Sacramento Proposal/Approval/Construction Thread - III

[sugit]

Sacramento developer gets option to buy historic apartment building
Sacramento Business Journal - by Michael Shaw Staff writer

D&S Development Inc., a Sacramento development firm that has redeveloped many older properties and successfully turned them into new mixed-use projects, has taken over an option to purchase the empty Maydestone building at 15th and J streets, a 34-unit apartment building, according to the investor who previously held to option to buy it.

Joe deUlloa, who owns properties around the city, had an option to purchase the Maydestone for several years, but had been involved in a dispute with the building owner over repairs needed to complete the transaction. DeUlloa said he decided to assign his interest to D&S and move on with other plans, adding that the terms of the deal were “in the low six figures.”

D&S created the iLofts in Old Sacramento by revamping an old Mechanics’ Exchange building and has been turning a former warehouse district on R Street into residential lofts.

Officials at the company could not be reached for comment, but CB Richard Ellis broker Ken Turton, who represented both sides in the transaction, said he expects that a developer with a strong track record like D&S will provide a quality project at the Maydestone building.

[wburg]

Originally Posted by sugit

Sacramento developer gets option to buy historic apartment building
Sacramento Business Journal - by Michael Shaw Staff writer

D&S Development Inc., a Sacramento development firm that has redeveloped many older properties and successfully turned them into new mixed-use projects, has taken over an option to purchase the empty Maydestone building at 15th and J streets, a 34-unit apartment building, according to the investor who previously held to option to buy it.

News like this is good enough to make me break my moratorium on using emoticons!

[SactownTom]

That is great news--wburg i'll even forgive your use of emoticons. D&S does amazing work. I can't wait to see how they put a shine to the Maydestone. I'm sure it will be top notch. Maybe the city will let them punch some windows into the AT&T building and turn that place into apartments next.

[daverave]

I received an e-mail this morning that raised an alarm about a significant change in the city's approach to development review:

"On Thursday the Sacramento Planning Commission will have a public hearing on a proposal by the Development Oversight Commission (DOC), a City-appointed group of development interests, to eliminate the City's Design Review Commission and change the development approval process in the City so that City staff will make most planning and design decisions administratively, leaving no opportunity for public input."

That last part about eliminating public input may be hyperbole but this e-mail is making the rounds. I got it via ECOS. The functions of the Planning Commission and the Design Review Commission would be combined into a new, seven member board under the new proposal.

More info at City website including letter from DOC:
http://tinyurl.com/ah5pk7

[urban_encounter]

Originally Posted by daverave

I received an e-mail this morning that raised an alarm about a significant change in the city's approach to development review:

"On Thursday the Sacramento Planning Commission will have a public hearing on a proposal by the Development Oversight Commission (DOC), a City-appointed group of development interests, to eliminate the City's Design Review Commission and change the development approval process in the City so that City staff will make most planning and design decisions administratively, leaving no opportunity for public input."

That last part about eliminating public input may be hyperbole but this e-mail is making the rounds. I got it via ECOS. The functions of the Planning Commission and the Design Review Commission would be combined into a new, seven member board under the new proposal.

More info at City website including letter from DOC:
http://tinyurl.com/ah5pk7

Old news but long overdue. If you've ever attended those meetings (and perhaps you have) then you can see that more often than not, duplicate the work and often times send developers contradictory signals.. Lastly considering some of the less than stellar projects that have come out of design review I have to ask myself "what's the point?"

[daverave]

Originally Posted by urban_encounter

Old news but long overdue. If you've ever attended those meetings (and perhaps you have) then you can see that more often than not, duplicate the work and often times send developers contradictory signals.. Lastly considering some of the less than stellar projects that have come out of design review I have to ask myself "what's the point?"

Yeah, I've attended plenty of both and they are gruesome, painful experiences. I would contend, however, that projects usually only get tweaked around the edges at design review and that less than stellar projects are more of a case of "garbage in, garbage out." For that I would cast the blame on weak designers and penny-pinching developers, not design review.

