Sacramento: 301 Capitol Mall: A New Plan for The Towers Site - Page 81

urban_encounter · #**1601** Posted **Feb 15, 2007, 4:51 AM**

Default notice given on Saca Towers loan
Sacramento Business Journal - 7:34 PM PST Wednesday, February 14, 2007
by Michael Shaw Staff writer

A notice of default was filed Wednesday by a local investor who holds a $22 million loan on the Towers at Capitol Mall condominiums, just as the two principal partners in the stalled project are seemingly at odds about how to resolve millions of dollars of cost overruns.

The 53-story Towers project, a landmark building for Sacramento if constructed, is owned jointly by developer John Saca through his Saca Towers LLC and the California Public Employees' Retirement System, which committed $100 million.

Work stopped a month ago with little more than concrete pilings in the ground.

Through a series of written statements released Wednesday, John Saca expressed frustration with his "partners," or "partner" in varying instances, though he never names CalPERS directly, saying they have rejected proposals he has brought in to get bills paid and keep the default notice from being filed.

"This predicament is out of my control," Saca wrote. "I have proposed several alternatives to my partner on how we pay these bills, however, none have been accepted."

Saca did say of CalPERS: "I am not sure they are the right partner for this project."

While the default notice was not immediately available for viewing, Saca's representatives confirmed that it was filed by Joseph Mohamed Enterprises Inc. of Sacramento. The loan was originally made through First Bank and Trust for the $21 million needed to buy the land, according to Saca's representatives. Joseph Mohamed could not be immediately contacted Wednesday night.

Including that loan, a total of $35 million is already owed on the Towers project. Several liens have been filed by companies that have done ground work at the site.

Payments on the loan were due in December, but the Towers corporation does not have the funds to pay on that loan, Saca said. A six-month extension was offered, but the jointly-owned corporation did not accept the extension.

"I felt we should have accepted the extension," Saca wrote.

aufbau · #**1602** Posted **Feb 15, 2007, 4:52 AM**

^at least arco park is (or was) out in the middle of nowhere. 301 seems too prime a spot to remain undeveloped for long, it would be quite embarassing to have it sit in its current state indefinitely. I'm still holding out hope that this will pull through though.

sugit · #**1603** Posted **Feb 15, 2007, 4:55 AM**

I really really really really hate to say this, but I think this project is done.

When Saca starts saying thing likes "I am not sure they are the right partner for this project." about his 100M doallrs equity partner...that must mean things have gone very south.

urban_encounter · #**1604** Posted **Feb 15, 2007, 4:55 AM**

Quote:

Saca did say of CalPERS: "I am not sure they are the right partner for this project."

It's never a good sign when one side starts bad mouthing the other partner.

Secondly it's not like potential equity partners were (or are) breaking down Saca's door for a chance to have a part in this project.

I have to agree Costa; this is definitely not a good sign.

enigma99a · #**1605** Posted **Feb 15, 2007, 5:03 AM**

yay! 301CM is going to sit there for years. I wonder if it will be office someday?

brandon12 · #**1606** Posted **Feb 15, 2007, 5:07 AM**

^it seems to me that CALPERS is trying to wrestle complete control of the project from Saca. I feel bad for him, but in the end, it might be good for him be relieved of his role. It looks like I may have been wrong about the viability of this project. So to those of you that argued this point with me along the way, I concede at this point it looks less than rosy.
The weird thing is I really don't care that much any more. If it works out, fine. If it doesn't, my escrow account earning 4.5% is about the best investment I've made lately (as sad as that sounds). I'm glad that instead of giving them my deposit, I didn't try to buy another house last year with the intention of flipping it. Oh well...

foxmtbr · #**1607** Posted **Feb 15, 2007, 5:13 AM**

If worse comes to worse, hopefully CalPERS at least takes over and still builds it, even though it would be a shame to see Saca kicked out of his own project. I just pray that somehow, someway, these towers rise into the air.

