Thursday, August 14, 2014

Whole Foods Market Proposal

Proposed Whole Foods Market at 2001 L Street
Whole Foods Markets has proposed a mixed-use project on L Street in midtown. The project is not expected to break ground in 2016. The project includes 40,000-square-foot Whole Foods store on the ground floor as well as two floors of parking and four floors of rental apartments at 2001 L Street.

Tuesday, August 12, 2014

Friday, August 01, 2014

Downtown Plaza Demolition

Downtown Plaza, Sacramento, CA

This morning about 60 Turner Construction workers gathered at Downtown Plaza to officially start demolition work making way for a new arena. As reported by the Sacramento Business Journal, relatively little work will be visible for the first few weeks and the first buildings will actually start coming in down in two to three weeks. 

Tuesday, July 29, 2014

McKinley Village

McKinley Village

Site grading is still on track to begin within the next few weeks with the first homes to be built next year. With a total of 336 homes and an investment of nearly $135 million, this project will turn what has been an orchard and grassy area into suburban style development in the central city.

By contrast, the Centrage project proposed in the late 1980’s planned over 1 million square feet of high-density office, commercial, and residential uses, including 19 story office towers, a 20 story hotel, and 1,000 residential units costing $350 million. I think Sacramento once again missed an opportunity when this was rejected by the City Council shortly after the city’s Planning Commission voted 6-3 to support the project as well as the environmental community.

Centrage Project proposed for the current McKinley Village site in 1988

Wednesday, July 23, 2014

Capitol View Protection

Sacramento, CA - Capitol View Protection

Sometimes it’s good to review a little Sacramento history so as to better understand why the skyline seems to be mediocre at best. Although many proposed towers were never built because of economic conditions, many other high-rise proposals were limited in scale and canceled due to elected officials imposing height restrictions more than a year after developers started getting entitlements for their projects.

Back in 1991, both Mayor Anne Rudin and Sacramento Assemblyman Lloyd Connelly pursued an ordinance to limit height and protect the Capitol. At the time the City imposed the restrictions known as the Capitol View Protection, it ended up wiping out a total of three high-rise proposals, one by developer Giannoni at 14th & L Street at 19 stories and another by Benvenuti at 15th and K Street to be 14 stories, and the Hallmark Tower at 502’. The new law at the time limited all building to ten stories or 135’. All three buildings would have been too tall and blocked the Capitol view. At the time, councilmember’s said “they were committed to smaller buildings around the perimeter of the entire park” which discouraged the developers who started getting entitlements for their projects a year prior to the new law. All three towers were canceled out of frustration and uncertainty as to what the City might do to further scale down their projects.

The R Street Corridor also suffered a similar fate in the late 1980’s killing six high-rise proposals

Wednesday, July 16, 2014

Exceptional Opportunity

1118 - 1128 7th Street, Sacramento, Ca 95814

Ladies and Gentlemen, do I hear $3.5 million dollars, now $3.5 million, now $3.5, will you give me $3.6 million? Don’t worry about how much you’re spending, the cashier is keeping track for you. This site at 1118 - 1128 7th Street adjacent to the arena projects is up for sale for a yet to be announced price. My inquires with the listing agency have not been returned so I'm guessing here. In 2005, 1128 7th Street sold for $3 million, so selling both 1118 and 1128 together next to the new arena should fetch a nice figure.

How could any investor not jump on this opportunity?

Going once, going twice, sold?
1118 - 1128 7th Street, Sacramento, CA 95814 - Potential future hotel,
residential or mixed-use site 

Tuesday, July 15, 2014

Capitol Square Lemon

Capitol Square - 450 N Street, Sacramento, CA 95814

If there was ever a reason to demolish a high-rise in downtown, Capitol Square can certainly make the case. After being constructed only 21 years ago, $70 million has already been spent to repair all its ongoing mold growth, falling windows and other serious problems that have plagued the building. This 24 story tower was originally built by CalPERS in 1993 for $79 million, so spending nearly that much to fix its ongoing problems should be recognized as a reason to tear it down.  

The state bought Capitol Square from CalPERS who originally financed the high-rise in 2006 with the Board of Equalization occupying the entire tower with around 2000 employees. The sick building started showing signs of trouble back in 1998 with water infiltration. Costs to make repairs are now over $70 million and an additional $159 million could be spent over the next few years.

Currently moving through the State legislature, Assembly Bill 1656 would authorize the state to move forward with a site selection for the new headquarters, but the appropriation would need to be revisited by the Legislature and would not be made until the 2015-16 or 2016-17 fiscal year. In addition, it looks like nothing will change for Board of Equalization for at least 4 or 5 years while the scope of work is developed and construction documents, with repairs to the wastewater and decorative glass expected to take about three years to complete.

Whether or not the state decides to relocate the employees, it still must pay for the property’s bond debt service through 2021. The cost of that debt is currently $77 million.

Just last week a $50 million claim hit BOE over mold-related illness. On a good note... oh wait, there are none.