The Arena Summit

Today Federal officials were in Sacramento for a regional meeting to discuss ways in how to advancing development for a new sports complex.

Officials meet with Mayor Kevin Johnson’s Sacramento First Task Force who was assigned the job of evaluating seven proposals for a new sports and entertainment center to replace Arco Arena in North Natomas. The 12-member task force meet with officials from the U.S. Department of Housing and Urban Development, Environmental Protection Agency and Department of Transportation. The meeting is expected to explore ways the federal government might support a public-private partnership for a new sports complex.

"The Sacramento Convergence" Land-Swap Arena Deal

This is the most complex proposal of the seven and also appears to have the most supporters. With the NBA and Maloofs liking it, this could be the plan that moves to the next phase. In short, this deal involves selling Cal Expo land for redevelopment that would help finance a new arena, the old Arco site would become the new location for the state fairgrounds using Arco Arena as an exhibit hall, and the Railyards site would become Sacramento’s new entertainment sports complex.

I see a few sticking points before this plan can happen. First, will the State agree in selling Cal Expo to help pay for Sacramento’s new entertainment complex? Will the $68 million loan the Kings owe the city be forgiven? How will a new state-of-the-art fairground in Natomas be paid for if all the money from selling Cal-Expo goes to building the new sports complex in the railyards? This whole thing is vary complicated. The numbers also don’t add up when the cost to build a new fairground is also included into the over all development costs. The sale of land only pays for a percentage of the new arena in the railyards and not a new fairground to be built in Natomas.

Remolding of the current fairgrounds is the most cost effective way to upgrade dated Cal Expo, not building a new one at more that twice the cost. We all know that this is not what this whole proposal is all about, it’s about building a new arena for the city. It appears to me at this point, the movers and shakers of this deal aren’t even thinking about this part of the equation right now, but it will have to be addressed at some point.

The New Cal Expo 2015

Doug Tatara is the creator of the “Sacramento 2015” or “The New Cal Expo” which would build a new arena, theme park and express monorail between downtown and Cal Expo. Doug’s concept includes building a working theme park/entertainment mall which would be a celebration of California. The Sate Fair would be relocated to the racetrack property and both facilities would operate concurrently. This proposal has a unique financing program called Corporate Sponsors Equity Marketing Program that could raise $500 million by asking the top 100 advertisers in the country who spend $300 million annually on advertising and ask them to join a new entity that will own the arena. To participate they must contribute $20 million for a 20 years prepaid marketing commitment. Doug believes that if 25 corporate sponsors see the value in this venture, $500 million could be raised.

I’m like the financial creativity Doug brings with his proposal but I still dislike this location for a new arena unless they upgrade and widen the Capitol City Freeway. I have never understood why the east bound lanes before leaving downtown are at four lanes but then reduced to two lanes after Exposition Blvd. For an area that supposes to accommodate thousands of visitors a day during the State Fair, this strange freeway orientation seems to spell trouble year round and even more so when large events are be hosted at Cal Expo. I’m also certain the McKinley East Sacramento Neighborhood Association will fight this proposal tooth and nail.

Natomas ESC Arena Proposal

The Natomas ESC Partners have a vision to build a new arena to the north of the old Arco Arena with the intent to using both facilities and doubling the 200 annual events currently held at Arco Arena. The development team would enter into a public-private partnership with the City of Sacramento in order to gain control of the 100-acre City owned property. There would be a ground lease (“site lease”) between a newly created corporation and the City. The level of revenue sharing and operational control of the new complex would be subject to negotiations between the City and the owner of the facilities. Upon termination of the site lease all improvements would revert back to the land owner, the City of Sacramento. Natomas NSC Partners will be working with design and architectural firms such as NBBJ who designed the Staple Center in Los Angeles as well as Nachl & Lewis architects that brought Sacramento the US Federal Courthouse on “I” Street.

