The Railyards

Despite the start of foreclosure proceedings with the Railyards a couple weeks ago, infrastructure and construction progress moves forward with all the earth work finished for the three 5th and 6th Streets bridges. It’s now time for pile driving and bridge construction with approximately 220 pipe piles for three bridges, each 103 feet long and 4.3 tons in weight. Pile sections welding is in progress at this time and footings have been excavated.

Last May five construction bids to move the railyard tracks to the north came in higher than the city was budgeted for, so as of today the city is still deciding how to bridge the funding gap to proceed forward. Design work on additional infrastructure projects, including major roads and a concrete viaduct along 5th Streets east of the Central Shops, will also go out to bid soon.

Follow The Railyards redevelopment effort in pictures by visiting http://www.sacramentorailyards.com/ and clicking on VIEW LATEST IMAGES.

Arena Land Swap Under Study

As reported by the Sacramento Business Journal, Cal Expo leaders agreed Friday to study whether the three-way land swap proposal for an arena would work for the state fairgrounds financially and physically.

The Cal Expo Board of Directors accept the so-called evaluation agreement with Sacramento Convergence LLC, a group led by Sacramento developers Gerry Kamilos and David Taylor. The board also agreed on a timeline for Convergence to pay Cal Expo about $120,000 for the consultants who will study the plan for Cal Expo, said Brian May, Cal Expo assistant general manager.

In the agreement is to study and evaluate” the proposal to determine whether it “will provide the state with the highest and most certain return for the sale of its property and is in Cal Expo’s best interest, provided that the study and evaluation are at no cost to Cal Expo.”

The Kamilos plan would sell the Cal Expo site to Convergence, transfer the city of Sacramento’s North Natomas property to the state for the future location of the state fair, and develop a sports and entertainment complex on city-owned land at the intermodal site next to the downtown railyard.

The Sacramento City Council entered into exclusive negotiations with the developers in late April, agreeing to a four-month exclusive negotiating period.

The developers envision that the new home of the Sacramento Kings would open in June 2014.

Rubicon’s Financial Strategy for AuthentiCity

Below's a funding outline for the proposed AuthentiCity and Boqueria California Plan.

By summarizing Rubicon’s project into two financial columns (equity & public funding) the city staff oversimplified Rubicon’s funding strategy. This led the city staff unfortunately to inaccurately represent what Rubicon’s ‘Financial Ask’ of the City is. Rubicon is not asking for $100 M in City funding. In fact, Rubicon’s 700 Block-Only proposal uses half the City Funding that the city staff’s committee recommendation uses to achieve the Same Size project in the Same Time frame.

Rubicon knows the City has but $80M remaining for redevelopment on K Street: $40M of land value (the purchase price of the 700/800 land), $20M of available funds, and $20M of MOPA Funds (ear-marked for David Taylor). Rubicon’s approach is to conservatively leverage this $60M City Investment to create as many jobs, residential units, unique trips, sales tax and real estate tax dollars as possible.

This is not so different than when someone has $20,000 and wants to buy a house. She can buy a smaller house that will cost her $20,000 or the house that is a better fit for $80,000. In order to buy the larger house she leverages (adds additional resources) to the $20,000 to accumulate the $80,000 necessary to buy the larger house. In other words she leverages her available funds to get more.

Rubicon proposes safely leveraging the City’s resources so the City gets more without putting the City at financial risk by using methods the City itself is exploring on other projects and in other parts of town.

If one looks closer at Rubicon’s financing there are basically three categories of funding: Existing Public Funds, New Project Funds, and the Reinvestment of Project Generated Funds.

-The Existing Public Funds consist of the City’s available funds (described above).

-The New Project Funds consists of Rubicon’s Equity and Debt (Rubicon is investing more equity than the staff committee’s recommended project) and not City but Private, State, Federal and Parking funds. The Boqueria California is a perfect example of this. By partnering the City’s land with the State’s Food and Agriculture Industry its possible to create a Civic Amenity that draws potential visitors from through out the region, bringing tax dollars into the downtown without cannibalizing from other parts of Sacramento such as Midtown or the R St Corridor. Another way of saying this is Rubicon is leveraging the Land to attract an investment from the $40Billion/yr Food & Agriculture Industry and create something that otherwise could not be possible.

-Reinvestment of Project Generated Funds consists of funds created by the project that would not exist without the project. These are reinvested into the project.

Because its difficult to summarize Rubicon’s entire proposal into a few paragraphs, let’s compare Rubicon’s 700 Block-Only proposal side by side with the staff committee’s recommendation on all three blocks.

