Wednesday, July 20, 2005

621 Capitol Mall (aka Lot A)

621 Capitol Mall (aka Lot A)
24 Story Office Building
24K Ground Floor Retail

Developer: David Taylor
Architect: Hellmuth, Obata + Kassabaum, Inc (HOK)
Estimated Groundbreaking: Your guess is as good as mine

Completion: Your guess is as good as mine


The famous Lot A in downtown Sacramento. Say the words Lot A to any city planner, councilmember, or downtown advocate and you will mostly get a roll of the eye and big sigh.

Lot A has long been one of the most prized pieces of property in all of downtown Sacramento with its Capitol Mall address and proximity to the Capitol. Even with that distinction, it remains the surface parking lot its been for the nearly 20 years since city officals have been trying to get it developed.

The history of Lot A begins back in early 1988 during the last big office boom. The City of Sacramento held what was bascially a beauty contest for proposals from developers for the site. From what I know (I was pretty young at the time), the two finalist were:

Finally, in November 1989, Peter McCuen and Rockefeller Associates Realty Inc were selected to develop the property. The proposal (1st Rendering) called for a 40 story office building and a 20 story Ritz-Carlton (A Ritz in Sacramento?)

Unfortunately, as the case with the city development departments in those days (they are still slow now, but improving greatly) the process took entirely took long, nearly 2 years. The office boom ended in 1990 and lenders closed their doors to new office projects due to the economy and office leasing downturn. McCuen and Rockefeller dropped out of the development. If the city had acted a couple of years earlier or had a faster process, Lot A today may be developed.

With McCuen dropping out of the picture, the late Mayor Serna, desperate to bring jobs to Sacramento offered Lot A to any company whiling to put it's HQ on the property for $1 (Lot A was worth 10-12M) Needless to say, there were no takers.

Things stayed quite on the Lot A front for about 9 years. In mid-1999, the city decided to try and sell Lot A again. David Taylor (Developer of Esquire Plaza, Sheraton Grand, and the Ban Rollon Building) along with Westfield, owners of Downtown Plaza (DTP), made a push to purchase Lot A from the city. At the time Westfeild was looking to expand the mall and thought Lot A would be a good place to expand.

In Oct 1999, Taylor and Westfield were given exclusive right to negotiate for the purchase of Lot A. At that time, it was thought that development could start in early 2001.

In mid-2000, details started coming out of a 26 story office tower, 200 room Westin Hotel, and 150K retail space to be handled by Westfield. The following redering was for the office tower. Things were looking good.

As the case with Lot A, the good news only lasted so long. In Oct 2000, news came out that the Westfield expansion would be downsized to ground floor retail, instead of an extension of the mall. Westfield decided to expand on to K Street Mall toward 7th - 9th Street. As we know the expansion on to K Street never happen. My feeling, along with many other is it was a tactic used by Westfield decided to get the city to not back the potential retail developers Mills Corp from developing the railyard into a retail destination.

Lot A was finally officially sold to Taylor and Westfield in May 2001 for $11M. The fist phase of Lot A would be a 26-story office tower and 30K ground floor retail. For phase II, the city gave 3 options:

400,000-square-foot office tower with an additional 15,000 square feet of retail, 500-room hotel, or 65,000-square-foot entertainment-oriented retail center. We later find, phase II will eventually be something entirely different (and better)

The next step for Lot A was getting financed for the project and finding tennants for the buildings. Now, it was thought that construcion could be started in 2002, and done by 2004

Over 2 years later in late 2003 (wasn't it supposed to be finished by 2004??), financing was finally lined up by Taylor. The next supposed constucion timeline was to start in 2004.

This then, the design for the Lot A office tower has gone from the taller more slender and sleak version to the shorter (24 versus 26 story) more stubby looking rendering that you can see at the top of the page. The sqaure footage for the building dropped from roughly 400K to around 360K.

The only construction we have seen on the site is the building of the sales office that is currently built. Taylor is still looking for pre leasing in order to start construction of the first phase of Lot A, 621 Capitol Mall. Lenders usually require a certain amount of pre leasing before they will lend money, so far Taylor has ZERO. The latest news has been that Taylor is negotiating with Downy Brand Law Offices for a large enough lease to get started. That news is months old though and no news has been reported if they are still even talking or D&B will stay put at their current location at 555 CM.

Reports a couple months back said that Taylor was ready to apply for permits to start construction this summer. I'm not sure how serious to take those reports. It looks like "Phase II" will start before the supposed Phase I (read below)


Now that you are all caught up on the history (or at least as much as I know), what are my thoughts on it.

GET THE DAMN BLOCK DEVELOPED!!! I am so tired of driving by that site or looking outside of mens Macy's and seeing a surface parking lot when I could be on that site doing more shopping or grabbing a bite to eat.

I'm not a fan of the latest design of the building. The original Taylor proposal is much more of a "signature building" that the city was hoping for. Architects HOK are world class, but I have to imagine this one will not be in the book of bragging. The ground floor retail is nice and all, but a extension of DTP with maybe another department store would have been what that area needs considering the proximity to DTP and it's one department store.

In the end, given the high hopes for Lot A over the past 20 years, this part of Lot A is somewhat disappointing to me.

The one good thing about the latest design is that it's not nearly as much of a "block hog" as the first. The original looked like it took up the entire block, not leaving much room for phase II. We know now that phase II of Lot A will be Aura Condos with over 200 housing units and ground floor retail. It will also breakgound this year.

The part that bothers me about Lot A is the process that the city took the first time around. It took them almost two years to pick a developer. My God, I'm surprised any of them stuck around until the end. Lot A could have been developed 15 years ago if not for the process the city took.

The city has LONG been criticized for how it deals with developers and development opportunities. In recent years, much effort has been given to cleaning up the painfully slow processes. They recently hired away the planning director for the city of Portland to help revamp the department. Early reports in that he is doing an outstanding job and people in the industry are very happy with what is changing.

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