The proposed entertainment and Sports Complex would also include a high-rise hotel, green tech Research Park and an interwoven greenbelt. Their financing plan includes naming rights, pouring rights, private investment, seat-preference bonds, advertising rights and the sale of luxury suites. They will also be looking for access to low-cost, tax-exempt financing which they say they have adequate experience in for areas such as landmark projects like this. If this proposal was chosen by September of this year they believe a Sacramento Entertainment and Sports Complex would be constructed and operational for the 2014 NBA Basketball Season.

This location (they say) is the least expensive site to develop amongst those other plans under consideration, although they did not name a price. I see the parking as an issue with a majority of it on the south side of Arco Arena, it just seem odd compared to other suburban stadiums and arenas and people won’t like that. I also see the entire green park space as a problem on two counts. One, the cost in maintaining so much green acreage when the city gets the facilities and land back after the lease is terminated. Our city is already struggling to keep the parks we have in good shape, this additional work load would really stretch resources. Two, the addition green park space would need to be watered and put even more of a strain on a city that’s been suffering from drought fatigue for years. Don’t get me wrong, I love parks and everything they bring to a community but I think this one is too big. I believe three or four smaller parks spread through the area would make a bigger impact on near by residential communities.

Sacramento Intermodal Transportation Facility Event and Art Center

Thomas Enterprises, Inc. has a proposal of a Sacramento Intermodal Transportation Facility (“SITF”) that would make our city proud. To be located just behind the RR Depot after the tracks are moved north, this would be a $500 project that would have key design aspects including visual references to the history of the project site and its significance as the western terminus of the Transcontinental Railroad. Similar architectural design elements would be integrated into the complex like the existing historic Depot, REA building, and Central Shops Historic District. The Arts Center along with the elevated Pedestrian Bridge will serve to link the historic districts and downtown Sacramento as a unique, historic, point of destination with a clear sense of purpose and place for visitors and residents. A parking structure for 1,200 parking spaces would be attached to the SITF building with the intent to distribute parking for the Event Center within a 15 minute stroll, using downtown’s existing 12,000 public and private spaces within that radius.



Their financing strategy includes a public-private partnership (“PPP”) comprised of the City of Sacramento, Thomas together with other partners. The PPP will include the operators of the Community Event Center and the Community Art Center as well as other developers and public entities. It is anticipated that the Sacramento Intermodal Transportation Facility including the Events Center and Arts Center, will be publicly owned. The land to build the SITF is already owned as a PPP and does not require any acquisition costs or significant infrastructure costs.

The Core Arena Proposal

This concept is one of my favorites and turns what is now four blocks of a dying mall into an entrainment complex with a shopping mall wrapping it on three sides. I really like the rendering above of the arenas glass walls traveling up its wall opening it up to people on the street. The roof top gardens are also a special feature that would be unique that everyone could enjoy.



I believe the developer expects to spend around $500 million to build this all-around handsome center but something tells me it would be closer to $700 million after the land is bought from Westfield and demolition costs are included. I don’t remember hearing where financing would come from but that doe’s not mean it was not discussed during the busy night. If anybody can fill me in please post a comment.

This is the kind of facility that would really draw people to the area and I hope it can be pushed forward in the development process. The proposal was presented by Ali Mackani with the support of Lionakis and and The Makers Lab.

Arena Sports and Entertainment Concepts

Tonight’s arena presentations at City Hall were inspiring. Of the seven original proposals submitted to City Hall last month, three stood out in my mind as having potential to take the next step if funding can be found. Because there were so many renderings to post and I’m short on time for the next couple days, I’ll post one or two of the proposals a day till I get them all up. Tripp Development was the only proposal that did not display any visuals or hand out any info on their proposal. They did make a seven minute presentation talking about the cities goals and ideas to obtain financing, but that was about it.

