Tag Cloud
Friday, February 10, 2012
8th and K hotel plan dropped
by Suzanne Hurt, published on December 8, 2009 at 10:53 PM
Storyline: K Street Mall
Loading images
Developer Bob Leach withdrew his proposal Tuesday to build a hotel on K Street Mall after financing — including public bond financing from the city — fell through.
The city of Sacramento's Redevelopment Agency now must go back to the drawing board by requesting other proposals for the property at 8th and K streets, as well as adjacent property in the 800 block of L Street.
"He pulled the plug," Sacramento City Councilmember Kevin McCarty said following Tuesday's City Council meeting.
The developers were asking the city to contribute more than $18 million in land and nearly $15 million in tax rebates toward the project.
"The city is not in a position to bond to provide permanent financing for the hotel," according to a city staff report. The item was withdrawn from the council agenda without discussion.
In 2008, the Redevelopment Agency had entered into exclusive right-to-negotiate agreements with USA Hospitality Inc., as part of a settlement with developer Moe Mohanna and other primary owners of the 700 and 800 blocks of K Street.
Development partners Bob Leach of USA Hospitality Inc. and Parkcrest Development, along with equity partner Mohanna, initially proposed building a 400-room Marriott Renaissance hotel at the southeast corner of 8th and K streets and a mixed-use project dominated by a 372-space garage on the adjacent northwest corner of 8th and L streets. The historic Bel-Vue Apartments, a city landmark built in 1910, is one of the buildings occupying that corner.
On Nov. 20, USA Hospitality submitted a new proposal to build a 300-room hotel, an adjacent 350-space garage and 100 condos above the garage in a second phase.
The developers had until Nov. 23 to get "stronger" financial commitments from lenders and investors; determine the cost to preserve the facade of the Bel-Vue; and complete business negotiations so those can be included in the development agreement. Those requirements were not met, according to the city staff report.
The South Korean company Consus Asset Management recently indicated it was willing to make a $91 million investment commitment as long as the developers got a loan from a bank that met Consus' requirements or the city agreed to provide the financing through municipal bonds. However, the developers weren't able to arrange such financing.
Leach, who built Le Rivage Hotel on the Sacramento River waterfront, submitted a letter withdrawing the project shortly before the City Council was to consider the agency's request to move forward and consider other proposals, confirmed City Councilmember Sandy Sheedy.
The city will be seeking qualified potential developers by Feb. 12.
Photos by Suzanne Hurt, a staff reporter for The Sacramento Press.
Conversation Express your views,
debate, and be heard with those in your area closest
to the issue.
Leave a Comment
Frankly, some of these buildings would make great studio apartments and/or bed&breakfast inns, or just plain offices, since the area wouldn't actually be a pleasant permanent housing experience.
I rather like that they're relatively low rise and human scale, rather than the more intensive high rise use intended by Leach, et al...
As to scale, downtown is just the right place for contrasts. I'd be fine with a great big skyscraper on 8th & K right next to the Bel-Vue, I'd just rather see the old buildings in the mix. They add a character and sense of place that new buildings can't, and there are so few of them left after the redevelopment era.
Perhaps artists' lofts or other urban housing use might make a suitable if a bit trendy use...
Frankly I do not care for a mix of low rise and extreme high rise buildings -- I believe the proposed hotel was to be 40+ stories... Even Manhattan's massing ordinances don't allow this anymore... A low-rise / mid-rise (10 - 20 floors) could be designed with a nod toward human scale and sight lines that don't challenge the passers by into submission...
Will SHRA take the bait and do so, in the absence of private investment capital, especially without the profit pull of transient occupancy???
Anyhow, kudos to Suzanne for her continuous reporting excellence.
C'mon, Bill.... I suppose sarcasm really doesn't come across as good in print.
Anyboot, I must agree with you. I don't see the demand for 400 new hotel rooms either. The city should continue concentrating on attracting people downtown, before doling out land and tax breaks to help put them up.
There is some demand for increased hotel capacity downtown, especially if Sacramento can capitalize on its local tourism assets (many of which currently crumbling and going to waste.) But there's a better plan in the works for 10th and K--a smaller hotel, about 200 rooms, which is more in line with our needs, lighter on the city's purse, and doesn't require the demolition of any city landmarks at all.
The term "artist's lofts" is a loaded one, it implies that there are artists who an afford top-dollar downtown rents...but generally "artist's lofts" means a cheap warehouse space somewhere inexpensive. The Bel-Vue is just an apartment building, my radically weird idea is the unimaginably difficult conversion of an apartment building with a restaurant in the ground floor to...an apartment building with a restaurant in the ground floor. When it becomes more economically feasible to do so, they could build, maybe, a 250 foot tall apartment building next door, with retail on the ground floor.
It seems like any practical plan for the rest of the site won't appear for a while...but the restoration and habitation of the Bel-Vue could be started immediately. Redevelopment funds to restore the building would cost a lot less than new construction, and there are preservation programs to incentivize the repair and reuse of the building. All the city has to do is implement a state program called the Mills Act.