Sacramento: 301 Capitol Mall: A New Plan for The Towers Site

[urban_encounter]

Originally Posted by Phillip

If 50% of the units have deposits and 100% of those purchasers sign the addendum what is the next step after that?

Construction.....

[foxmtbr]

Originally Posted by innov8

I personally got this message from the sales office...

They have a new equity partner who wants some of his own condos, but he wants them higher than 54 floors, so they heightened both towers to 100 floors to appease him?

[mechanico]

I expect one thing and hope for another.

[sugit]

Here it is.........

Saca buys out CalPERS stake in Towers project
http://sacramento.bizjournals.com/sa...ml?jst=b_ln_hl

Developer John Saca has bought out California Public Employees' Retirement System's interest in the Towers on Capitol Mall skyscraper project, allowing him to retain ownership and search for other partners, Saca said Monday.

Terms were not disclosed.

The move may allow the project to move forward if additional financing can be found to cover increased construction costs and to replace CalPERS' $100 million contribution. Although CalPERS did not disclose its financial involvement to date, sources familiar with the project had previously said it had contributed $25 million before work stopped in January.

The two sides butted heads on how to proceed under overruns estimated at least $70 million. Saca said they had reached an "amicable settlement."

The split comes a year after the pension giant announced its intention to invest in the condo towers, with officials calling it "a good investment." Saca called the partnership "a perfect match" at the time.

The relationship soured, though, after it became apparent that the original budget of $500 million wouldn't be enough to build The Towers. Personnel changes at CalPERS may also have played a role -- a strong backer of the project, Mike McCook, left the role of senior real estate investment adviser.

The foundation has yet to be poured and The Towers already owes about $35 million in loans to contractors for work already done. Unpaid contractors have filed liens and lawsuits against the project.

Real estate investor Joe Mohamed purchased the $22 million loan from First Bank that the Towers partnership used to purchase the land on Capitol Mall.

Saca said Monday he is working with Mohamed to pay off the loan or extend it.

Saca said he hoped to be able to pay remaining debts within a few weeks.

"We are working hard to bring in another partner and hope to have a new deal announced within a week or so," Saca said in a news release.

Saca said more than 250 condo buyers have signed agreements that extend deadlines for completion of the project.

"CalPERS has been fair and reasonable coming to this settlement," Saca said. "Neither party foresaw the significant changes in circumstances that have affected this project."

"Over the last several months, I have been inspired and humbled by the hundreds of supportive phone calls and e-mails from citizens all over the Sacramento area," Saca wrote. "They believe in this project; our buyers believe in this project."

The Towers consists of two 53-story towers with 800 condo units and a 230-room InterContinental Hotel.

[ltsmotorsport]

Good to hear confirmation that CalPers is out. Hopefully it will be within a week for news about a new partner.

[sugit]

I am still concerned about more cost increases though. If it was 70M over budget a few months ago, it could be more by now. There was an article a little while ago about him locking in some contracts, but I'm not sure if that is still the case

[innov8]

Alright! We should hear some more great news in the next week or two

Things will have to get going really soon here… the new addendum has a start
date of August 31, 2007 and two years out from this date Saca will have to
meet his side of the agreement.

[innov8]

Dear Future Homeowners,

As we have previously informed you, exciting things are happening at The Towers and here are a few announcements that will be released to the media shortly. We wanted you to be the first to hear the news. The response to our addendum request has been very strong and we look forward to hearing from the rest of you in the very near future.

Towers on Capitol Mall Agreement Reached


April 16, 2007

Sacramento Developer John Saca and CalPERS have reached an amicable settlement regarding their ownership interests in the 2.1 Million Square Foot Towers on Capitol Mall Project. The parties have executed an agreement whereby Saca will be purchasing the interest of CalPERS, Saca has made a sizable deposit toward the purchase, the deal will close on or before May 25 th. The parties will not disclose the details of the settlement.

