Friday, January 25, 2019

Kaiser Buys Railyard Property

Proposed Kaiser Hospital Tower in the Railyards
Nearly 2 ½ years after Kaiser submitted plans to the Planning and Design Commission to build a hospital in the railyards, Kaiser has announced the purchase of 18 acres for $33 million. Entitlements began in 2015, hopefully construction will begin soon now that the land has been obtained. The first phase of the will cost $749.5 million. Plans call for the 14-story hospital to include 420 beds as well as a large medical office. No date has been set for when construction will begin. Below is a map showing the current building height map, it appears most of the land is unrestricted.
Railyards building height map

Wednesday, January 16, 2019

Budget Blown For Streetcar Project

Proposed Streetcars running along Capitol Mall

This is a dream the city has been working on for two decades, but the dollar amount the city had anticipated to build street cars in Sacramento were far from reality after the bids came in. The SacBee has reported that the lowest bid was $184 million by Teichert Construction, which was $76 million more than the city budgeted for. City leaders appeared to be shocked by the setback. Sacramento City Councilman Steve Hansen said “a dramatic setback for the project” and “The team has to step back and rethink this. As it’s currently conceived, the project cannot go forward”. Two other bids came in at $190 million and $206 million.
The West Sacramento Mayor Christopher Cabaldon said “It is premature to characterize this as the death of the project,” he said, “but this is the most significant challenge we have faced from day one.” The SacBee also reports that Congress several years ago committed to fund up to half of the project, but the Federal Transit Administration has not yet agreed to sign a grant agreement, noting last year that Sacramento had not taken necessary steps, such as finalizing construction contracts. Local leaders had hoped that signing a construction contract would put them in position to finally obtain federal matching funds for the project.

Every year this project does not start construction the cost to build rises. The line would operate on rails in streets for 4.4 miles between West Sacramento and downtown Sacramento, crossing the Tower Bridge. At this moment, it will cost $41,818,181 million per mile.

Wanna hear something funny? Three years ago, after receiving $30 million in State funding for the project Steve Hansen said
“After 20 years of working on this, that’s the final piece of money we need to go build it”.

Tuesday, January 08, 2019

Colliers Sacramento Office Snapshot: Q4 2018

Colliers International has reviewed the numbers and last years Sacramento office market ended on a positive note. Net absorption is at its highest level since 2005 with seven straight positive quarters, and vacancy at its lowest level in 16.5 years. Downtown also absorbed 100,000sf during the fourth quarter and more than 329,000sf throughout 2018. Asking rates Per Square Footage have also risen at an average of 4.4% year over year. If new construction is going to occur downtown, the asking rate will have to rise to at least $3.10 PSF (according to Sacramento Business Journal 2015 article) or the cost to build won’t pencil out.

So with all this good news, will the need for more office space downtown and rising rates be enough so that the proposed 301 Tower on Capitol Mall can pre-lease 50% of the tower so that construction can begin? That’s approximately 368,500 SF of the 737,000 SF proposed tower. Anything is possible; I hope they have some leads for those who are interested.

Thursday, January 03, 2019

Convention Center Complex - C3 Project

Memorial Auditorium 2018 renovation to cost $18 million

The first phase of the project began in early June 2018 with the renovation of the Memorial Auditorium at a cost of $16 million adding seating, acoustic enhancements and other audio/visual upgrades. Renovations will enhance the patron’s experience and allow the Auditorium to host all scheduled performing arts events during the renovation of the Sacramento Community Center Theater, which begins Summer 2019.
Convention Center expansion to cost $196 million

The demolition of the Convention Center Administration Offices (Panatoni Building) at the corner of 15th and K Streets will began December 2018. This is a $196 million renovation/expansion of the Convention Center adding meeting rooms, exhibit halls and more lobby and kitchen space.
Community Center Theater renovation to cost $85 million

The Community Center Theater and the Convention Center will close for construction in Summer 2019 and re-open in Fall 2020. During this time, all shows scheduled at the Community Center Theater will be relocated to the Memorial Auditorium, which will have completed its renovation. Meanwhile, conventions and conferences temporarily will be hosted in various venues throughout the city, but downtown hotels will continue to host overnight visitors. At an estimated cost of $85 million, the renovation of the Community Center Theater will enhance the theater’s aesthetic appeal, improve its lobby and make the venue more accessible to disabled patrons.

Follow the construction time line here:

How this is being funded:

The Sacramento City Council on Sept. 25, 2018 unanimously approved the issuance of up to $350 million in bonds to finance the renovation/expansion of the C3 Project, which includes the Convention Center, the Memorial Auditorium and the Community Center Theater. The bonds will not be repaid from the City’s general fund. Instead, they will be repaid by what’s known as the “transient occupancy tax,” or TOT. This is a 12 percent tax on hotel-room and short-term rental stays used for tourism-related projects.* In addition, local hotels have agreed to pay for the construction of the Convention Centers’ new ballroom, which will cost approximately $45-50 million.