[daverave]

Originally Posted by urban_encounter

Old news but long overdue. If you've ever attended those meetings (and perhaps you have) then you can see that more often than not, duplicate the work and often times send developers contradictory signals.. Lastly considering some of the less than stellar projects that have come out of design review I have to ask myself "what's the point?"

It was quite the contentious meeting tonight and not well-received by either the PC or the public as put forth by the DOC. Some choice quotes from commissioners: "cart before the horse.... blindsided... sounds like a done deal... appalled... not all customers (meaning public) consulted... etc." A former commissioner suggested eliminating the DOC since they are the most junior body. No cost savings analysis was available. There has been little to no input from the PC on the process. The consensus was that the process has already gotten too far, too fast. The public testimony was not favorable either. Wburg sighting! The DOC claims that they are intending to do public outreach to neighborhood groups. They have a lot of work to do yet with the "yammering band of sour grape swillers" in the words of Marcus B.

[econgrad]

Friday, February 13, 2009
Fix Sacramento’s gateway, too
Sacramento Business Journal

In downtown Sacramento, K stands for Key.

Ask most people how to build a more vibrant downtown and spur growth in the central district, and they’ll tell you K Street is the key. Those people are right; we need a bustling retail and dining district. We need a major investment in the Westfield Downtown Plaza so people go there to shop. We need more businesses that stay open after dark. We might even need (gasp) cars on the pedestrian mall.

But I’m not certain K Street should be our priority. I’d like to trade it in for another letter: J.

J can stand for Judgment. Judgment as in the first impression many visitors to Sacramento get.

Ever driven into downtown off I-5? Exit onto J Street and your first take on Sacramento is bus stops, vacant buildings and borderline blight.

Don’t get me wrong, things are improving. The lovely Citizen Hotel adds some class to Caesar Chavez Park, and the windows from the Grange restaurant filter a nice glow onto the street. And the revamped Elks Building and McCormick & Schmick’s restaurant bring the busyness from the Sheraton Grand down a block or two. But have you ever walked between The Citizen and McCormick’s? Ever done it after dark? It’s less than pleasant.

What you’ll find, should you make the trip, are boarded-up windows, empty sidewalks (aside from a few stray blankets) and dim outdoor lighting (if there is any at all).

The south side of the street does have a few businesses — a Vietnamese restaurant, an urban clothing store, a law school and a liquor store. All but the liquor store are closed after dark. The north side has some offices, but at night the block looks abandoned from the street level.

The big problem is, we want people to make this trek. We want guests at the Sheraton to go eat dinner at Grange. We want people staying at The Citizen to go have a drink at the bar at the Sheraton. And, being a “green city” with few taxis, we want them to walk those three blocks. But, right now, I wouldn’t advise it.

Certainly, there are plans for this stretch. St. Anton Partners has entitled plans for Cathedral Square condos on the south side of the street. Plans for John Saca’s The Metropolitan, a hotel/condo complex, have been entitled for the north side of the street.

But given the economy, neither of those projects are going to get off the ground anytime soon.

So what should we do in the meantime? Well, let’s glance back at K Street for a second. David S. Taylor Interests is looking for a tenant at 1012 K St., formerly a Rite Aid. In the meantime, the company added lighting and is displaying art by Sacramento State students. A simple, low-cost way to make the street a little nicer. J Street property owners should follow the developer’s lead and spruce up their storefronts. A little effort would not only be a gesture of goodwill to citizens, but would also show visitors that Sacramento is actively working on improving the city’s core, rather than simply letting it gather dust until the right project comes along at the right time.

On Saturday, Sacramento will host the Amgen Tour of California bike time trials. More than 75,000 people are expected to visit downtown to watch, not to mention the usual Second Saturday crowds and people coming downtown for a Valentine’s Day dinner. Many of them will first glimpse downtown when they drive onto J Street. These visitors will make downtown vibrant for the day, not to mention spend money at restaurants and hotels.

Let’s hope they are too busy searching for a parking spot to look past the sidewalks to the empty buildings.

