Funds for the La Valentina Project

Next Tuesday the City Council will defund $1 million towards the La Valentina project in State Housing Trust Funds and then allocate $1 million in City Housing Trust Fund funds as a loan to the 12th Street Partners, L.P. (Developer) for construction and permanent financing of the project. 12th Street Partners, L.P. will also be receiving loans from Redevelopment Agency of the City of Sacramento and the City Council in the amounts of $7,035,000 to assist in funding the costs of construction and permanent financing of the project. The total cost to build the proposal is estimated at $30 million.

The proposed La Valentina project will consist of a mixed-use, transit-oriented development. Located on two adjacent sites separated by D Street along the east side of the 12th Street corridor adjacent to the Alkali Flat/La Valentina Light Rail Station.The proposal will include a 1,300 square foot cafe, 5,000 square feet of commercial/retail space, a 2,000 square foot community room, a property management office, a play area for resident children, and parking on the ground floor. There will be 63 affordable rental units located on the second, third, and fourth floors. Over the past 18 years, the City of Sacramento and three different development teams have unsuccessfully attempted to revitalize the La Valentina site. Construction should begin in this year.

Good & Bad

Let’s start with the good. CIM Group Inc. in partner with David Taylor plan to submit a development proposal for the empty 700 - 800 blocks of K Street which are city-owned, according to Taylor Interests and the city. With Sacramento CIM investments in the hundreds of millions of dollars, they could also be the only company with any desire to buy Westfield’s Downtown Plaza and transforming it into a more urban-orientated shopping center. Currently CIM’s Sacramento investments include 800 J Street, the 26-story “Park Plaza” office building across from Cesar Chavez Park, a partnerships in Sheraton Grand Hotel, Cosmopolitan Theater, and new nightclubs and restaurants on K Street. Currently both CIM and Taylor have partnered up with Gerry Kamilos in an arena proposal for the Railyards which seems to have strong interest by both the NBA and the City. CIM has also been chosen to lead development for the former “Towers” site on Capitol Mall and has committed $165 million to the project but is currently waiting for market conditions to improve before moving forward.

The bad news is the Hard Rock Café in Downtown Plaza that opened in 1997 is going to close at the end of March when its lease expires. It’s being reported that this is happening as a cost cutting measure but it was just last week a new Hard Rock Cafe opened up in Seattle.

As much as I am not a fan of how the 800 J Street building looks from the street, it has become a great success with its ground floor retail occupied and nearly all the apartment units above rented out. If you look at CIM history of “urban renaissance” development, it looks as though they have both the experience and deep pockets that Sacramento needs to develop downtowns retail and housing.

Sutter Medical Center – Update

Later this month the next milestone in the expansion of the Sutter Medical Center in midtown will be the switchover from the existing Energy Center off of 29th Street to the new Energy Center in the basement of Sutter Capitol Pavilion on 28th Street. Demolition of the existing Energy Center is slated to begin later this month with steel expected to rise up for the Anderson Lucchetti Center site later this year.