Wednesday, December 28, 2005

What does the future hold for Downtown Sacramento?

I have been telling people from all over, "You will not recognize Sacramento by the end of decade" That gives Sacramento 4 more years to make me right.

Since the beginning of my blog, I have said high density mixed use (retail and residential) development is going to be the key in bringing Sacramento's urban core to the next level.

Up until this year, there has been little success is getting housing built for people who want that urban lifestyle. By my accounts over the last two years, since Winter 2003, there have been only 239 units completed through out downtown and midtown. All of them rentals, and 133 of them just recently.

In my last post, I said this next year is going to be a big year for Sacramento. Here is part of the reason I think so.

We are going to see almost 700 housing units hit the market by the end of next year. That more than double what we saw the pervious two years. That's 1000 more potential people walking the streets creating a safe environment, 1000 more people to patronize restaurants, shopping at new retail establishments, and creating a better general economy in downtown and midtown.

Here is the other reason I think next year is going to be a big year. At my company we use the hockey stick analogy for our workloads. You start off increasing at a very slow pace, then all of a sudden BOOM! The same is often said about urban development. You start off painfully slow and once you hit that certain point, it's all upward from there.

Over 3400 units across 20 projects in varies planning stages. I expect 8 or so to breakground next year. The most likely in my mind range in all sizes: The Towers, Aura, Library Lofts, East End Gateway I, II and III, L Street Lofts, Capitol Lofts, 21st and T, The Lofts on R Street, Cooper Union, and St Anton (going on a limb for this one).

I think we are going to see the K Street projects get pushed back until 2007, as well as The Metropolitan, Epic, Capitol Grand Tower and 701L Street. That not really a bad thing since it will spread the projects out over a couple more years and help them be successful.

Best case, that would be 2000 units under construction by the end of next year (40% in 301CM). The biggest difference between these and the ones under construction or completed is that almost all of them would be ownership housing. We must have a good mix of ownership housing for people. The next step is to bring some projects along that are affordable ownership housing opportunities for middle income families.

I really could care less if I see another high-rise office tower go up in the next 5 years (even thought there will be a couple), people, people, people that don't leave at 5pm make a 24 hour city.

Also key to these projects is the fact that all of them have ground floor retail space. Once we get the people living downtown, we want them on the streets eating, shopping and going places. People create the 24-hour city, but they need places to go and enjoy city life that comes with city life prices. We do still need more cultural actives to go with the recent surge of restaurants and nightclubs though. A new live theater or concert space at 10th and K would do nicely

Call me "Sacramento's Biggest Fan" (yes, I have friends that call me that), but I really feel Sacramento is right at that point in the hockey stick where it we are going to see a huge boom. My only hope is that we do not hit the stick too hard on the ice and break it right at the bend. It wouldn't be the first time it happen. I am pretty confident this time around though.

Only time will tell, and this next year will be a good indication of things to come.


Anonymous said...

Hey, how come the Parthenon is not on the list? Are they not going to build it?

LivingInUrbanSac said...

The Parthenon is an office project. I guess since the topic was more around housing development I left it off.

The project does has an application on file with the city, but the design got a pretty negative response during initial review. I heard they going through a redesign right now because of that.

There are a lot of good aspects of the project as I mentioned a while back, but I do hope the design comes out a little less Caesars Las Vegas looking this time around.

Tsakopoulos was planning on bankrolling almost the entire project, so I do expect it to be built in the next year or two.

Anonymous said...

I am planning a high density project (80 Per acre) semi affordable for sale housing in Midtown that will be breaking ground in the first part of 07' I would love to hear your input on what these units should be.

LivingInUrbanSac said...

80 per acre is pretty darn good for midtown. I imagine if you are looking at a DUA that high developments like rowhouses and townhouses are not the route you are thinking

While I am always an advocate for mixed use development, I know it doesnt work in all areas. I really couldn't give any "advice" (though I do not even think I’m anywhere near qualified to do so) on what the units should be without having an idea of a lot of other things.

- How big is the parcel?
- New construction or reuse? Any demo needed?
- What are the other surrounding buildings/housing are in the area?
- Is it on a major street like 16th, JKL, or Capital Ave?
- What kind of financal capacity do you have?
- Any experience doing this kind of thing?

If I were you, I would consult with a company like Holloway Rasmusson & Molodanof who speciaize in real estate development. They are the consultants John Saca is using for The Towers project and have many others as well.

Good luck!

sacramento executive said...

Love your rundown on all the exciting things happening in changes by the day.

Did you forget the project at 20th and H (next door to Moxies) 8 units, fabulous industrial look - 6 at 1300 sq ft and 2 at 1100.

LivingInUrbanSac said...

Thanks Sacramento Executive.

I haven't seen the 20th and H property. I'll have to take a walk down there to check it out.

These for sale units?

sacramento executive said...

yes...4 units were still for sale a week ago.

Anonymous said...

I'm a big fan of your writing- keep it up. Do you know if there are projects planned on the vacant lots between 19th to 20th and P to R area? Just curious and thought you might know.

LivingInUrbanSac said...

Thanks for the compliment

Sorry for the delayed reply, I don't receive notifications when some one posts a comment and I totally missed this one

I know exactly which one you are talking about. I pass it everyday on the way home from work.

The only thing I know is the property is for sale. I have not heard anything specifically planned for that lot. Since the tracks run near it, I'm sure it would present some challenge to whom ever tries to develop it

Here is the listing on Loopnet if you are interested

Considering how close it is to the Safeway, it's prime land

Anonymous said...

You think a one bedroom one bath condo 700sq ft in the Sac Towers for $500K is "worth it". I know it does not matter if you won but if you see it as an investment, I wonder what it may rent for in 2008 which is when they expect to complete it

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