If it's "nationally known company that already has a presence in the Sacramento area.", my guess would be KB Homes through their relatively new KB Urban division which focuses on high density mid/high rise projects.
The county really wants to get rid of that building as soon as possible. I think I remember reading the mortgage on the property is 40K a month for the unused building.
No surprise the plan might call for a little more office than the last plan by DR Horton.
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Bob Shallit: Pinch hitter on deck for 21-story loft project
By Bob Shallit - Bee Columnist
A "nationally known" developer soon could be stepping in to build a 21-story housing and office complex at a downtown site abandoned by Texas home builder D.R. Horton.
Sacramento County Supervisor Roger Dickinson confirms reports that talks are under way with another developer for the county-owned site at Eighth and I streets.
"Things are going quite well," he says of negotiations. "The hope is that within 30 days we can go back to the board and say we have an agreement, that we're back on track."
The project -- called Library Lofts -- got off track in September when Horton backed out of an agreement to buy the vacant building and replace it with a high-rise.
The new developer is looking to build "essentially the same project as Horton," Dickinson says.
The original plans called for about 300 condos, ground-floor retail and 40,000 square feet of office space, some of which would be occupied by county departments. The new plans call for "a little more office, a little less residential," says Dickinson.
The supervisor isn't revealing the identity of the new developer, but says it's a "nationally known company that already has a presence in the Sacramento area."
I'm not too surprised by this. Sacramento got a late start (because no one believed in it - an attitude I hope is gone forever)and thus its urban core is different from any other market in the region in that there is still demand for high-density, urban living that has not been addressed here as it has in markets that are slumping or stagnating - i.e. San Diego, Miami, Las Vegas etc. There are still plenty of qualified buyers willing to pay for this lifestyle to fill, say, 5k units. The Towers and Aura together have fewer than 400 units left and there are maybe another 1500 units available or soon will be throughout the downtown/midtown area. That means we still have a potential 2000+ units that should be viable in downtown/midtown - even in the current slump.
ReplyDeleteDR Horton was in full panic mode last Summer and they way over reacted by cutting thousands of jobs and dropping some great projects, including this one.
Being a giant public company - they had to answer to Wall Street first and show they were doing something - anything - to protect their stockholder's investment. They ended up cutting not just the fat, but a lot of bone and meat too.
Private companies being more nimble - I would look for a CIM or even a Laing Urban to pick this one up.
Also, when the large publics see how well the market did here during this housing down-cycle, they will vigorously return to Sacramento as the market improves. We should see another spectacular residential influx - surpassing the current one - in two or so years. Instead of 3-4k units being built, look for 6-10k (not including the railyards) on the boards starting by 2009. Not all will get built of course, but many will and downtown Sacramento will be as vibrant as any in the country. That oughta really tick-off all of the bedwetting readers at the Sacramento Bee!
Regarding Horton, I figured it had much with having to answer to Wall Street.
ReplyDeleteBy my count, not including the small 4 or 5 unit projects out there, there are 1,346 under construction (Rental and for sale), 801 approved, and about 3000 in the planning process. (Not including rail yards).
I still think there will be big a market for a lot of people to buy or rent, but I think it will depend on what type of units they are. I’m not sure how many more luxury high-rises the market could take in the short term (though I think Aura and The Towers will be fine once they get fully u/c), I do know there is a huge untapped market for more reasonably priced housing.
Of course, that market will remain untapped until two obstacles can be overcome: economic and psychological. First, a way has to be developed to build housing that is good-quality but less expensive--with current land, materials and labor prices, developers couldn't build affordable houses if they wanted to.
ReplyDeleteSecond, of course, the bugaboos about "affordable housing" have to be pierced: mention reasonably priced housing and they immediately think Cabrini Green.
The site in question is, I think, really good for a mid-income project (ideally a mixed-income, but with more than 15% "affordable") due to its proximity to transit, work, restaurants and recreation, although that neighborhood is still going to need a supermarket at some point! I must admit I have feelings about it because my office is right near that site, in an old building that many might call "blighted" if they don't share my love of old buildings.
I hope the possible new developer does not change the previous design to much. Did I read that right? The new guy would just take over where JD Horton left off? The new guy would have to buy the design off of Horton would they?
ReplyDeleteI'm pretty sure if they wanted the design from Horton they would have to buy it from them.
ReplyDeleteI think what they are going to do is something along the same lines as what Horton was going to do, but not exactly the same, including design.
Hopefully they can keep the price range as well. Horton was planning the units to much less than Aura or The Towers. I think from what I remember the larger units were running in the low 400 per square feet, versus 500-700 for the others. So they were definitely not luxury units.
i heard from a local homebuilder that DR Horton had been shopping the project out to other builders several weeks before they declared it cancelled. I figured noone was wanted to build what they had planned - but if the design is at all worth building, the new developer is going to save a lot of time and money picking up where DR Horton left off. I wouldn't think they'd be making huge changes to the design for just that reason.
ReplyDeleteAs I recall, the architect for the DR Horton plan was David Mogavero, right? He definitely has the local cred for this project, and the right ideas when it comes to sustainable building. He also has experience with building affordable housing, as well as green building practices.
ReplyDeleteYeah, Mogavero was the architect. Not sure if he going to be part of this proposal though. I would imagine since he knows the site well, he would get a look.
ReplyDeleteHmmmm... I've never had a project sold out from under me so I'm not sure of the process. I have had some dropped, but they weren't picked-up by anyone until much later. In those cases, the firms that picked up the projects owed us nothing. If Horton shopped the project around and their were no takers, perhaps that's why. Why pay Horton for a project when you can get it for "free" much later. I guess the question is "who owns the plans?" The developer or the consultant? I know when we use the same basic design from the same architect for several projects (common for condos by big public builders), we have to pay the architects a "reuse" fee. That indicates to me that ownership rests with the architect. I would be inclined to say that the architect can shop the plans to anyone it pleases and Horton gets nothing.
ReplyDeleteAs far as keeping the consultant team in place. I can't imagine wanting to change any it at this point unless you had discovered someone in due-diligence who was really incompetent or had a thousand change orders. Starting over at this point would be enormously expensive and time consuming. Unless the original design destroys your budget - and that's unlikely given the buyer profile - the original team should remain intact.
"I guess the question is "who owns the plans?"
ReplyDeleteI guess I always thought the developer is the owner of plans on unique projects like a highrise, I guess that's not always the case.
Great info William...
What I said earlier comes from a vice-president of a prominent national homebuilder who was approached by DR Horton. So I do know at least that much is true. problem is, I don't know much else.
ReplyDeleteI would think that such a site-specific plan as the library lofts are, the developer would have bought the rights to the design for themselves. If there were hangin onto a design that would otherwise be a total loss if they dropped the project, I would understand why the project would be picked back up so quickly. This was only a matter of a few months.
but i'm just speculating about an industry which i don't really know much about. :)