I heard this was coming anytime now, but with so many rumors about the project it's hard to know what is true or not. I even heard that CalPERS only got the 25M back with no return, I have no way to verify if it is true or not though.
From the tone of the article is sounds like the new partner(s) are just around the corner. Saca seems to keep pushing back the obstacles on this project, even if it is taking longer that he hoped. The current obstacle would have to be getting those new contracts signed, 250 seems like a nice start, and getting the new equity partners signed.
From what I understand Joe Mohamed and Saca have known each other for years and land under default is not an issue. Given the timing of when Mohamed bought the note on the land right before it went into default, that sounds like a believable rumor..maybe we see him jump in as part of the new team of investors.
I am still concerned about more cost increases though. If it was 70M over budget a few months ago, it could be more by now. There was an article a little while ago about him locking in some prices, but I'm not sure if that is still the case.
EDIT: MORE INFO -
This latest Bee article sounds like CalPERS will only get the 25M back I mentioned above. Not a done deal yet though.
"Saca has until May 25 to come up with about $25 million needed to reimburse CalPERS for the money it had spent on the project before construction stalled earlier this year."
Saca buys out CalPERS stake in Towers project
Sacramento Business Journal - 2:59 PM PDT Monday, April 16, 2007
by Michael Shaw
Developer John Saca has bought out California Public Employees' Retirement System's interest in the Towers on Capitol Mall skyscraper project, allowing him to retain ownership and search for other partners, Saca said Monday.
Terms were not disclosed.
The move may allow the project to move forward if additional financing can be found to cover increased construction costs and to replace CalPERS' $100 million contribution. Although CalPERS did not disclose its financial involvement to date, sources familiar with the project had previously said it had contributed $25 million before work stopped in January.
The two sides butted heads on how to proceed under overruns estimated at least $70 million. Saca said they had reached an "amicable settlement."
The split comes a year after the pension giant announced its intention to invest in the condo towers, with officials calling it "a good investment." Saca called the partnership "a perfect match" at the time.
The relationship soured, though, after it became apparent that the original budget of $500 million wouldn't be enough to build The Towers. Personnel changes at CalPERS may also have played a role -- a strong backer of the project, Mike McCook, left the role of senior real estate investment adviser.
The foundation has yet to be poured and The Towers already owes about $35 million in loans to contractors for work already done. Unpaid contractors have filed liens and lawsuits against the project.
Real estate investor Joe Mohamed purchased the $22 million loan from First Bank that the Towers partnership used to purchase the land on Capitol Mall.
Saca said Monday he is working with Mohamed to pay off the loan or extend it.
Saca said he hoped to be able to pay remaining debts within a few weeks.
"We are working hard to bring in another partner and hope to have a new deal announced within a week or so," Saca said in a news release.
Saca said more than 250 condo buyers have signed agreements that extend deadlines for completion of the project.
"CalPERS has been fair and reasonable coming to this settlement," Saca said. "Neither party foresaw the significant changes in circumstances that have affected this project."
"Over the last several months, I have been inspired and humbled by the hundreds of supportive phone calls and e-mails from citizens all over the Sacramento area," Saca wrote. "They believe in this project; our buyers believe in this project."
The Towers consists of two 53-story towers with 800 condo units and a 230-room InterContinental Hotel.