[wburg]

Those properties will need more than a little sprucing up...the Copenhagen building is still burnt to a crisp on the inside, and it has been a bat habitat for 20 years. The old Broiler/Biltmore buildings may be salvageable, but are probably a bit the worse for wear after being boarded up and used as occasional squats for the past decade. The Plaza building and the Art Deco building on the corner just need tenants, although the corner building could use a rescue from its awful street-facade remodel: tear out those big things blocking the windows and put a restaurant with a lot of big windows facing the street to kitty-corner the Grange.

The owners of the buildings have no interest whatsoever in "sprucing up" the buildings, because they just want to knock them down and build their towers. Repairing the buildings would make sense, and brighten up a dark patch of J Street, assuming that the owners can stop the visions of skyscrapers dancing in their heads. Personally, I'd like to see it happen: it would be a lot cheaper, and make a lot of sense, to use the existing buildings rather than knock them down.

[econgrad]

Originally Posted by wburg

Those properties will need more than a little sprucing up...the Copenhagen building is still burnt to a crisp on the inside, and it has been a bat habitat for 20 years. The old Broiler/Biltmore buildings may be salvageable, but are probably a bit the worse for wear after being boarded up and used as occasional squats for the past decade. The Plaza building and the Art Deco building on the corner just need tenants, although the corner building could use a rescue from its awful street-facade remodel: tear out those big things blocking the windows and put a restaurant with a lot of big windows facing the street to kitty-corner the Grange.

The owners of the buildings have no interest whatsoever in "sprucing up" the buildings, because they just want to knock them down and build their towers. Repairing the buildings would make sense, and brighten up a dark patch of J Street, assuming that the owners can stop the visions of skyscrapers dancing in their heads. Personally, I'd like to see it happen: it would be a lot cheaper, and make a lot of sense, to use the existing buildings rather than knock them down.

In the short run it is cheaper, in the long run it costs more: In regular guy terms = A skyscraper dancing in their heads would cost more but return much much more on their investment. Rehabbing the old buildings would not give the investors as much of a return, therefore not receiving (maximizing) as much income as possible from the land/developments. That area is too valuable now for many of those buildings. Skyscrapers dancing in their heads mean better investments in that area...

I am sure with you I will get an opposing response.

[wburg]

econgrad: Hey, you're the guy who posted an article about how the property owners should do something with the buildings that are there, personally I happen to agree with it.

The area is too valuable in theory for those buildings, but not in practice. The buildings remain vacant and unattractive because the only factor the investors consider important is, as you say, maximizing income from the land/developments. Things like unfriendly streets, boarded up buildings and the negative image to that part of the city are not part of the equation.

[econgrad]

Originally Posted by wburg

econgrad: Hey, you're the guy who posted an article about how the property owners should do something with the buildings that are there, personally I happen to agree with it.

The area is too valuable in theory for those buildings, but not in practice. The buildings remain vacant and unattractive because the only factor the investors consider important is, as you say, maximizing income from the land/developments. Things like unfriendly streets, boarded up buildings and the negative image to that part of the city are not part of the equation.

Maybe, or the city has been making it too difficult to tear the old buildings down and put up newer nicer high rises that would attract new businesses. I am not sure how to respond to the "The area is too valuable in theory for those buildings, but not in practice." statement. Area's such as this usually attract higher end class A tenants (large law firms, Banks, etc) and newer buildings appeal to such. This makes a much more profitable long term investment than just rehabbing what is there now. Either way, yes we agree, the area needs improvements. I published the article because it was relating to the thread. I just wish our city and attitudes would shoot for bigger and newer.

[wburg]

Old buildings don't seem to have that much trouble attracting new businesses: look at Grange, DeVere's/Mix, Cosmo, or many of the other businesses (and residences) locating in old buildings these days. When properly fixed up, an old building can attract new businesses as easily as a new building, so the age of the building isn't an obstacle. An old building that isn't maintained, on the other hand, doesn't draw those tenants.

The theory/practice statement: The owners of the buildings really want to build skyscrapers there, but they can't seem to get their act together for one reason or another. Rather than make use of the buildings they have, and clean up an eyesore in the process, they would rather let them continue to decay. The existing buildings could be made much more valuable, through maintenance and investment in the existing buildings.

