CalPERS has changed things up and hired a Houston-based
developer Hines Real Estate to take over the 301 Capitol Mall project.
According to The Wall Street Journal, an outside consultant expressed concern
about the former developer CIM performance. CIM failed to deliver as much as
$41 million in rebates that were negotiated as part of the nine-year-old
agreement.
The article also mentions that, with interest rates low,
major public pension plans are under heightened pressure to seek out
investments that will yield enough to cover benefits promised to firefighters,
police officers, teachers and other public workers. “We’re committed to fulfilling
our fiduciary duty to find the best investment path forward for this very
important project,” Ms. Frost said.
RCLCo, a real-estate consultant for Calpers, also outlined
problems with CIM Group in a performance review prepared for Calpers, the
people said. The memo, which isn’t public, said that CIM’s efforts at
developing properties in Calpers’ portfolio were slow.
Separately, a Calpers spokesman said that about $41 million,
a previously unreported figure, remains to be paid by CIM Group to Calpers on a
total $50 million in fee rebates promised under a 2010 agreement.
After reading this article in WSJ, it appears CIM’s ouster
was because of a lack of performance. If the economy softens, I wonder what
Hines will do? Will Hines scrap the current
proposed tower and build something unique for Capitol Mall. We don’t need to
see another uninspiring tower like this last one.
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