I was really rooting for Saca to pull a rabbit out his hat on this, but that will no longer be the case. I admire his entrepreneurial guts to try something like that, and really was pretty close to pulling it off.
The housing market, the change at CalPERS, construction costs, and inexperience was too much to overcome for this project. I just hope he got a decent deal from CalPERS on his way out.
I've always said make the first floor the best floor, but I really would have loved to see those buildings in the skyline.
CIM and CalPERS have been working together for a while now, so I assume this partnership will be a little smoother. Looks like the time frame is around 18 months to put something new together for the site.
We all know the new plan will not be nearly as grandiose as what Saca planned. An article a short time ago mentioned how office space would be in the mix, but I hope that housing the hotel and quality retail space will be in the plans as well.
CalPERS and CIM will build for max profit, and not the so much the impact, but with the site at the foot of Capitol Mall and The Tower Bridge, let's hope they come up with something good.
CalPERS buys Saca out of Towers
Sacramento Business Journal - 10:45 AM PDT Tuesday, June 12, 2007
by Michael Shaw
The California Public Employees' Retirement System has acquired the Towers on Capitol Mall project, the pension fund announced Tuesday. It has reached an agreement with its former partner, developer John Saca, to buy his interest in the project.
Saca notified the pension fund that he did not intend to exercise an option to purchase CalPERS interest in the stalled Towers project.
Just what will be built at the site isn't clear.
CalPERS is partnering with its national development partner, CIM Group of Los Angeles, to develop the site and a plan will be developed over the next 18 months.
CIM will first work to resolve outstanding debt, CalPERS spokesman Brad Pacheco said.
Press Release from CalPERS
CalPERS TO ACQUIRE TOWERS PROJECT
SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) today announced it has reached agreement with local developer John Saca to acquire his interest in the Towers on Capitol Mall, LLC (Towers LLC). This action follows Saca’s notification that he will not exercise his option to acquire CalPERS interest in Towers LLC. “After careful analysis, we decided that our beneficiaries’ best interest is served by acquiring the site and designating our national development partner CIM Group of Los Angeles to serve as lead developer,” said Ted Eliopoulos, CalPERS Senior Investment Officer for Real Estate. “This is a particularly well-located site that can be transformed into a successful development. We are pleased that our long standing partner, CIM Group has agreed to lead our future effort.”
“As the first order of business, CIM will resolve issues with outstanding creditors and complete the first phase of site preparation and then, over the next 18 months, focus on creating a viable development program for this important site.”
“I want to take this opportunity to recognize John Saca’s great entrepreneurial spirit and complete dedication to this project on behalf of CalPERS. While the project experienced unfavorable economic and market conditions, John was a committed partner who explored every avenue to get this project built,” Eliopoulos added.
CIM is one of CalPERS largest urban investment partners, with a long and successful track record nationally in delivering quality real estate projects. Under the new arrangement, CalPERS will continue to be a passive investor in the project. CIM will serve as lead developer and managing member. “Through his vision, Mr. Saca brought focus to the terrific potential of this important site,” said John Given, a Principal at CIM. “We believe that, by taking a step back and working closely with the City and all stakeholders involved, we can develop a program that will serve all of those in the community who want to see this site achieve its potential.” CalPERS has notified the city of Sacramento of its plans and received a favorable response. “ We are grateful to John Saca for his wonderful vision for this site, for his tenacity to try to make this project a reality against a changing economic climate. At all times, he had the interests of the city and its citizens at heart,” said Ray Kerridge City Manager.
“We are also lucky to have an institution such as CalPERS in our community,” Kerridge added. “We appreciate the leadership that CalPERS has demonstrated. Given its strategic location, this site can become another crown jewel for the development of downtown Sacramento. Rather than walking away from the project and the commitments made by Towers on Capitol Mall, LLC, CalPERS took decisive action in taking control of the site and involving CIM, a development group that we at the City have worked with successfully in the past.”