The demolition of the existing buildings on both the 10th & J and 11th & J lots has already been okayed during the entitlement process, so that is no obstacle, but even having the buildings out of the way doesn't make things any easier, as we see from the big hole in the ground at 3rd & Capitol. It's more a matter of a property owner without the ability to "get it up," so to speak.

[snfenoc]

This is an interesting discussion that is beginning. I can see both sides of the coin:

During my walks around midtown and downtown, I have found there is a lot to like. However, many sites (especially the ones on J Street referenced above) make me want to vomit. I'm getting tired of the boarded up windows, the dingy facades, the smell of urine, and the lack of interest and life. I wonder... how long I will have to wait for the big dreams that haunt those sites to become reality? Will they ever become reality? I have my doubts. If construction costs (materials, labor, taxes, permitting, CEQA, etc.) don't come down significantly and incomes and economic activity do not rise significantly, I'm afraid Suckramento will not have the market to support 20, 30 or 40 story residential high rises - It sure as hell does not have one now. We may see properties changing hands/developers numerous times over many years and plans go from lofty to lam........uh........not so lofty before things actually happen. Heck, this is occurring already. Wouldn't it be easier to propose the lam....uh....not so lofty project in the first place? Yes, big proposals are more fun (right?), but the smaller ones are way more likely and immediate. When MARRS was proposed, I thought it was the dumbest thing I could ever imagine. "What? Tear it down! Build a skyscraper, dammit! Rehabbing a concrete pillbox does nothing to grow our city." Well, I was wrong. It is quite the lively spot; and I enjoy it a lot. Sure, I can fantasize about new high-rises maybe coming some day in the future, but that gets boring after 20 seconds or so. I'd rather be chomping down on some grub at Luigi's Pizza by the Slice, or high society-ing it at Ella (if I could afford it), or watching Forever Plaid at the Cosmopolitan Cabaret, or drinking tea at the Naked Lounge, or stuffing my face with those awesome chocolate chip cookies at Ginger Elizabeth's. I'd rather be where the life is. The past few years have taught me not to be impressed by plans, but by results.

The other side of the coin: There is only so much land available downtown. If every "historic" concrete pillbox down there is restored and quickly turned around into yoga studios, and news stands, and coffee shops, and bistros, and (insert hip urban hangout here), where will the high rise market go when (if) it actually comes calling? It still costs good money to rehab a concrete pillbox, so is it financially wise to invest in a rehab only to tear it down 5 or 10 years later when the high rise market improves?

What to do? I have no idea.

[travis bickle]

The first three rules I learned about real estate finance are:

1) More is better than less...

2) Sooner is better than later...

3) And something beats nothing all to Hell...

So I find this situation very perplexing. That stretch of J Street has looked like Hell for 30 years now (I can actually remember when Copenhagen was open for business.). Who owns them and what can they possibly have to gain by holding and not developing for so long? Are they waiting for a city pay-out ala big Moe? Good luck there as the City has zero money. Grandiose residential/mixed use? They missed out in the last boom and if you couldn't get a project financed in that market, you need to start over. Nothing residential will fly there for several years.

For years, Sacramento was a notoriously difficult place to move through the development process and that may have hindered efforts along J street. But my own experience over the last several months is of a planning staff and City Manger's office that is completely supportive of good ideas (and yes, I consider the project we're discussing in Sacramento a very good idea). I have to think that any proposal that would remove that wretched blight from J street (including rehabbing the existing structures) would find vigorous support at City Hall.

Are the owners some large corporation that uses the losses on their Sacramento properties as write-offs? Possible I suppose, but that kind of thing isn't as easy as it used to be. I don't know how they can continue to bleed money.

I also think the answer there is think small. Get something going there and energize that dead zone. Too much going around it to let this deplorable condition go on another minute.

I think the latest trend - K Street as an entertainment destination - is finally the one that will be successful. In this case the failure to attract much residential is going to turn out to be a blessing. Only took 40 or so years to figure it out. J Street can be a part of this too.

