Thursday, October 15, 2009

Midtown development back to square one

Published Thursday, Oct. 15, 2009
Sacramento Bee - Bob Shallit

Another planned midtown condo and rental project has hit a now-familiar snag: no financing.

Last summer, a partnership headed by Sacramento architect/developer David Mogavero was selected by the Capitol Area Development Authority to build a complex at 16th and P streets. The project's innovative features included a dorm-like rental annex and a hydraulic-stack parking system.

But the partnership "came up against a brick wall" in terms of getting capital, Mogavero says.

Now, CADA's board is asking Mogavero's group and two other developers who were project finalists to revise their proposals and try to find financing.

"We're saying, 'Let's start over and let all three get a shot at it,' " says Tom Kigar, CADA's development director.

The three including D&S Development and SKK Developments have until Dec. 20 to submit new plans and get commitments from lenders.

Kigar says CADA's preference is still to have a for-sale housing component in the project. But he says the group's board is being flexible.

"If somebody comes up with rentals that would be converted to ownership later, that would be acceptable," he says.

Bay Miry, a representative for D&S, says flexibility could help. But it may not be enough, given the dismal financing climate.

"Every bank we talk to says they haven't made a construction loan in a year and a half," he says.

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