Friday, June 15, 2007

Saca Round 2 - The Metropolitan

I guess he must have gotten out The Towers with his skin still attached. That was quicker than expected, The Metropolitan goes before Design Review and Planning Commission this month for comment and review.

I think it was a couple years ago, Saca and his father bought the corner of 10th and J and proposed The Metropolitan. This one would obviously cost much less to build, and I imagine units would cost less as well. Since my guess is him and this father will be building it, there might not need to be any need for a equity partner since I'm sure the family is very well off and could front the equity required. Given the last relationship with CalPERS, that might be the only way right now.

I really admire his balls and tenacity. He's going to be catching so much shit from the media and people who wanted him to fail in The Towers so badly. He will never live it down until he can get one completed, even then probably not.

I'm sure he learned quite a bit (though some would say he DIDN'T learn) in his his failed attempt at The Towers, so hopefully he can use that to his advantage here. I'm sure there are some people who put deposits down at The Towers that would not buy here, but I think he still has some loyal buyers among that group. Since there are much fewer units (esp if they do the hotel option), it could be easier to sell the required amount.

That block of J Street is one ugliest in downtown as well. With 800j opening and the retail going in soon, JDV on the way, the new lounge, and a couple eateries like Sukura and Kabul Kabob already in the area, the project would add a lot of synergy to the area.

While this building is much smaller than The Towers, its still a large project. If he is really going to move forward on this, he needs to find a way to make it happen, even if it means downsizing the project if necessary. The record for number of holes in DT is not a record I'm sure he wants to have.
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Saca eyes new heights after selling Towers stake
City committee to look at 39-story condominium project next week
Sacramento Business Journal - June 15, 2007
by Michael Shaw

Developer John Saca says he's still in the high-rise business.

While a little bruised from the unsuccessful effort to save The Towers on Capitol Mall, Saca is forging ahead with another downtown Sacramento project -- a 39-story condo tower at 10th and J streets.

The Metropolitan, which if built at its projected 420 feet, would be taller than any building in the capital today, is on the agenda of the city of Sacramento's Design Commission for Wednesday.

This week, Saca sold his interest in The Towers to his equity partner, the California Public Employees' Retirement System, ending what became a futile attempt to save the project by landing more financing and buying out CalPERS.

The pension fund and its development partner, CIM Group Inc., haven't decided what they will build on the property, but it won't be the twin 53-story luxury condominium towers that Saca started building before cost overruns halted construction in January.

"(CIM) has been very clear to us they're interested in a spectacular project that's mixed-use," assistant city manager John Dangberg said.

In an interview this week, Saca sounded a little disheartened about the fate of his pet project, but said he expects to find success the second time around. He blamed the plunging real estate market for The Towers' failure, deflecting claims that he overreached or lacked enough experience. The Towers was Saca's first foray into high-rise construction and would have dominated the capital's skyline.

"Lenders started tightening up. It became evident that this was really the only solution," he said of selling his interest in The Towers project to CalPERS. "We couldn't find another partner."

He noted that buyers put down deposits on almost 400 condos at The Towers, with a value of more than $270 million, showing a strong interest in the concept. The deposits are being refunded.

While The Towers struggled, Saca didn't abandon plans for The Metropolitan.

"He's moving forward quite aggressively with that project," Dangberg said. He said the experience with The Towers hasn't diminished Saca's standing in the city's eyes.

The 320-condo project is smaller in scale and far less expensive than the $500 million-plus for The Towers.

Bruce Slaton, a real estate agent who specializes in Sacramento's condo market, said it makes sense for Saca to explore another high-rise, because there seems to be a demand for downtown luxury living. But with no benchmark high-rise for comparison, all the support and demand are meaningless if the projects aren't financially viable, Slaton said.

With The Towers dead, and with it Saca's proposal for an InterContinental Hotel supported by an $11 million city subsidy, Saca said he's exploring the idea of putting a hotel in The Metropolitan. He has not approached the city for a subsidy and hasn't shared his funding sources for the building other than to tell city officials he has the resources lined up to build it, assistant city manager Mary Hanneman said.

Saca declined to say how much he was paid to depart as the managing partner in The Towers partnership.

"I'll be OK," Saca said of the impact from his personal stake in the project, both financially and in reputation. "Obviously, I lost thousands of hours of time and a lot of money."

6 comments:

Zwahlen Images said...

Maybe even downsize the Metropolitan? LivingInUrbanSac, your breaking my heart.

LivingInUrbanSac said...

If it means getting built, yes.

Uneasy Rhetoric said...

Yep. If downsize = built, absolutely. I seem to recall the Metro. was supposed to be significantly less expensive, so that might expand his market a tad.

LivingInUrbanSac said...

Yeah, from what I remember there would be much fewer ammeniteis so price was going to be lower.

It would still be $$$, but like you said, maybe it will expand the market a bit.

cole said...

images i saw of metropolitan looked amazingly coherent and rational...unlike the flim flam of his previous project or that of Danny Boy Libeskind...

mogavero designed something on the River which would make a lot of sense for a great many people if a coherent pattern could be established along the River(s) with all the amenities one would expect...

LivingInUrbanSac said...

In general, I'm not a big fan of the 'starciects' type stuff, though Aura has grown on me a bit...other than that damn parking garage.

On the oher hand, I really liked The Towers. What about it didn't work for you?