There is nothing wrong with "maximizing profits." That's why we all would like higher paying jobs for similar hours. But if we can't get the six-figure gig, I think most of us will accept something less instead of remaining out of work. The owners of these parcels along J street would appear to prefer unemployment. I just don't get it.

Btw - That hideous building catty-corner from the Citizen... I was interning in high school for the Architect who did that redesign... window blockers and all... Ed Kado of Ziggurat and 500 CM fame. I doubt he keeps that effort in his portfolio...

[wburg]

Originally Posted by snfenoc

The other side of the coin: There is only so much land available downtown. If every "historic" concrete pillbox down there is restored and quickly turned around into yoga studios, and news stands, and coffee shops, and bistros, and (insert hip urban hangout here), where will the high rise market go when (if) it actually comes calling? It still costs good money to rehab a concrete pillbox, so is it financially wise to invest in a rehab only to tear it down 5 or 10 years later when the high rise market improves?

Some vacant places to put high-rises once the market improves:
* The Docks
* The Railyards outside of the Shops area
* 3rd & Capitol
* The parking lot where Aura was supposed to go
* The parking lot next to Heilbron House at 8th & O
* The parking lot at I and 14th behind the phone company building
* The parking lot at 16th and J kitty-corner from Memorial
* The county court parking lot between 7th & 8th at G
* The vacant southeast corner of 8th & K
* H Street between 5th & 6th (it will be available for development once the track relocation is done)

Places to put mid-rises and mixed-use residential once the market improves:
* 3rd & R
* The aforementioned docks & railyards
* R Street's vacant lots in the teens and twenties
* Assorted vacant lots along the railroad tracks between 19th & 20th

None of those places require demolishing anything (or, at least, demolishing anything that hasn't already been demolished.)

But here is a short list of buildings that I personally wouldn't miss if they get knocked down:
* Any Buzz-boxes (the 1-2 story concrete tilt-ups mostly seen along R Street)
* Westfield Downtown Plaza, with the possible exception of Macy's
* The mini storage units along 16th Street
* The vacant bank at 4th & L

If there were any shortage of vacant lots in this town, then we could start talking about what old buildings we need the least. But we've got a lot of lots, and once we get through those, there are even more cheap concrete tilt-ups that we can do without, and shoddily built buildings from the past 20-30 years that won't last long enough to be landmarks.

But we also have a lot of buildings that are grossly underutilized and could be turned into very cool places with less investment--thus spurring positive change in the near future, instead of waiting for the next wave of cranes to arrive. Adaptive reuse is more labor-intensive, less resource-intensive, and has a stronger effect on the local economy, all of which are positive things in grim economic times. It also helps create districts with unique character and feel--people like old buildings if they're kept up, and in a downtown setting they mix very well with new buildings.

[econgrad]

Originally Posted by wburg

Old buildings don't seem to have that much trouble attracting new businesses: look at Grange, DeVere's/Mix, Cosmo, or many of the other businesses (and residences) locating in old buildings these days. When properly fixed up, an old building can attract new businesses as easily as a new building, so the age of the building isn't an obstacle. An old building that isn't maintained, on the other hand, doesn't draw those tenants.

These are not the tenants I am talking about. As I said, I wish the city would shoot for more. If you read my post, I am talking about high rises Class A office space that attracts Law Firms, Special Interests, Lobbyists, Medical firms, etc. Corporations that employ large numbers of people (in the hundreds, maybe even more). The area is prime real estate for these types of businesses but it is under developed. Saving the old buildings will do this: keep the area under developed and keep Sacramento the same. We need to look bigger, saving all this small stuff is just.. small minded, small thinking (I do not think your a small minded person Wburg, but the ideas of preserving old buildings in an area that demands so much more is just a waste). The idea of preserving in a high value area, low value buildings will continue to bring us what we all complain about in this city: mediocrity.

I know your intentions are good and you feel your ideas are best for the city, but constraining development in this city is going too far if we keep preserving and not progressing. Isn't this the time for "change" everyone?

Where are our grand buildings that house our fortune 500 companies? Not in any of the rehabbed ancient and historical 60 year old buildings we saved. Maybe that is why we don't have any F500 companies in Sacramento.