I’ll start with one that was called the Sacramento Riverfront Entertainment and Sports Complex by M & M Group who was energized with both renderings and ideas to gain financing to move forward. I personally think this one is a no-go since the city just approved another Dock's development at the site and the developer still has three years to start construction before their permits expire. The M & M Group ideas also include an electric Trolley that runs from Front Street up R Street to 19th Street as well as a RT Entertainment Trolley line that swings up Broadway and over to midtown and then back to the proposed arena. Although some parking will be built next to the structure, most parking and will rely on people to park at already existing parking structures downtown and then take the Trolley to the arena. I love the idea of an arena on the river but I just don’t feel it with this one. Here’s a link to learn more about the proposal and their financing ideas estimated at $750 million http://www.arenaontheriver.com/ .

Arena Proposals Open House

This Thursday the 14th the Sacramento Arena Task Force will showcase all seven of the arena proposals in the lobby of City Hall at 915 I Street. Each developer will make a short presentation starting a 5 pm with developers afterward taking questions from the public.

Last week I got to see one of the proposals by Ali Mackani and Team and I was impressed with the amount of detail and time spent to make the proposal feasible. The idea of remaking the east end of the mall into a arena/shopping center with roof top gardens was an innovative way to improve the four block area. The open house will be from 5 to 7 pm this Thursday.

Sacramento River Crossing Study

The new City of Sacramento General Plan includes additional Sacramento River crossings without specifying the location or number of crossings or the transportation modes served by new crossings. The cost of the study will be $260,000 with both The City of Sacramento and the City of West Sacramento sharing the costs for the planning study with West Sacramento contributing $60,000 to that total. The study is expected to be completed in one year, starting in January and ending in December 2010.

The study will include:
• A transparent and proactive public outreach process;
• A purpose and need statement which is grounded in the community values stated in the two cities' General Plan policies and expressed by stakeholders;
• Development of alternatives to include build and no-build scenarios that consider various bridge cross sections types (i.e. types of travel modes that are served), various locations, and number of crossings;
• Planning level analysis of opportunities, constraints, land use implications, impact assessments, travel demand modeling, and costs estimates to inform the process.

http://sacramento.granicus.com/AgendaViewer.php?view_id=8&event_id=80

New Arena Proposals

The Mayor made a call out in November for prospective developers to turn in their ideas for a new Sacramento arena by December 24th and seven proposals were received. Of the seven ideas by developers, one over-view site plan was released and in my opinion we can go nowhere but up from here. Above is a plan by Tripp Development/Cachet Realty Group, Inc. and it looks as though it might have been whipped together in a matter of minutes before hustling it down to City Hall.

The Tripp Development plan includes The Towers as if there is still a chance they will be built… but they died three years ago. I also wonder why this rending which was done with a ball point pen also includes a deck over I-5 when just a few months ago the city cancelled pursuing that idea after more than ten years of study. My last thought on this rendering is that it looks as though it was an after thought and hardly something of any merit, I can't imagine any of the others presenting their ideas in this same format. It was only a few weeks ago The Capitol Creative Collective in partnership with The Downtown Sacramento Partnership hosted their first Idea Fair on vision for future downtown development. I think the Mayor should also talk to these guys to see what they come up with… all of whom will also pitch their ideas for free.

In the end it’s all about where the moneys going to come from to pay for the new arena. In the last ten year nearly all but one of the seven proposals submitted to the Mayor have been proposed before. Their is one new site proposal for the The Docks area which doe’s not make any sense when just a few weeks ago the City Council approved both the plan and EIR for the Docks to be developed.

Here is a list of the seven new arena proposals as described by the Sacramento Press.

Thomas Enterprises, Inc. and Team, Sacramento Railyards

The offering proposes to build on years of planning by the city of Sacramento and combines regional mass transit, large-scale community events, arts and entertainment venues in the city's downtown and region.

The Kamilos Company and Team, Sacramento Railyards

The proposed entertainment and sports complex will be located on the city-owned property, south of the newly aligned railroad tracks, within the Railyards Specific Plan.