Statement by John Saca:
"I am very excited about this agreement, CalPERS has been fair and reasonable coming to this settlement. Neither party foresaw the significant changes in circumstances that have affected this project. This agreement makes it possible for the project to move forward and we hope to make an announcement in the near future regarding our acquisition of a new development team. I would like to personally thank all those at CalPERS who have made this agreement possible."
Says Saca, "I want to fulfill the commitments I made to the buyers, contractors and the entire Sacramento community. The Towers is the most significant private project in the region."

Saca is very confident that he has the support necessary to proceed.

"Over the last several months, I have been inspired and humbled by the hundreds of supportive phone calls and emails from citizens all over the Sacramento area. They believe in this project; our buyers believe in this project. The Towers is critical to the future of the city of Sacramento . It's a world class project for a world class city."

Saca's project consists of two 54 floor, 615 foot tall towers anchoring Capitol Mall, just east of the Tower Bridge. There are approximately 800 condominium units divided between the two towers, which will also be home to the Intercontinental Hotel.

As of this writing, approximately half of the condominium units have been pre-sold. "I'm pleased that so many buyers have continued to put their faith in this project. They're not going to regret it", says Saca.

In addition to becoming the tallest residential buildings on the West Coast, Saca envisions the Towers as a retail dynamo with the one-two punch of the five star hotel and premier shopping.

"The Towers will be the place to live in Downtown Sacramento. Moreover, completion of this project will open the doors to future Downtown high-rise developments. The Towers is the tip of the iceberg", says Saca.

[snufalufugus]

2 concerns:

1. According to the Sacbee, Saca has until May 25 to come up with about $25 million needed to reimburse CalPERS for the money it had spent on the project before construction stalled earlier this year. So Capers isn't 100% out of the picture yet. Let's hope Saca gets another equity partner in time so he can pay off CalPERS.


2. The price tag of this project has ballooned from about $370 Million to $550 Million now. I hope this project is still financially attractive enough for another equity partner to step in.



Here's the article in the SacBee today:

Deal may clear way for 53-story towers
By Mary Lynne Vellinga - Bee Staff Writer
Published 3:40 pm PDT Monday, April 16, 2007

Developer John Saca Monday said he has reached an agreement to buy out the California Public Employees' Retirement System as an investor in his downtown high rise condominium and hotel project -- potentially clearing the way for construction to resume on the two 53-story towers.

Saca has until May 25 to come up with about $25 million needed to reimburse CalPERS for the money it had spent on the project before construction stalled earlier this year. He is also searching for other investors to step in to help finance the project, whose budget ballooned from about $370 million to $550 million.

CalPERS spokeswoman Pat Macht said Saca had put down a non-refundable deposit of $1.25 million as part of the agreement to buy out the pension fund giant.

"Mr. Saca has said before that perhaps CalPERS may not be the best partner for the type of project he wants to pursue," Macht said. "We certainly don't want to stand in the way of allowing him that opportunity. So we have agreed to settle with him and allow him the opportunity to seek other partners and buy us out. Hopefully he will return to CalPERS to complete the settlement by May 25."

[rivertownpj]

Dear Future Homeowners,

As we have previously informed you, exciting things are happening at The Towers and here are a few announcements that will be released to the media shortly. We wanted you to be the first to hear the news. The response to our addendum request has been very strong and we look forward to hearing from the rest of you in the very near future.

Towers on Capitol Mall Agreement Reached

April 16, 2007


Sacramento Developer John Saca and CalPERS have reached an amicable settlement regarding their ownership interests in the 2.1 Million Square Foot Towers on Capitol Mall Project. The parties have executed an agreement whereby Saca will be purchasing the interest of CalPERS, Saca has made a sizable deposit toward the purchase, the deal will close on or before May 25th. The parties will not disclose the details of the settlement.

Statement by John Saca:
“I am very excited about this agreement, CalPERS has been fair and reasonable coming to this settlement. Neither party foresaw the significant changes in circumstances that have affected this project. This agreement makes it possible for the project to move forward and we hope to make an announcement in the near future regarding our acquisition of a new development team. I would like to personally thank all those at CalPERS who have made this agreement possible.”
Says Saca, “I want to fulfill the commitments I made to the buyers, contractors and the entire Sacramento community. The Towers is the most significant private project in the region.”

