Tuesday, February 13, 2007

City Sues K Street Developers

It's about damn time.

This land swap agreement was supposed to happen before the year ended once the city acquired certain properties to be swapped agreed to by both Zeiden and Mohanna. The city has purchased these properties and once again Mohanna seems to be the thorn in the side.

Saca and Lambeth are named in the suit as well, even though I think Mohanna and Lambeth are the actually owners. The main player and problem has always been Mohanna though.

I've always been under the thought, the sooner Mo Mohanna owns less property in downtown, esp K Street, the better we will be.

The city has spend way too much time and money in an attempt to revamp K Street to let this fall apart at the last second. The 700 block was to be open for holiday shopping this year, but I can't imagine that is likey now.

People I talked to a short time ago said the agreement that was signed is legally binding, so we will see how this turns out.


City sues K Street developers
Sacramento Business Journal - 2:50 PM PST Tuesday February 13, 2007
by Michael Shaw

After a breakdown in negotiations, the city of Sacramento on Tuesday sued several owners of property in the 700 and 800 blocks of K Street, asking the court to enforce a land swap that was supposed to ease redevelopment on the pedestrian-oriented street.

The agreement, signed in April of 2005, allows developers to own entire street frontage along a block, rather than just the scattered parcels they now control.

Moe Mohanna, who owns several parcels in the 700 block, has been reluctant to trade property after the city evicted tenants and a building he owned in 800 block was destroyed by fire. He banded together with John Lambeth and developer John Saca to build high rises and retail shops in the 800 block. All three are named as defendants.

The land swap was designed to transfer ownership of Mohanna's and others' parcels in the 700 block to furniture magnate Joe Zeiden for a new Z Gallerie store and other retail shops. Zeiden is eager to trade parcels, said his representative, Wendy Hoyt. Zeiden is not named in the suit.

In return, the "Saca team" would receive the 800 block, where Zeiden owned property at 812 K Street, which had to be torn down due to the fire. The land swap uses the city's redevelopment agency as the go-between.

Mohanna could not be reached immediately for comment. He has said in the past he had difficulty getting his lenders to comply with the swap and was upset at losing rental income due to the evictions.

John Saca said he has no input with what the individual property owners have done.

"My hands are tied," Saca said, adding he was disappointed that he was named as a defendant. "Our deal is that I'd be the managing partner once the land was traded. Because the trade never took effect, the partnership never got formed."

The suit alleges the developers "materially breached" the contract and in November "began inventing a series of excuses to avoid timely transfer," of the parcels.

The suit, filed in Sacramento County Superior Court, notes the city itself bought property "for values higher than market value, under threat of condemnation, and providing relocation assistance," to make the deal happen.

Hoyt said the snag is hindering the possibility of Zeiden's plan to open the new store by fall.

The city wants the agreement enforced by a judge, or barring that, unspecified damages.


wburg said...

While this isn't as deeply satisfying as Mo Mohanna being prosecuted for solicitation of arson, I suppose it's a start.

Perhaps a "The Super" type justice would be appropriate: make Mohanna live under a plastic tarp in the wreckage of the buildings on K Street until Z Gallerie reopens on the 700 block.

Then make him pay Records on K Street's rent for a decade or so, so they can stay in the building.

And while I'm at it, Santa Claus, I want a pony for Christmas too!

LivingInUrbanSac said...

I do hope Records can find some space on K Street. That is one and only store I would miss.

"While this isn't as deeply satisfying as Mo Mohanna being prosecuted for solicitation of arson"

Glad to see someone else shares my same opinion on that topic.

19 & t said...

If this deal with Mo is not summed up in a couple months,I think Ziden will walk away from his plans for K Street. He doe's not own the land and I'm sure he has better things to do than wait for Sacramento to get it's act together.

LivingInUrbanSac said...

Zeiden does own a couple buldings on K Street, including one that was part of that fire...but I think I have to agree with you, he isn't going to wait forever.

wburg said...

I already miss Joe Sun (I'm wearing some Chuck Taylors I bought there, pre-clearance-sale, right now) and I never got a chance to miss Junta (it was closed down before I got to see a show.) I'll miss Bam Potpourri too.

Zeiden's kind of stuck here, as he is effectively in the role of the losing prisoner in the "Prisoner's Dilemna." I suppose I still pin my hopes on his initial RFP presentation at the post-JKL charrette workshop, where he seemed to really want Joe Sun and Records as part of the mix. The longer things get delayed, the more costs rise, the more things will have to be sacrificed--cheaper exteriors, potentially higher rents.

Anonymous said...

Too bad about Saca getting caught up in this. I think of him as as fairly positive force, and it looks like he's trying. I believe him when he says
"Our deal is that I'd be the managing partner once the land was traded. Because the trade never took effect, the partnership never got formed."

The suit is a positive step. I don't care if Mohanna is crazy, stupid, a jerk, or all of the above. But the data keeps pointing to him as the problem, and the promise of redevelopment of K Street is larger than his ego and/or mental health problems. He should be ashamed that such a fantastic and ripe area for development sits relatively dormant while the rest of downtown and midtown flourishes.

LivingInUrbanSac said...

From the artcle today in the Bee today, it says Saca is not named peronally in the suit since he has been cooperative and wasn't part of the partnership until the land was swapped.

The problem now is, even if the lawsuit is successful we are probably going to see the southside of the 800 block remain a mess for a while.

With the 10th and K theater, bar, restaurant and the 700 block retail (hopefully), add in the Cathedral Building at 12th and K with the Selland restaurant, we are at least seeing steps in the right direction.