Tripp Development and Team, Westfield Downtown Plaza

The development location is at the northeast corner of the intersection of Third and L streets, on the site currently owned by the city and developed as a multi-level parking facility.

M&M Group, led by Matt Haines and Team, Sacramento Docks Area

The Docks Area is located in Downtown Sacramento, adjacent to the central business district defined on the north by Capitol Mall, on the east by the I-5 freeway, on the south by Broadway and on the west by the Sacramento River. Immediately north is the Historic Old Sacramento District.

Doug Tatara, Cal Expo

This proposal includes a theme park and arena at the Cal Expo Fairgrounds location.

Natomas ESC Partners and Team, Natomas

The site proposed is the city-owned 100-acre property adjacent to and north of the existing Arco Arena and just south of Del Paso Road, minutes from Downtown Sacramento and five miles from Sacramento International Airport.

Ali Mackani and Team, Westfield Downtown Plaza

(The proposal is) centrally located in the heart of Sacramento’s downtown on the current site of Westfield Plaza’s east end. The plan proposes an extensive retail experience, dining options and a public park.

Sacramento Skyline Sunsets

These were taken in September from the roof of the L Street Lofts at L & 18th Street. Please click to enlarge

City Council approves Docks plan

The Sacramento City Council on Tuesday approved both the plan and EIR for the Docks to be developed next to the Sacramento river as well as the rezoning of 29 acres to general commercial from heavy industrial.

The specific plan for the Docks includes:

• 1,000 residential units;
• 200,000 square feet of office;
• 43,000 square feet of retail.

Adoption of the plan allows for a shovel-ready site when the market for development improves.

Westfield to step aside from Downtown Plaza

This has got to be the Mayor's biggest achievement of his first year in office but it's far from anything but talk at this point. Till a buyer is found who will pay Westfield asking price and also wants to dump millions of dollars into transforming the mall into something better, it will be many years till anything positive happens there. Congratulation Kevin, I hope you can make this work.

The following was posted on Mayor Johnson's website:

One interesting challenge of my job in Sacramento’s weak mayor system is dealing with high-level people from around the world. Frankly, it can be helpful when world-class executives overlook the fact that Sacramento has a weak-mayor government. Sometimes, it’s best not to dwell on our city’s weakness. A case in point is my dealings with Westfield, the world’s largest retail mall operator.

For years, the relationship between Westfield and City Hall could be summed up with one word: Disagreeable.

No more. I am proud to say I have developed a positive, special relationship with Westfield. I can meet with top executives and talk business on a level playing field.

This shows how personality can triumph over charter limitations.

The relationship with Westfield is crucial because Westfield controls a key part of our city – the Downtown Plaza shopping center, exclusive of Macy’s.

As Westfield’s position in the mall struggles, downtown also struggles.

My talks with Westfield executives were crisp, efficient, always respectful and professional. That’s how Westfield operates.

Simply, I asked Westfield to step aside from the Downtown Plaza if the company wasn’t in position to invest at a significant level. Obviously, I don’t want our city held hostage.

To its credit, Westfield agreed.

The next steps will be critical. Months ago, I assembled a team of city experts to create a new vision for the K Street corridor, including the Downtown Plaza.

Our team listened to public testimony and came up with an inspiring vision that includes reconnecting the downtown grid from the Sacramento River to the Convention Center.

Westfield shared some of the vision, but had concerns. Obviously, our dream is expensive. But we are not talking about wallpaper and light fixtures. We are talking about a re-imagined downtown: a huge project creating economic development and thousands of jobs.

Again, Westfield stepped up and said they respect Sacramento enough to cooperate in a sale or search for new investment.

Now it’s up to me to find the right investment and development groups to buy Westfield’s positions in Downtown Plaza.

These deals can be very complicated. We have a long way to go.

But the victory here is that the city and Westfield are approaching the future as partners, even if we agree to part ways. Westfield wants downtown to prosper even if the company leaves Sacramento.