Saca is very confident that he has the support necessary to proceed.

“Over the last several months, I have been inspired and humbled by the hundreds of supportive phone calls and emails from citizens all over the Sacramento area. They believe in this project; our buyers believe in this project. The Towers is critical to the future of the city of Sacramento . It’s a world class project for a world class city.”

Saca’s project consists of two 54 floor, 615 foot tall towers anchoring Capitol Mall, just east of the Tower Bridge. There are approximately 800 condominium units divided between the two towers, which will also be home to the Intercontinental Hotel.

As of this writing, approximately half of the condominium units have been pre-sold. “I’m pleased that so many buyers have continued to put their faith in this project. They’re not going to regret it”, says Saca.

In addition to becoming the tallest residential buildings on the West Coast, Saca envisions the Towers as a retail dynamo with the one-two punch of the five star hotel and premier shopping.

“The Towers will be the place to live in Downtown Sacramento. Moreover, completion of this project will open the doors to future Downtown high-rise developments. The Towers is the tip of the iceberg”, says Saca.

[greenmidtown]

Statement by John Saca:
“we hope to make an announcement in the near future regarding our acquisition of a new development team."

sounds good!
I can't wait for construction to start back up...I suspect it won't be long!

[greenmidtown]

a little more info.

Saca plans a project buyout
The CalPERS deal will let his stalled Towers go forward, the developer says.
By Mary Lynne Vellinga - Bee Staff Writer
Last Updated 12:50 am PDT Tuesday, April 17, 2007
Story appeared in METRO section, Page B1

Print | E-Mail | Comments (11)

Developer John Saca said Monday he has reached an agreement to buy out the California Public Employees' Retirement System, the largest investor in his stalled high-rise condominium project at the end of Sacramento's Capitol Mall.

Saca said the deal will allow him to move forward with his project, The Towers, provided he can come up with about $25 million by May 25 to reimburse the state pension fund for money it has already spent.

The developer also needs to secure commitments from other investors and lenders willing to supply about $550 million needed to build the two 53-story towers.

Deutsche Bank had agreed to lend Saca up to $400 million to build his project, but that deal was predicated on Cal-PERS' involvement, he said. The developer will have to either renegotiate the terms or find another lender.

"We've got a short period to put together the money," said Saca. Still, the developer expressed confidence that the biggest hurdle to his success had been removed.

"The big thing has been the battle between CalPERS and I," he said. "Obviously we want to go forward with the project, which they didn't want to do."

Sacramento City Manager Ray Kerridge Monday said he's encouraged by Saca's agreement with CalPERS. "I think it's looking pretty good," he said.

The city of Sacramento has agreed to subsidize the hotel portion of the project with an $11 million grant that can be used for furnishings and fixtures once the buildings are complete.

Saca put down a non-refundable deposit of $1.25 million with CalPERS as earnest money on the settlement, said pension fund spokeswoman Pat Macht.

"Mr. Saca has said before that perhaps CalPERS may not be the best partner for the type of project he wants to pursue," Macht said.

"We certainly don't want to stand in the way of allowing him that opportunity.

"So we have agreed to settle with him and allow him the chance to seek other partners and buy us out. Hopefully he will return to CalPERS to close this settlement by May 25. If he doesn't, then we'll cross that bridge when we come to it."

Construction on The Towers stopped in January after Cal-PERS, which had pledged $100 million, declined to put any more money into the project, which was running about $70 million over budget.

Saca blamed the rising cost of construction materials for the budget increase.

Various contractors working on the site have filed liens totaling about $13 million.

In February, after his falling out with CalPERS, Saca defaulted on the loan he used to buy the prime piece of real estate at Third Street and Capitol Mall.

Despite the housing market slump, the developer enjoys strong support among many of his buyers, among them some of Sacramento's wealthiest residents.

