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.
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The Rubicon proposal asks for about $100 million in public subsidy--for the half of the proposal that would be located on property the city has to offer. The other half would probably require at least equal subsidy, plus the additional cost of land acquisition since the city doesn't own that land. Many of the features of the plan, like the farmer's market, would require ongoing city subsidy in order to remain economically viable (farmer's markets generally can't afford the rent of a new building without subsidy.) It's the most imaginative, certainly, but far from practical, and calls for an enormous public investment.
Can you point me where you got the number of $100 million? Because I have not seen them ask for anything near that.
Here are the numbers in comparing the two. Rubicon request for public funds for phase one $40M, $63M private, public funds pre unit $191,000. D&S/Taylor request for public funds $80M, private $44M, public funding per unit $313,000.
Those numbers should speak for them selves. Taylors only putting in 1/3 of the needed funds to build his proposal where as Rubicon has more than 60%.
It was in a Powerpoint presentation by city Economic Development staff. I don't know if it is online yet. Here are the numbers I saw--they asked each team to provide numbers only for Agency-controlled properties.
Team 1 (Bridge/Saca/Bagatelos)
700 Block
Debt/Equity $38.3m
Mezzanine Dept $1.5m
Agency Loan $11.1m
Total Cost $50.9m
800 Block
Debt/Equity $38.4M-52.9M
Mezzanine Dept $1.5M
Agency Loan $11.1M-23.6M
Total Cost $50.9M-78M
Team 2: D&S/CFY
700 Block
Debt/Equity $19.5M
Agency Forgivable Loan $8M
Agency Loan $8M
Total Cost $35.5M
Team 3: Taylor/CIM/Domus/Zeiden
700 Block
Equity $1.25M
Recovery Zone Bonds $11M
Agency Forgivable Loan $4M
Total Cost $16.25M
800 Block-North
Debt/Equity $10.25M
Agency MOPA Funds $16M
Total Cost $26.3M
800 Block-South
Debt/Equity $13.78M
Agency/State/Federal $6.18M
Total Cost $19.96M
(note: MOPA Funds are the funds the city got from the Sheraton sale that were earmarked for use in a future David Taylor project. Recovery zone funds are federal stimulus funds, they may not be available.)
Team 4: Rubicon, St. Anton, PCA
(agency owned property only)
700 Block
Debt/Equity $51.5M
Agency Forgivable Loan $15M
Permit Fee Credit $2.6M
Agency contribution (?)
Historic/CEQA $.5M
Parking Bond $10M
Total Cost $85.15M
800 Block North
Public Resources $36M
Public/Private Partnership or State and Federal Funds (?)
800 Block South
Debt/Equity $59.38M
Forgivable Loan $1M
Permit/Fee Credit $4.35M
Parking Bond $10.28 M
Agency TI $13.23M
Public Contribution Hist/CEQA $1M
Total Cost $89.24M
Team 4 Agency Owned Property Summary:
Equity $110.9M
Public Funding $99.88M
Total $210.39M
Again, note that this doesn't include about half of the project (the eastern half of the 800 block and southern half of the 700 block.)
Apparently the same presentation I saw will be given at the NAG meeting this coming Sunday, at the Hart Senior Center (27th and J, across from Harlow's) Monday the 21st at 6:30 PM. If you want the whole document that would be the best place to get it--and they always have free pizza from places like Hot Italian, Masullo and OneSpeed!
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 to basically misrepresent what Rubicon’s ‘Financial Ask’ of the City is. Rubicon is not asking for $100 M in City funding.
I'll get more into this with an upcoming post on Monday.
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