Quote:
Originally Posted by novatone82
Will there ever be a increase in the private sector? and what can be done to gain the private sector? Do you think government has a lot to do with these proposal never going threw?
|
Sacramento high-rise residential is an unproven market, so the financial risk is
high. Travis Bickle has personal experience with this and has explained this in
depth on this forum. I would recommend clicking on his profile and then
viewing his previous posts. I believe in his last 20 posts you will find some
information as to why it’s not happing here.
For the last 20 years or so high-rise offices built by the private sector in
Sacramento only seem get built when they receive subsidies from the city.
The most recent was The US Bank tower on Capitol Mall, the developer David
Taylor bought the whole block for $1 from the city promising to build a
high-rise. This was a subsidy from the city to buy the land for almost nothing,
which made this project possible. Before that in the 1990’s, the Esquire Plaza
and Sheraton Grand were both financed with heavy subsidies also by Taylor.
Ever since then, most developers planning to build big projects also have
their hand out to the city… the Towers almost got $10 million from the city.
The arena and hotel/condo tower were also built with heavy subsidies by the
city to the tune of $272.9 million in addition to a mega land give away.
Just last year the proposed Metropolitan was asking for a $3 million subsidy
from the city, they did not get it and now it’s a dead proposal. CADA has had
to offered taxpayer-funded subsidies for every housing project they have ever
done up until the site at 14th & N Street.
At some point, taxpayer-funded subsidies stopped being a catalyst and started
becoming a crutch. All these subsidies from the City have manipulated the
market picking winners and losers.
I think developers building downtown are now beholden public money if they
wanna make a profit. David Taylor been the leader of the pack. $6 million to
build a mermaid bar, a nightclub and a pizza joint. $10 million for the
Cosmopolitan entertainment complex. $6 million in city redevelopment money
for IMAX Theater next door to the Esquire tower. I have not seen Taylor build
anything downtown without taxpayer-funded subsidies other than 1201 K
Street (Ban Roll-On Bldg.), he’s the king developer for downtown but only if
he receives subsidies. Taylor has received over $50 million in public funds for
all his projects, but he is also the one who can get things done when others can’t.
In addition, the cost Per Square Foot to construct a new tower is beyond what
the Sacramento market can pay right now. The current rate for Class-A office
space is $3.19psf, but a new tower has to ask nearly $3.75 psf to make new
construction profitable because construction cost have been rising and rising.
Only once has a high-rise in Sacramento (500 Capitol Mall) been built on
speculation and self-financed. No lending rules or needing to pre lease 50%
of the building before construction could begin. In Sacramento this unheard
of and the bet paid off for them.
I could go on and on… hope this is good info.
Prev
Linear Mode