Saca's father, Tony Saca, is the founder of the Filco appliance chain, and the family is well-known for its annual charity ball.

Saca's buyer list includes Joseph Mohamed Sr., the Sacramento real estate investor who in February bought his $22 million first mortgage on the Capitol Mall property from First Bank & Trust.

Saca said he knows Mohamed socially but had no advance knowledge that he was going to buy the note.

"We've been at charity events at his house, and he's been at charity events at our house," Saca said.

"Sacramento is a small community. We're negotiating with him, and hopefully we'll get something resolved by the end of the week. We'll either just pay him off or get an extension."

Saca said Mohamed had purchased "several" units in the The Towers.

Mohamed filed a notice of default -- the first step in the foreclosure process -- in February. But Monday he said he wants to see Saca succeed. "We'd very much like to see the units built," he said. "I think everyone who bought in there feels the same way.

"I'll do whatever we can to help him do it, too," Mohamed added.

Nearly 400 people had purchased units in The Towers. Saca said about 80 percent of them have agreed to his recent request that they reset the effective date of their purchase contracts to give him more time to finish the project.

Saca said he is reevaluating The Towers to see whether it makes sense to change certain components to make the project more appealing to lenders and investors.

The Intercontinental Hotel, now slated to contain 227 rooms, could be expanded, he suggested.

"We're not going to make any drastic changes like making it 40 stories rather than 50," he said.

[What is a Rivercat?]

Bee reader comments on this article:

desdemona5 at 6:12 AM PST Tuesday, April 17, 2007 wrote:

Thank You CalPERS!!!

This project is a dog; thank you for getting out before that $25M down the drain became $400M. State retirement money can be invested in many better ways than with this joker.

Thank you for seeing the light!


sambo at 7:17 AM PST Tuesday, April 17, 2007 wrote:

Sacramento would be much better without this monstrosity. Hopefully the investors Saca is counting on feel the same way.

Ugly, unnecessary, and a visual reminder of NYC - all that's missing is the planes. Sick design by sick minds.


c_vanderveen at 7:41 AM PST Tuesday, April 17, 2007 wrote:

I feel sorry for people like this

Sambo, desdemona5, you two typify what is wrong with Sacramento - fearful of change and blind to any vision. I pity you



desdemona5 at 8:06 AM PST Tuesday, April 17, 2007 wrote:

I pity the fool...

...who buys into some losers "vision" with $400M of someone else's money. How many of these "visionary" units have you put a deposit on, c_vanderveen?

Go dream on your own dime.


lilcuci at 8:16 AM PST Tuesday, April 17, 2007 wrote:

When this project is built it will be a Sacramento landmark.



robertemily at 8:31 AM PST Tuesday, April 17, 2007 wrote:

11 million dollars

Why is Sacramento giving 11 million dollars to a rich business man, for furnishings and fixtures for his hotel, but told another rich business man no, you can't have public money to build an arena? Why don't we get to vote on the 11 million dollars?


williaminsd at 8:38 AM PST Tuesday, April 17, 2007 wrote:

As usual...

Typical Bee readers rejoice at someone else's difficulties. How pathetic. Do any of you realize how much money this project will pour into city coffers? Do any of you realize what effect having luxury housing has on a downtown? (Hint:it's all good). The high taxes on luxury housing allows you to finance all of the things so many of you claim you want like low-income housing, museums and parks. Without these kinds of projects, that money goes to Placer or El Dorado counties to finance their parks. Is that what you want? The $11 mil. for the hotel is a LOAN to be paid back at market rates. The TOT from this pays for services all Sacramentans will enjoy. Get it? Visitors will help pay for things YOU will use. Too many of you still see Sacramento as nothing more than a gas stop on the way to Tahoe. It's becoming a destination on it's own. Projects like this take advantage of that to your benefit. Calpers lost its nerve because it has to answer to state workers. Saca hasn't - that's Good


c_vanderveen at 8:43 AM PST Tuesday, April 17, 2007 wrote:

I swear

Some of the readers here won't be happy until Sacramento is nothing buy drab gray Soviet-style office buildings. If you people love socialism so much Cuba isn't THAT far away.


