We all know construction costs have risen over the last couple of years due to the supply being eaten up by China and high fuel prices. These rising costs are affecting projects all over the country, including Sacramento.
The important infill project The East End Gateway project at 16th and O (others two sites are 16th and P and 16th and N), which was under construction and undergoing demo and site prep has been delayed due to construction bids that have put Loftworks 10% over budget.
The two sites are going to consist of 21 loft condo units for sale, 32 apartment, 8 for sale townhomes and about 23K in retail space. This is an excellent, excellent infill project that I have been excited about for years now.
The good news is material prices are expected to come down over with oil prices moving sharply down recently.
Loftworks is taking some time to do some value engineering to see where they can cut some costs. I try and attend the next CADA meeting on Oct 27th when an updated is expected and will report back.
My feeling is this will still happen, but it will just be delayed a bit. If they can get started back up again before the rainy season starts, we could see these two buildings done by very late 2007, early 2008. Originally, the timeline was Oct 2007.