That’s what relationships are all about.

http://www.kevinjohnsonformayor.com/kjfm/?s=downtown+plaza

8th & K Street Hotel Proposal Update

A revised proposal by USA Hospitality, Inc. and their equity partners Consus Asset Management and Industrial General has been submitted for building a Marriott Renaissance Hotel at the corner of 8th & K Street. The new proposal includes a decrease in the number of hotel rooms from 409 to 300, and a decrease in the number of parking spaces from 372 to 350 while adding 100 condominiums on top of the parking garage as a second phase of the project. The total cost to build the project went up from $137 million to $162 million along with the needed city subsidy to build from $31.5 million to $33 million. The developer has asked that the city give them the land which is city-owned for free, and to forgive taxes on the hotel for the first few years of its operation as part of their needed subsidy deal.

The property has been tied up for 14 months in an "Exclusive Right to Negotiate" with USA Hospitality, Inc., but on December 8th the city staff will recommend releasing the Request for Qualifications for the 700 and 800 blocks of K Street with a due date of February 12, 2010. It’s anticipated that the city staff could return to the Redevelopment Agency by early April with several other proposals for the 8th & K Street site. In that time USA Hospitality must do three things.

1) Obtain stronger financial commitments from all equity financial partners.
2) Developer conduct an assessment of the Bel-Vue to determine the costs associated with preserving the façade.
3) Complete negotiated business terms for inclusion in Disposition and Development Agreement.

I still don’t see the value in the city giving away $33 million in land and future taxes when just two blocks up the street at 10th and K Street Toni Giannoni is asking for $10 million to build a 165-room hotel that better fits our market. Toni also has an excellent record of finishing projects downtown where there are more development regulations that can tie up a proposal. In the case of the 8th and K Street design, the developer has a half block to work with, so instead of a massive parking garage the parking should be spread out over the entire half block above the lobby and ground floor retail but below the hotel rooms like has been done with ten other high-rises in downtown. If the city can nudge the developer to do this sort of design instead, the proposal would actually be shorter but the curb appearance would be far nicer. We don’t need another 6 story car garage at the corner of 8th & L Street; car garages have a history of deadening side walk activity for entire blocks and devaluing distinctive corners in our city. I hope both our City Council and planners consider the consequences, there is no need to repeat mistakes of the past again.

City owned parking garage across from city hall at 10th & I Street

Yee Fow Center

As part of the Sacramento Railyards to commemorate Chinese heritage a privately-funded Cultural Center is currently being planned to provide cultural exhibits, performances, banquets, and a world-class trade facility. The development of the Yee Fow Center of History, Culture and Trade would also include residential, museum, library, educational class rooms, retail, and offices for trade oriented companies/associations, fitness center, and Chinese Garden.



The Trade Center includes a Residential tower of an approximate 40 stories with 360,000sf, Chinese Garden landscape of 1.38 acres, podium with office space of 93,000sf, history and culture center 100,000sf, retail 63,000sf. A “Feasibility Study” to determine the framework defining revenue, operating expenses, capital cost, and anticipated attendance still needs to begin. Stantec Design Firm did these renderings back in 2008.

More information on the Yee Fow Center

Dim Lights at 500 Capitol Mall

For some reason the exterior lights of 500 Capitol Mall just aren’t as bright as they were advertised three years ago when it was approved to build by the city. Unless you standing right in front of the tower, the dim lights that are on it can hardly be seen and a big disappointment compared to the night rendering (shown above) making it really glow like the Wells Fargo Center on Capitol Mall. I have contacted the leasing company of the tower several times asking if the exterior lighting was going to be improve only to be told they would get back to me but never did. I was really hoping that this building would add more dramatic lighting to Capitol Mall like other new high-rises on the Mall. Unfortunately, I think this will be the best were going to see from this tower and it will join the many other high-rises downtown that have also failed to light-up as advertised like the Federal Courthouse and EPA tower on “I” Street. Aesthetics like lighting are so important now that our cities tiring to push forward a makeover of Capitol Mall from the riverfront to 9th Street, let’s hope some lighting improvements can be made in an effort to revamp the Malls future.