With Rubicon’s proposal Sacramento gets the Same Size project, in the Same Time frame, at Half The Cost and still reserves the opportunity to do something special on the 800 Blocks and still has the $20M of MOPA funds for future reinvestment. (click here for detailed comparison and background data)

SACRAMENTO GETS MORE w/ LESS IN RUBICON’S PROPOSAL.

Please email the City Council in support of this proposal.

Boqueria Open Forum Scheduled

Please join hosts Michael Tuohy, Executive Chef of Grange, and Dan Best of Certified Farmers’ Markets in an open forum to learn more about and the Boqueria California plans for the JKL corridor.

The event is open to the public and will be held on Monday June 28, 2010 from 5:30 – 8:30 pm The Citizen Hotel 7th floor Terrace, 926 J Street in Sacramento.

Great Cities Have Great Places. Help make Boqueria California Sacramento’s Great Place.

http://boqueriaca.com/

http://boqueriaca.com/?page_id=88

The AuthentiCity and Boqueria California Plan

D&S and Taylor Recommended for K Street

The Sacramento Business Journal’s reporting that a city-appointed selection committee has recommended both D&S Development and David S. Taylor Interests Inc., to develop vacant parcels on the 700 and 800 blocks of the pedestrian-oriented street. The final decision of who wins will be made by the Sacramento City Council, which is expected to address the matter in July. The other teams have proposed larger projects on the two blocks.

From what I have learned in looking over the committee’s own numbers, if they were to choose D&S and Taylor for the site, their proposals would require the largest city subsidies to deliver the smallest number residential units. It also looks to me as if David Taylor’s getting favoritism again. Yeah, he's got a proven track record, but so do the Rubicon Partners, developer of The Citizen hotel. The numbers don’t lie Council members, Rubicon can offer more bang for the buck and I suggest you take a second look at everything they can bring to K Street.

New Courthouse Funding Approved

The state Public Works Board approved $439.1 million for the new courthouse which is a lower cost for the project than expected to allow the expanding of courtrooms from 35 to 44 and more space for holding cells. The new 405,000-square-foot courthouse is funded by Senate Bill 1407, which provided $5 billion in funding for “critically needed new and renovated court facilities” that use court-user fees rather than the state general fund. Both Nacht & Lewis and HOK have been hired to design the courthouse and The Administrative Office of the Courts expects to choose a site and complete the deal for the property in 2011, and begin construction in 2013. The new courthouse should open in 2015.

Railyard Foreclosure Proceedings Begin

The Sac Bee’s reporting that Inland American Real Estate Trust has filed a notice of default against Thomas Enterprises because they have failed to pay off $187 million worth of loans. A Thomas representatives saying that this is "just a formality" which sounds almost identical to what John Saca said a few months before he had to release the former Towers site over to CalPERS in a buyout to avoid foreclosure. Earlier this year, Thomas Enterprises struggled to pay over $200,000 in property taxes to the city and that red flag should have been a sign that they were struggling to move forward with the project. I have a feeling that we will be looking at 240 empty acres for a vary long time.

Bridges needed to cross the Sacramento River

It seem like every 3 or 4 years the City of Sacramento will discuss the possibility of building some bridges to link both West Sacramento and Sacramento… and then any ideas that are mentioned seem to be forgotten until another new study is needed to look into it again. This year both the cities of Sacramento and West Sacramento are investigating on whether one or more new bridges are needed so as to better connect the two communities, and are looking to hear from the public on the matter.

Today a non-scientific survey was launched as part of the Sacramento River Crossing Study with a nine-question survey asking where the best location would be to build them. The study will be open for responses till June 24th with the intent to evaluate a number of alternatives from a “no build” option to multiple crossings and locations. A final report is set to go to the city councils by the end of the year. The online survey is available here.

I still don’t understand why the city keeps spending money on study after study but still can’t identify where funding would come from to build just one of these bridges? This is the same story I’ve heard for over 20 years where numerous studies on decking I-5 have been done, but the end result is always that the cost to deck I-5 is substantially more that the previous study, therefore it cost too much to build at this time. I’m certain that these numerous studies have cost the city lots of money and showing virtually nothing new from the previous studies done before. This time, how about including several ideas on where the money to build new bridges would come from, there is no need to waist everyone’s time and money again if there is no funding plan in place to make this plan reality.

