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.

The Metropolitan

35 Stories
10th and J Street
320 Condos from 700 to 1300 Square Feet.
13,000 Square Feet Retail

Developer: John Saca
Architect: Kwan Henmi Architecture/Planning

John Saca has announced his third condo tower for downtown Sacramento. This one is proposed for the north side of 10th and J across from Caesar Chavez Park on the land purchased from Dean Ingemanson (Remember him from Metro Place?). Saca notes that this building "will be more cost effective," and "There will be fewer amenities." This will help bring prices down a bit from the much talked about Towers at Capitol Mall, but they will still be a little pricey for most people.

I must say, John Saca is determined to carry downtown Sacramento revitalization on his back if it breaks him. I wish the man nothing but the greatest success. I have much admiration for people like him that take major risks in life. If you happen to stumble onto this John, best of luck. I'm pulling for you and I know a lot of people are as well. From what I have heard about you, I have little doubt you will succeed.

Being involved in 301CM as well as the the very important K Street proposals though, I just hope he is not over extending himself.

On a higher level note, The block of 10th and J is probably the most blight block in downtown now that ‘the hole in the ground’ is being developed into Plaza Lofts. That's saying quite a bit especially with K Street Mall right next door. The south side of that block has a development application on file with the city from St Anton LLC and The Cordano Family for a 23-story condo high-rise with some 230 condo units, office space, and 15K of retail space. (Sorry, haven’t seen able to find a rendering yet) They were actually the first high-rise condo proposal announced in Oct 2004, but not much was made of it since 301CM came along only weeks later

I have a feeling that if people are looking for a more reasonable ownership housing options to live in downtown proper, you are going to want to keep your eye on the St Anton project, as well as the Library Lofts at 8th and I. Since those two are “smaller” buildings, I have a feeling we are going to see the per square foot cost come down a bit compared to the other luxury developments. (I know, I know, still not “affordable” but much more reasonable)

The trifecta of Plaza Lofts (225 units and 21K Retail), The Metropolitan, and the St Anton Building, if all developed would over put over 1000 new residents and over 54K of high quality retail space around Caesar Chavez Park. This would without a doubt create some amazing energy and really put some life into CC Park outside of just Concert in the Park in the summer time.

Next year is going to be an interesting year in Sacramento. If we can see a few of these mixed-use proposals breakground, we are going to see a large influx of people living in downtown over the next 2-3 years. As I have mentioned many of times, that is the key to a 24-hour city.

Friday, December 16, 2005

The Towers land a 230-room InterContinental

Wow...I had a feeling it was going to be a good hotel, but this one beats my expectaions. From those unfamiliar with InterContinental, they are also in SF at the Mark Hopkins in Nob Hill. That is one of the best hotels I have ever stayed in.

The spa that is mentioned in the article is a swanky place from El Dorado Hills, The Spa at La Borgata.

This is definatly a HUGE check mark on the financing check list for banks. I also have to imagine this boads well for some higher end retail that probably woulnd't mind sharing the same building as an InterContinental and some 800 high end condos.

Between the two sales events Saca has held, he currently has 10K deposits from 450 people. Which basically mean everyone who was invited to the sales events put a deposit down for one.

That's over 50% of the building. 50% is usually the magical mark on these condo projects in banks minds. Developers are required to hold a certain amount off the market until construction gets further along to account for any increase in costs in construction.

As long as he gets the non-refundable ones in a couple of months, I have to imagine that financing will be much easier for him.

Downtown condo venture lands swank British hotel
Sacramento Business Journal - December 16, 2005

The Towers on Capitol Mall has lined up its luxury hotel -- a 230-room InterContinental.

The deluxe British chain will open the hotel on the lowest 18 floors of the first of the two 53-floor towers that developer John Saca plans to build at 301 Capitol Mall in downtown Sacramento.

The hotel would be the second InterContinental in California -- the other is on Nob Hill in San Francisco -- and the 14th in the United States. There are 130 overall, in 60 countries.

Saca and InterContinental have finalized a contract to bring the hotel to Sacramento, Saca said Friday in a press release. The deal shows, he said, that Sacramento is ready for the chain's "impeccable services and amenities."

The InterContinental is the most luxurious brand in a reservation network that includes Crown Plaza, Holiday Inn, Staybridge Suites and Candlewood Suites. People who live in The Towers will have access to the hotel's services, including concierge, maid service and valet.

As of late November, Saca's company had accepted refundable $10,000 deposits on 450 of the approximately 800 condominiums planned for The Towers. This month, the owner of a plush El Dorado Hills spa has been making plans to buy space in the high-rise for what would become the area's largest luxury spa.

Saca also plans to add a fitness center, stores and restaurants to his project, and has intended all along to add a hotel. But he didn't say which one until today.

Crew recently demolished the former building of the Sacramento Union newspaper to prepare for The Towers' construction. Saca expects to start building the condos in January.

InterContinental Hotels Group PLC bases its U.S. operation in Atlant