Downtown prepares for Carnival of Lights

This holiday season, the Carnival of Lights will delight visitors with a dazzling display of lights throughout the Central City from the waterfront through Midtown starting the week of Thanksgiving through January 3. The collaborative effort will feature architectural lighting, holiday décor, and holiday events including the Theatre of Lights in Old Sacramento and the Carnival at St. Rose at 7th & K streets.

“Downtown has always been a center for holiday activity. This year we’re taking it up a notch with the Carnival of Lights,” said DSP Executive Director Michael Ault. “Downtown, Old Sacramento and Midtown are partnering up to create a festive pedestrian experience that connects local events with nearby businesses, restaurants, theaters and other cultural attractions.”

Downtown landmarks including the Memorial Auditorium, Community Center Theatre, Elks Building, Hyatt Regency Hotel, Sheraton Grand Hotel, and Citizen Hotel will be aglow with colorful lighting as part of the cooperative program. The DSP, in collaboration with SMUD and the City of Sacramento, will illuminate K Street with LED twinkle lights and street poll decorations on J, K and L streets and Capitol Mall. The DSP is also partnering with private property owners and downtown businesses to participate in the holiday festivities by lighting their buildings.

Theatre of Lights
The Carnival of Lights will kick off in Old Sacramento the night before Thanksgiving with the annual Old Sacramento Tree Lighting and the Theatre of Lights, produced by the Old Sacramento Business Association. The Theatre of Lights will bring history to life through a narrated show of lights, sounds and visual effects. The light show will take visitors back to a time when the beloved poem The Night Before Christmas was first introduced in Sacramento in 1857. The first Tree Lighting of the season and Theatre of Lights inaugural night will take place on November 25 at 6 pm in Old Sacramento at Front and K streets. Two 10-minute light shows will run every Thursday through Sunday at 6:30 pm and 8:00 pm through January 3. For more information, visit www.oldsactheatreoflights.com.

Carnival at St. Rose
The Carnival at St. Rose is a 5-week holiday event that will transform 7th and K streets into a festive winter carnival. The event will take place in lieu of the ice rink this holiday season due to conflicts in construction schedules with the K Street Streetscape project and renovation of St. Rose of Lima Park.

Open daily November 27 through January 3 from noon until 8:00 pm, the Carnival at St. Rose will feature a ferris wheel, classic carnival and arcade games, and food vendors. In the spirit of the season, the carnival will also incorporate live entertainment, a gingerbread house chef challenge, a craft fair, and charity events. Admission to the event for a two-hour session is $6 for children and seniors and $7 for adults. Private parties and group discounts are available with advance reservations.

The Carnival at St. Rose is produced by the DSP and is expected to draw visitors from all over the region. The event is presented by the Westfield Downtown Plaza and sponsored by the University of San Francisco – Sacramento Campus, UC Davis Children’s Hospital, KCRA 3, My58, Johnny Rockets and the Holiday Inn Capitol Plaza.

For more information, visit www.downtownsac.org/carnival.

Allowing Bicycles on Portions of K Street

Next week the City Council going to remove restrictions of bicycle riding on portions of the K Street Pedestrian Mall in an effort to make a better connection for bicycles between Old Sacramento and the K Street Mall. I think this will be a good thing because this poor stretch of road needs to increase activity in an effort to bring more people back onto the street. Bicycles still would not be allowed on the sidewalk areas but only the areas between the yellow detectable warning strips.