K Street Nightclub and Pizzeria

Work continues along the 1000 block of K Street where David S. Taylor Interests Inc. and CIM Group are bring a vintage Dive Bar, pizza restaurant and upscale night club to three building that have been vacant more than eight years. The project received a $5.7 million subsidy from the city which also included the land last year to kick start the project. The money came from a pool of proceeds from the sale of the downtown Sheraton and are earmarked for downtown development. San Francisco entrepreneur George Karpaty, a seasoned night club and restaurant owner, plans to open three venues on the block: a nightclub for the over 30 crowd; a "dive bar" with an aquarium behind the bar; and a gourmet pizzeria. Karpaty will try to stand out in Sacramento with three unique businesses: Frisky Rhythm Dance Club, Pizza Rock and Dive Bar which will be a warm water, 100,000-pound aquarium with an occasional visit by a mermaid or a merman. It looks to me the exterior design changed a bit since the renderings were released, the buildings now look to have second story windows, but I don't think they are anything more than show.

Downtown Residential Hotel Report

Today the Sacramento Housing and Redevelopment Agency will submit a report (item 9) to the City Council on the required number of residential hotel units (712) located in downtown Sacramento.

Currently there are three single room occupancy (SRO) residential hotel projects in various stages of rehabilitation or financing approval: the YWCA (32 units), the Hotel Berry (104 units), and 7th & H SRO Project ( 150 units). The rehabilitation of the YWCA is nearing completion. The Hotel Berry project received an allocation of nine percent low income housing tax credits in September 2009 and an award of American Recovery and Reinvestment Act (ARRA) exchange funds in December 2009. Disposition of the Hotel Berry property to the nonprofit developer Jamboree Housing Corporation and commencement of construction is anticipated in summer 2010. The proposed 7th & H SRO Project which will create 150 new efficiency units is applying for nine percent low income housing tax credits in June 2010. The 7th & H SRO Project has been identified as the replacement site for the 19 units that were lost at the Wendell and will further the goals of the City's SRO Preservation and Replacement Policy adopted to encourage "no net loss" of SRO units in downtown Sacramento.

Several of the hotels surveyed are less than fully occupied due to deteriorating physical conditions and the challenging rental market. Currently, city staff are evaluating financing options for the renovation of the Ridgeway Hotel which requires substantive improvements. The Marshall Hotel owner is planning to convert the property to a market rate boutique hotel when market conditions improve. If the use does change, 95 existing residential hotel units could be withdrawn and replacement units would need to be identified.

The New Crocker Art Museum

Yesterday I got a chance to take a look at the new Crocker Art Museum expansion, the Teel Family Pavilion, and it’s curved planes and glass-enclosed reception area were just a couple of areas that made a lasting impression on me. With the grand opening drawing near, this 125,000sf expansion will surly make Sacramentans proud. These striking additions are nearly paid for with $92 million in donations with a final objective to reach $100 million in this capitol campaign.

The building was designed by Gwathmey Siegel & Associates Architects (GSAA) and includes a reception area, 260-seat auditorium, free Wi-Fi, café, and qualifies for the silver LEED certification. The grand opening will be free to the public on October 10, 2010 from 10am to 10pm and include activities, performances, and entertainment for children, families and adults.

Sutter Medical Center Progress

Last month the Energy Center off 29th Street was demolished shortly after the power center was switchover to the new Energy Center in the basement of Sutter Capitol Pavilion. Currently, foundation work is under way for the Anderson Lucchetti Women’s and Children’s Center with steel erection planned to begin in late 2010. On Wednesday, the base for the tower crane was installed in preparation of assembling the midrise building; it should be quite a site to see this tower rise to its final height of 153.5 feet.

Sutter Medical Center’s massive expansion features a development that calls for consolidating two major medical facilities – Sutter Medical Center and Sutter General Hospital – into one single campus. The last estimated cost to build the Midtown project was $665 million. Continued web cam viewing of the project can be seen here: http://sutterhealth.oxblue.com/smcsacramento/ and Hard Hat Tours can be requested here: http://suttermedicalcenter.org/expansion/hardhat/

New lottery Headquarters Construction

A few days ago I went by the new Lottery Headquarters off Richards Blvd. to see how the steel structures been topped out. The building will meet LEED Gold certification at an estimated cost between $54 million and $64 million witch will be financed with the lottery’s administrative funds. The 155,000sf building expected to the completed in July 2011.

Holiday Inn Makeover

It looks as though the Holiday Inn on J Streets getting a new paint job that will be quite an eye catcher. While I agree that this dated hotel does need a new coat of paint, I'm still not sure this is the color it needed. I believe this is the final touch on the $10 million makeover that started in spring of 2007 by updating the interior. Next time your driving south on I-5 take a look, the broad side of the hotel can’t be missed.