Friday, August 31, 2007

City pulls back 10M Loan for Aura

As much as I want to see Aura built, its good the city isn't letting that money stay out there any longer. That money being tied up here means less elsewhere. There are only so many time you can hear the same "Soon" "Close" 2 Weeks" rhetoric from Nassi that we have heard for the past two years..

If he can come back with FINALIZED loans, not "close" "soon" "within 45 days" then I would like to listen again to requests for loans, but until then..don't waste anymore time on it.


City kills condo loan offer
Developer says downtown Aura high-rise isn't dead.
By Jon Ortiz - Bee Staff Writer

Sacramento city leaders have pulled back their offer to loan $10 million to fund construction of a downtown condominium high-rise.

Craig Nassi, the Denver-based developer behind the 39-story Aura tower proposed for 601 Capitol Mall, lost the city's commitment after he failed to secure all of his private financing by the end of last month.

Despite the setback, Nassi is now talking up a second downtown condo project that will include a 400-room hotel.

Nassi insists that Aura is alive. But besides having the city withdraw its money, he hasn't yet bought the land for it from local developer David Taylor. Taylor owns the 600 block on the north side of Capitol Mall and is building the U.S. Bank Tower on the eastern half.

Sacramento Assistant City Manager John Dangberg said the city still supports Aura, but that it "has no further commitments at this time" to the project.

"We understand that it's a very challenged market right now," Dangberg said. "We'll support (Nassi) however we can. We're more than willing to reconsider financial participation in the project when he has the balance of financing in place."

In June, Nassi said that he would have his lenders lined up within 45 days. This week, he said financing was on the horizon for the $177 million project.

"We hope to have the loan ready to fund soon," Nassi said in an e-mail. He blamed the delay on "capital markets (that) have been paralyzed by the subprime fallout and the unknown of secondary market pricing."

He did not say whether the withdrawal of the city's money would affect his ability to complete financing.

Like Aura, Nassi's second tower, called Epic, is designed by renowned architect Daniel Libeskind. Its Web site details plans for 354 luxury condo units in a sweeping 50-story, mixed-use tower that would take up half a city block at 12th and I streets.

Nassi said that he is "close to finalizing a deal" with InterContinental Hotels Inc. to anchor Epic.

But he apparently is competing with local developer John Saca for the same hotel chain. Local business officials say Saca also has wooed InterContinental.

The dual hotel talks are the latest saga in a rivalry that began more than two years ago when Nassi proposed Aura three blocks from a project Saca wanted to build on Capitol Mall between Third and Fourth streets. That plan -- the Towers -- called for twin 53-story buildings featuring about 800 condominiums, an InterContinental hotel and high-end retail stores.

Each developer went all out for prospective buyers with dueling showrooms, sales parties and publicity stunts. In the end, Saca's project busted its budget and collapsed earlier this year.

Since then, Saca has proposed building the Metropolitan, a 39- story structure at 10th and J streets with up to 330 condos and a hotel.

Saca didn't return calls seeking comment about hotel discussions for the Metropolitan. But Michael Ault, executive director of the Downtown Sacramento Partnership, said "we've heard that InterContinental has been talking to both of them (Saca and Nassi)."

Steve Hammond, president and CEO of the city's Convention & Visitors Bureau, also said that Saca and InterContinental have talked and that Sacramento continues to field attention from several hotel chains.

InterContinental would not comment on any talks with developers. But John Lee, the company's Western region vice president, said the hotel chain wants to fly its flag here.

"Sacramento is a target market for us," he said. "We'd love to be in the city."

Dangberg, the assistant Sacramento city manager, said the city is "excited" at InterContinental's apparent interest, but that it hasn't earmarked money for Epic or the Metropolitan.

"We're supportive, but we've made no commitment of any kind to either," Dangberg said.

Rivalries aside, Sacramento could use more hotel rooms, said visitors bureau chief Hammond, despite adding 235 suites with the new Marriott Residence Inn at 15th and L streets. Another 200 rooms will come online when Joie de Vivre Hospitality opens the boutique Citizen Hotel at 926 J St.

"We gear our sales and marketing efforts towards groups that are the size that will fit in Sacramento," Hammond said. "So as our hotel inventory grows, we adjust our client base to fit the room inventory that we have available."

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