Capitol Mall Redevelopment Plan

The City of Sacramento looking into creating a stronger more vibrant connection from the Sacramento River to the Capitol by increasing activity on the Mall. The Cities currently looking into holding a design competition for the development from the riverfront to 9th Street where the Mall would become a major attraction for both residents and tourists by the year 2015. The variety of festivals and activities that regularly occur in its beautiful public spaces would draw hundreds of thousands of people annually. The magnificent public art and public works projects that connect the waterfront to the Capitol will be featured on web sites and in magazines around the world. The freeway will no longer feel like a dividing line. Instead, a tree-lined concourse with water features will lead people to and from the riverfront to enjoy the magnificent gateway to California's Capital. Key strategies the vision for the short term (1 to 3 years): · Create more events, more festivals to draw people to the Mall. · Focus on "moveable pieces",e.g. 1-5 bridge, Mall median, Lot X (southwest corner of 3rd and Capitol Mall). · Leverage existing transportation funds to get something done now that supports the long term vision. · Deploy circulator buses to enable people to move freely and easily from Capitol Mall to Downtown Plaza, K Street, Old Sacramento, the Railyards, mid-town, R Street, and West Sacramento. The Mid-term plan (3 to 5 years): · Encourage the development of select numbers of retail establishments. · Develop the CaIPERS site (northwest corner of 3rd and Capitol). · Connect Capitol Mall to the river, metaphorically, physically in all aspects. · Design highly visible, world-class gathering points for tourists and residents along the Mall. · Develop more public transit solutions to enable people to circulate from Capitol Mall to Downtown Plaza, K Street, Old Sacramento, the Railyards, mid-town, R Street, and West Sacramento. Next week on the 10th the City Council will adopt a resolution to be in partnership with the American Institute of Architects and stakeholders to develop a program and hold a design competition for a comprehensive Capitol Mall Plan from the riverfront to Capitol Mall, and the development of a project level design for a specific location. November 10th 2009 City Council Resolution Capitol Mall – Circa 1950

10th & K Street Hotel Project

It looks as though Toni Giannoni will continue to pursue building a 165-room hotel in downtown Sacramento at the corner of K & 10th Street even though the 8th & K hotel proposal is still moving forward. It’s anticipated to be an urban style Marriot designed by the renowned hotel designer Marc Hornberger who has also designed the W hotels in San Francisco. This hotel concept includes a pool, approximately 8,000 square feet of meeting space, and downstairs bar and lobby area with grab and go food service, as well as ground floor retail along K Street. The proposed Courtyard by Marriot would be a 12-story, upscale, select service hotel with a sophisticated urban design.

The development team is the 10th and K Street Hotel Investors, LLC, which is a partnership of local developers with a strong track record of development in Sacramento. The partnership includes Brian Larson who was part of the development team for the Citizen Hotel, Jim Brennan who recently completed the office condominium project at 1001 K Street, and Toni Giannoni who has a long development history in Sacramento including Meridian Plaza and the recently completed Marriott Residence Inn at 15 th and L Streets.

The total development cost is estimated to be $43 million. In today's capital market this project can expect to attract an estimated $22 million in conventional financing and $11 million in equity investment, leaving a development gap of $10 million. City staff has begun researching public funding options to assist in the development of this project.

On Tuesday November 3rd, the city will authorize city staff to evaluate several options to fund the gap of $10 million with the posibility of a Transit Occupancy Tax (TOT) fund or to also use the Recovery Zone Facilities Bonds made available by the American Recovery and Reinvestment Act of 2009. The bonds allow for lower financing rates, but require some sort of financial backing from the City or the Agency. City staff is working with the City Treasurer, the Budget Office, and the City Manager to investigate the possibility of utilizing this unique bonding opportunity.

Another option is a HUD 108 loan for approximately $4.7 million combined with a second loan for the remaining $5.3 million. City staff would also investigate potential resources within the City and Agency that could be utilized as capital for the second loan.

In either financing scenario, the City or Agency issued bonds or loans would be repaid or the payments pledged would secure the developer's financing.

If the City Council approves the recommendations to move forward, this will allow city staff to further investigate the financial feasibility of the hotel project so that more formal business terms can be presented at a later date. With this authorization, the developers would expend funds to further refine the hotel concept and result in moving the proposed project forward.