Sacramento Proposal/Approval/Construction Thread - III

[snfenoc]

Originally Posted by ozone

Not surprised but neither am I really disappointed. I never cared for the design. When Downtown Sacramento does start to rise again I hope we'll have better designs than we've had in the past.

If Vanir is tenacious enough, I think this tower will get built, in some form or another. Of course, they'll probably use the David Taylor model - wait a long time and cheapen the building a bit.

[snfenoc]

Originally Posted by Deno

When is Marshall hotel project going to get started? That corner needs to be cleaned up.

That corner certainly needs some TLC. However, I think a solid date for the hotel's construction is up in the air, because the developer may want a subsidy.

I can't find the exact article, but I think it came out about 2 weeks ago in the SBJ: It focused on Mayor Steinberg's desire to spread $170 million (borrowed against future Transient Occupancy Tax revenue) among numerous projects. Originally, that money was only supposed to fund the Convention Center's expansion. Now, the mayor also wants an observation tower, an aquarium, an updated Old Town, and an Escalator to Nowhere. The article mentioned other possible destinations for the money, including the "Hyatt Centric" hotel on the Marshall site. It seems the developer is having trouble cobbling together enough money.

[urban_encounter]

Originally Posted by snfenoc

That corner certainly needs some TLC. However, I think a solid date for the hotel's construction is up in the air, because the developer may want a subsidy.

I can't find the exact article, but I think it came out about 2 weeks ago in the SBJ: It focused on Mayor Steinberg's desire to spread $170 million (borrowed against future Transient Occupancy Tax revenue) among numerous projects. Originally, that money was only supposed to fund the Convention Center's expansion. Now, the mayor also wants an observation tower, an aquarium, an updated Old Town, and an Escalator to Nowhere. The article mentioned other possible destinations for the money, including the "Hyatt Centric" hotel on the Marshall site. It seems the developer is having trouble cobbling together enough money.

The Sacramento City Council would be certifiably insane to start handing out subsidies post Golden 1 Center opening. It's time to start letting the market there determine whether new hotels are constructed or not.

[snfenoc]

Well, a selling point for the arena was that it would be a catalyst for further development. If surrounding proposals STILL require subsidies, I'd say it ain't a very strong one.

[Pistola916]

Proposal # 2 (below) is my favorite but we shall see if there is a market for high-end condos.




State to sell $2 million site for upscale condos overlooking Capitol Park

Read more here: http://www.sacbee.com/news/business/...#storylink=cpy

[snfenoc]

Originally Posted by Pistola916

Proposal # 2 (below) is my favorite but we shall see if there is a market for high-end condos.




State to sell $2 million site for upscale condos overlooking Capitol Park

Read more here: http://www.sacbee.com/news/business/...#storylink=cpy

Any of the proposals listed in that story would be a win for Sacramento. However, #2 is the clear winner in terms of looks, number of residences and retail. I'm not sure if the market can handle 76 high-end condos on top of the 45 that are near completion at DOCO. The first one on the list, which has fewer condos, might be more attainable. That said, I'm concerned that it won't make a difference in the number of residents; because I think will they have to demolish an existing apartment complex.

The third and fourth proposals on that list are plain and don't have a retail portion; I would like to see something that looks good and provides more street activation.

[CAGeoNerd]

That is a great spot for some infill and the project seems appropriately sized. Agreed that second one is the best design. Cross your fingers!

[ltsmotorsport]

I agree with you all on #2. Best programmed, best design, and that stretch of N Street could certainly use some activation from the retail. Let's hope the CADA board thinks like us.

[snfenoc]

#2 Has a good chance since Cresleigh Homes is the developer. It's pretty well-known company; and I think it probably has access to capital investment. I'm remain concerned about the number of high-end units; but that number could come down a bit and still make for a nice-looking mixed use project.

[snfenoc]

Not to belabor the point, but this is a pretty good read for those who wonder why Sacramento's skyline doesn't look like New York's. It is specific to hotels; however, I think the economic explanations translate to both office and residential.

New hotel could be a tough sell
April 6, 2017
By Mark Anderson
The Sacramento Business Journal
The city of Sa cramento may want a new downtown convention center hotel, but that doesn’t mean markets are ready to step in and build one.

http://www.bizjournals.com/sacrament...ough-sell.html

Takeaways from the article include:

- Sacramento's Average Room Rate is the HIGHEST it has ever been, but that's still less than HALF of San Francisco's.

- Sacramento cannot compete with the prices in coastal cities, which are ridiculous.

- A lot of travel to Sacramento is from government and state workers. They receive a much lower daily allowance than they do to coastal cities.

- Suburban Sacramento hotels have a better chance. They are usually 4 stories or less; therefore, they cost less than 3 times the price per room (of a downtown hotel) to build.

- Any big proposals will likely require a subsidy; and they will probably need to be high-end.

Basically, Sacramento is a Midwestern city that is getting held to coastal economic standards. Its prices will have to come way up, which means its affordability will go way down. If I am a business or pleasure traveler, why would I choose to stay in Sacramento for the same price as staying San Francisco?

