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Old Posted Aug 3, 2007, 3:35 PM
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State looking for developers to build its West End
By Michael Shaw of The Sacramento Business Journal

August 3, 2007

The state is looking to commercial developers to revive the 1.4-million-square-foot office project in downtown Sacramento known as the West End complex, shelved as a state-financed effort after construction costs spiked.

If developers take over the project, it wouldn't necessarily be built on the original sites, which cover 2½ blocks south and west of the Capitol.

Officials expect to solicit proposals within a month or so for building the massive complex, designed to house the entire California Resources Agency, which employs 16,000 statewide. Sites could be located within three miles of the Capitol.
A request for proposals that would describe the project's parameters awaits approval at key state offices such as the Department of General Services and the Resources Agency, said Anne Cavanagh, the project's program manager within General Services.

The state can't build West End for what it now would cost; estimates have risen to $620 million, about 59 percent higher than the $391 million expenditure authorized in 2001. Building at today's higher steel and concrete prices would require reauthorization by the Legislature.

But leasing the space after it's built by a commercial developer, with a purchase option down the road, makes more economic sense, Cavanagh said.

The project, known as both West End and West Side, originally was envisioned as two buildings, each taller than 20 stories, replacing smaller offices housing different state offices on two city blocks. Developers could submit proposals to build on the original site or elsewhere. Other sites might include the Richards Boulevard redevelopment area, alternate downtown sites or the West Sacramento riverfront, said John Dangberg, assistant city manager of Sacramento.

Developers of large office buildings await the specifications. Those guidelines, enough to fill three binders, would likely leave the design details to the developers but require them to meet Leadership in Energy and Environmental Design standards for efficiency and water conservation.

"We're very interested," said John Igoe, a senior vice president with Sares-Regis Group of Northern California, which is working with Ramco Enterprises Inc. and Clark Pacific Corp., a maker of precast concrete structures. The latter two control about 8 acres along the "Triangle" area of West Sacramento riverfront that already has entitlements for office space.

"We don't yet know what (the state's) schedule is for putting out the invitation," Igoe said.


A selling point for the group's property, just south of Raley Field, is the elevation. It sits higher than other areas around the capital and is therefore better protected against flood, said Dan Ramos, vice president at Ramco.

The area is expected to get streetcar shuttle service, which might satisfy the state's requirements that the site be located near rapid transit.


Ramos said developers are more likely to hold down construction costs and create cost-saving designs than on projects done "in house" by the state.

State administrators have met with local government officials in Sacramento and West Sacramento about the project.

Les Bowman, redevelopment manager for West Sacramento, said another major property owner in the Triangle, Fulcrum Properties Inc., also has expressed interest.

While entitlements already exist, the Triangle needs utilities and roads. Bowman said a future transfer of a large complex to the state has implications on the city's ability to pay for that infrastructure. That's because once a building is transferred to the state, it's removed from the tax rolls. The lack of tax revenue would make it difficult for the city to finance sewers, roads and other public works.

Sacramento has also been spreading the word, though officials won't say to whom. "We're contacting others about the project and encouraging them to respond," Dangberg said.

Even after proposals come in, likely within 90 days after the request is issued, which is the standard deadline, the Legislature would have to authorize the new project.

"In some respects, we're in the same place we were last year," Cavanagh said, referring to the fact that requests for developers' proposals haven't gone out. She expects 10 to 15 responses.

As originally conceived, the West End office buildings would have occupied the blocks between N and P streets and 7th and 8th streets. The site also contains the historic Heilbron House, which would have to be preserved or moved.

The Resources Agency now has offices in a building at 1416 9th St. and other leased property.

http://sacramento.bizjournals.com/sa...y3.html?page=1
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