But "community opposition" can create a cloud of uncertainty for investors. Will someone file a CEQA lawsuit? They'll probably lose, but there's a good chance a judge will file a stop-work order if there's even an outside possibility there really was something left out of the EIR. And what if there was? No way of knowing that for certain, and if there was that resets the whole environmental process. What if they lobby city council to get the project killed? In San Diego that generally doesn't work, but you can never really know with politicians. What if they start a protest in front of your future construction site and construction partner decides the bad press isn't worth it? And so on and so on...
If a project's schedule might randomly shift by 2-10 years, an investor just isn't going to make a commitment until that uncertainty is reduced. They're going to wait until the environmental process is complete (including resolving any CEQA challenges), the building permits are secured, and city hall has given their stamp of approval. But then, their money is still invested in other things so it will take time to pull it out of that and bring it to bear on your new development. Hence why you often see a 2-3 year wait after a controversial project gets its final approvals and the funding is completely secured/construction begins.
By the by, Bosa said demand for
waterfront high rise condos is soft. Aka the ultra-high premium market. CA theater's condos will be expensive, but not "we're going to throw in an on-demand car and driver service for no extra charge" level of expensive like Pacific Gate. Still room for growth there I'm guessing.