[snfenoc]

Originally Posted by Pistola916

Proposal # 2 (below) is my favorite but we shall see if there is a market for high-end condos.




State to sell $2 million site for upscale condos overlooking Capitol Park

Read more here: http://www.sacbee.com/news/business/...#storylink=cpy

It looks like this proposal from Cresleigh Homes is the winning submission for 14th and N Streets. According to the SBJ, it has to do with the company's finances. This is good news to me. Let's hope it gets built!

Sadly, a 30-unit CADA apartment complex will be demolished to make room. While the current residents will be relocated to other CADA apartments, this goes to show that Sacramento is getting less and less affordable.

[ltsmotorsport]

Good news all around on the selected project. I agree though with the new building taking the place of the older building/units though, and it would be nice to see where the money goes from the sale of this land; updating existing units or maybe going towards the proposed project at 17th and S?

[kamehameha]

CIM Group interested in building a 40 story highrise at 301 Capitol Mall

http://www.bizjournals.com/sacrament...-40-story.html

[CAGeoNerd]

Originally Posted by kamehameha

CIM Group interested in building a 40 story highrise at 301 Capitol Mall

http://www.bizjournals.com/sacrament...-40-story.html

Though I find the vagueness and length of that "article" teasing.

[snfenoc]

Originally Posted by kamehameha

CIM Group interested in building a 40 story highrise at 301 Capitol Mall

http://www.bizjournals.com/sacrament...-40-story.html

It's nice to know that the property is still on everyone's radar. It helps that CalPERS owns the site. (Maybe they can provide some financial backing?) Additionally, CIM is a pretty good developer to have.

Unfortunately, office rents need to rise about 20%+ before building new is feasible. Additionally, the Vanir tower proposal is a bit farther ahead with at least one major tenant (Vanir); it's also quite a bit smaller and probably cheaper. Attempts to attract relocating businesses have not gone well (at least for Class A office space); but maybe we need to double our efforts. Without more demand or seeing construction costs come way down (that'll be the day), we could be waiting a long time.

[urban_encounter]

Not sure what CIM is thinking?? But at the risk of sounding like a broken record:

1) There's no market for high rise class A office space currently that would make this pencil out. The state requires larger floor plates so a new state leased high rise is unlikely.

2) There's no established market for high rise residential condos in Sacramento at the price point they would likely need, in order to help this pencil out.

3) The condos in the Sawyer still need to show strong sales to demonstrate a demand for residential high rise (mid rise) living.

4) Unless CIM is planning a really big parking garage to siphon off day and evening (G1C) parking from nearby lots???

[CAGeoNerd]

Originally Posted by urban_encounter

Not sure what CIM is thinking?? But at the risk of sounding like a broken record:

1) There's no market for high rise class A office space currently that would make this pencil out. The state requires larger floor plates so a new state leased high rise is unlikely.

2) There's no established market for high rise residential condos in Sacramento at the price point they would likely need, in order to help this pencil out.

3) The condos in the Sawyer still need to show strong sales to demonstrate a demand for residential high rise (mid rise) living.

4) Unless CIM is planning a really big parking garage to siphon off day and evening (G1C) parking from nearby lots???

But why? If they were able to propose two huge towers on this site and supposedly sold a bunch of units in it only to have the economy/housing collapse pull out the rug, why can't they do so now??

[kamehameha]

Propose a mixed-used development for the 40 story highrise. Do a parking, retail, apartment and condotel combo. A lot of the completed and under construction buildings here in San Francisco are mixed-used. Case in point is the new Transbay terminal building(1070 ft). the last five stories will be wedding/party venues and obseration platform. I pass infront of that building everyday.

[urban_encounter]

Originally Posted by CAGeoNerd

But why? If they were able to propose two huge towers on this site and supposedly sold a bunch of units in it only to have the economy/housing collapse pull out the rug, why can't they do so now??

I understand the sentiment of what you're saying but the Saca "Towers" and Craig Nassi's "Aura" were failed ventures. If they had been built then Sacramento's skyline would have dramatically changed, because it would have demonstrated to lending institutions that these kinds of projects could be financially viable in Sacramento, just as much as they are in Portland or Austin (or pick your second tier market). I believe it was Deutsche Bank in consultation with CalPERS that pulled the rug out from under Saca partly because of rapidly rising construction costs and the turning economy.

But as others have pointed out Sacramento's construction costs mirror those of LA, SF and San Diego but the price that developers can charge in Sacramento for a residential unit is only a fraction of those markets. Developers can still squeeze high rises into those markets and earn more money than they can in Sacramento. It would take a local developer with motivation (like John Saca) but with more resources and experience to deliver one of these projects.

Cal PERS and CIM definitely have the resources and expertise to pull off a large mixed use project but Cal PERS is in business to maximize profits of Cal PERS members and not simply for the sake of developing Sacramento's skyline.

[kamehameha]

Another mid-rise proposal. this is all we can do for now, no high-rise all mid-rises.

http://www.bizjournals.com/sacrament...te-near-r.html