VoiceofReason at 8:52 AM PST Tuesday, April 17, 2007 wrote:

Small minded people

People, would you rather have a hole in the ground at capitol mall or a landmark building? All of the little people who are bad mouthing this project do not understand how complicated it is to build 50 story buildings. There is not a $100 million construction project that has ever been built that has not had it's share of problems. Delays like this come with the territory. Sacramento is growing up, either accept that fact or move to Chico.


flttrgrl at 8:53 AM PST Tuesday, April 17, 2007 wrote:

Everyone benefits

It is not unusual for the city to kick in loans to help hotel projects. They did the same thing with the Sheraton. It is an investment in future tax dollars. It is not a subsidy. And even rich people have to have investors and get loans, especially when a project is this ambitious.

Downtown (and the whole area) is growing, and that piece of land is a great place to put high density housing and a hotel. It makes a lot of use out of a small place. All of the "fools" who are buying in will have stellar views of the river and high property values (that they will pay taxes on). They will also be able to walk to work, which is great for the suburbanites who complain about traffic. The hotel will bring in people to eat in our restaurants and shop in our stores.

I would rather see the city kick in money on this than continue to approve building in areas with a high flood risk and increase the sprawl. This project is good for Sacramento.


pmelon at 9:01 AM PST Tuesday, April 17, 2007 wrote:

The visionaries and risk takers take the fearful and simple on their backs. No doubt all these people who are against everything will find something else to complain about when they are spending their money in the new and revitalized downtown Sacramento.

[Nawlijispower]

desdemona5 at 6:12 AM PST Tuesday, April 17, 2007 wrote:

Thank You CalPERS!!!

This project is a dog; thank you for getting out before that $25M down the drain became $400M. State retirement money can be invested in many better ways than with this joker.

Thank you for seeing the light!


sambo at 7:17 AM PST Tuesday, April 17, 2007 wrote:

Sacramento would be much better without this monstrosity. Hopefully the investors Saca is counting on feel the same way.

Ugly, unnecessary, and a visual reminder of NYC - all that's missing is the planes. Sick design by sick minds.



I swear these guys are idiots!!!
What is wrong with these people??!! Do they grow on trees around here?

[TowerDistrict]

i'm glad the former-forumer, william got his piece in though. cheer to him.

edit... they just added my comment. spoke to soon, in typical Bee Commenter fashion

[Sacto]

Originally Posted by Nawlijispower

desdemona5 at 6:12 AM PST Tuesday, April 17, 2007 wrote:

Thank You CalPERS!!!

This project is a dog; thank you for getting out before that $25M down the drain became $400M. State retirement money can be invested in many better ways than with this joker.

Thank you for seeing the light!


sambo at 7:17 AM PST Tuesday, April 17, 2007 wrote:

Sacramento would be much better without this monstrosity. Hopefully the investors Saca is counting on feel the same way.

Ugly, unnecessary, and a visual reminder of NYC - all that's missing is the planes. Sick design by sick minds.

WOW! Are you serious?!?

[enigma99a]

Originally Posted by Sacto

WOW! Are you serious?!?

I think a couple of McMansions would have been the best idea for 301CM!

[futurearchie317]

All that's missing is the planes?

That is probably the most offensive comment I've heard in recent memory. And I am not someone to ever get offended...my favorite comedian is george carlin for fuck's sake. Wow. Just wow. Anyway viva la towers!

[ozone]

sambo's right on Sacramento would be much better without this ugly, unnecessary, monstrosity..we don't need people with higher incomes mix'n with the hobos and crackheads. It's will take away from the totally convincing Old West ambiance of Old Sacramento. And it will menace the downtown shopping mall....and ... a visual reminder of NYC - all that's missing is the planes. err..who has the sick mind?

[aufbau]

^On top of it being a disgusting comment, it also shows how little your average sacbee reader visits other cities or even our own downtown, which sports a pair of (short) twin buildings; It's a common layout...