Majin · #**1608** Posted **Feb 15, 2007, 5:22 AM**

I don't understand how this project can move so far (selling 400+ units and 90% piles driven) and still not get built. This is beyond madness and I will be extremely dissapointed if this doesnt get built. I don't even know what to say anymore.

ltsmotorsport · #**1609** Posted **Feb 15, 2007, 5:22 AM**

Well this really sucks. Like Brandon illuded to, I think the best thing now would be for CalPers to buy out Saca and finish the project. Saca has many other projects to concentrate on, so it's not like he's not in downtown anymore, but it is sad that he might not have his name on the project and that it'll be harder for him to do another for a while. I really feel for the guy and hope he can get other projects done successfully.

friedpez · #**1610** Posted **Feb 15, 2007, 5:43 AM**

Honestly, why doesn't Saca just reduce the size of the structures? Would it seriously be the end of the world to propose two 40-floor towers? That way, the Intercontinental would still work out. Or, a 53-floor and a 30-floor pair. If he reduced the size, it would eliminate several dozen units, which would mean that his 380 deposits would make up more than 50% of the total project and therefore maybe he could get more funding. Just a thought.

I think it'd be better to have two smaller and more fully-occupied structures than two that are only half-full. And if it turns out that more people wanted to live there and there wasn't enough room, well, then maybe that would send some potential buyers over to the various other proposed condo projects like Epic or the Metropolitan...

Majin · #**1611** Posted **Feb 15, 2007, 5:47 AM**

News like this seriously gets me very depressed and unmotivated to do anything with my life.

SacTownKing916 · #**1612** Posted **Feb 15, 2007, 5:49 AM**

Even though there are many things that still need to be worked out. I beleive that they have come to far already and Saca will do whatever he can and finish these towers. And can anyone explain what a "Defualt Notice" is.

joninsac · #**1613** Posted **Feb 15, 2007, 5:55 AM**

Shit. How could this project go so far south so quickly? Of all the condo towers proposed for downtown, I thought The Towers had by far the best chance of success. I guess it's not dead yet, but it sure seems headed that way. If the project does die, hopefully the good folks who bought units at The Towers would not be too put off by the experience, and would consider the Capitol Grand, Epic or Aura as an alternative.

innov8 · #**1614** Posted **Feb 15, 2007, 6:00 AM**

Quote:

Originally Posted by friedpez

Honestly, why doesn't Saca just reduce the size of the structures? Would it seriously be the end of the world to propose two 40-floor towers? That way, the Intercontinental would still work out. Or, a 53-floor and a 30-floor pair. If he reduced the size, it would eliminate several dozen units, which would mean that his 380 deposits would make up more than 50% of the total project and therefore maybe he could get more funding. Just a thought.

I think it'd be better to have two smaller and more fully-occupied structures than two that are only half-full. And if it turns out that more people wanted to live there and there wasn't enough room, well, then maybe that would send some potential buyers over to the various other proposed condo projects like Epic or the Metropolitan...

First, the project would be stalled even longer as the new
design would have to go back through the planning department.
Second, I would think any major change in the project
would void out any contracts signed with the hotel or
people who signed them because the whole image of the
Towers would have changed. An announcement of any major
down size would make the image that the Towers have been
selling a major disappointment.

I got wind of this project being dead last week... lets just
hope the Towers can pull off what Aura appears to be doing.

Phillip · #**1615** Posted **Feb 15, 2007, 6:11 AM**

I'm not going to gloat and I'm not going to dwell on it but regarding SacTowers I think I've earned the right to say "I told you so", just once.

innov8 · #**1616** Posted **Feb 15, 2007, 6:14 AM**

^ No, now you have said it twice... do you now feel better?

Phillip · #**1617** Posted **Feb 15, 2007, 6:15 AM**

Majin, your remarks are amusing.

Phillip · #**1618** Posted **Feb 15, 2007, 6:19 AM**

Quote:

Originally Posted by innov8

^ No, now you have said it twice... do you now feel better?

I read the news in the other thread first and replied to it there right away. This is the Towers thread though so I reposted it here and deleted it there.

sugit · #**1619** Posted **Feb 15, 2007, 6:24 AM**

...

downtownserg89 · #**1620** Posted **Feb 15, 2007, 6:29 AM**

WOW. not the best news! well i just have to ask this..

is there still hope!?!??!!? like, at all??