[daverave]

"The idea of preserving in a high value area, low value buildings will continue to bring us what we all complain about in this city: mediocrity."

Unfortunately, Econgrad, the trend in this city is for the high-rise construction to be very mediocre while the low-rise, rehab projects represent the better design. How many outstanding (or even non-mediocre) high-rise projects have ever been done here? I can list a bunch of fantastic rehab projects and virtually no good to great new high-rises. I'm a fan of the US Bank building and, to a lesser extent, the EPA building but they both have at least some faces at street level that are completely barren. The Fed Courthouse is a great looking building from a distance but it is a fortress where it counts at street level. Most of the high-rise government projects in this city are design garbage. And when you've got an Ed Kado designing projects like 500 CM, mediocrity is practically assured. That's why it was so exciting to anticipate a project like Aura with it's cutting edge design.

High rise projects also create the need for copious amounts of parking which sucks up a lot of the prime floor space nearest ground level and negatively impacts life on the street. So while they sometimes may be nice to look at from a distance and feed our ego's desire for a bitchin' skyline, high-rise warehouses for lobbyists, lawyers, special interests and their vehicles usually do nothing for me or for the life of the street.

High-rise residential projects, on the other hand, would be a blessing for generating a critical mass of downtown shoppers and users to make everything else work but that window of opportunity has passed, obviously, for the short-term. Even in this case though, parking is likely to suck up a lot of prime street front real estate.

[innov8]

La Valentina Station goes before the Design Commission tomorrow to develop
a mixed-use development comprising of 63 apartment units, seven live-work
units and approximately 2,500 square feet of ground floor retail/office space.

[econgrad]

Originally Posted by daverave

"The idea of preserving in a high value area, low value buildings will continue to bring us what we all complain about in this city: mediocrity."

Unfortunately, Econgrad, the trend in this city is for the high-rise construction to be very mediocre while the low-rise, rehab projects represent the better design. How many outstanding (or even non-mediocre) high-rise projects have ever been done here? I can list a bunch of fantastic rehab projects and virtually no good to great new high-rises. I'm a fan of the US Bank building and, to a lesser extent, the EPA building but they both have at least some faces at street level that are completely barren. The Fed Courthouse is a great looking building from a distance but it is a fortress where it counts at street level. Most of the high-rise government projects in this city are design garbage. And when you've got an Ed Kado designing projects like 500 CM, mediocrity is practically assured. That's why it was so exciting to anticipate a project like Aura with it's cutting edge design.

High rise projects also create the need for copious amounts of parking which sucks up a lot of the prime floor space nearest ground level and negatively impacts life on the street. So while they sometimes may be nice to look at from a distance and feed our ego's desire for a bitchin' skyline, high-rise warehouses for lobbyists, lawyers, special interests and their vehicles usually do nothing for me or for the life of the street.

High-rise residential projects, on the other hand, would be a blessing for generating a critical mass of downtown shoppers and users to make everything else work but that window of opportunity has passed, obviously, for the short-term. Even in this case though, parking is likely to suck up a lot of prime street front real estate.

Your thesis is true about our current rehabs vs current highrises. The parking argument I do not agree with. San Francisco is a car city, I lived there for 5 years. Parking does stink there yes, but people adapt and learn where to park. All the cars there do not cause large parking lots on the surface of the city as we can all see, underground parking lots galore and its just fine. Also, all the people who are going to chime in and disagree that SF is a car based city are wrong and probably never lived there. NYC is a true half and half city, not just because of the subway but also because of all the taxi cabs. It is unfortunate that we do not have highrise living as well, actually it may be more unfortunate than losing out on highrise office space, I agree with you on that too. I just see some Sacramentans being almost self defeatest and not asking for bigger and better, but just patching things up here and there, wow look a new bar (that will close in 2 years) or a new nightclub with a fancy name (which will change in a year). We need to attract large corporations that will employ large amounts of people and support our economy. We need the infrastructure for it. We can't live off a nightclub/restaurant based economy alone... Sacramento is not a vacation town.