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Friday, February 10, 2012
K Street developers endorsed
by Suzanne Hurt, published on June 17, 2010 at 10:20 PM
Storyline: K Street Mall
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The Sacramento City Council is scheduled next month to pick the developers who will take on the challenge of rebuilding two blighted blocks of K Street Mall.
A selection committee created by the city has tapped two teams. D & S Development, Inc., and CFY Development, Inc. — led by Cyrus Youssefi — is being recommended to redevelop the 700 block. The group 700-800 K Street, LLC — led by Sacramento developer David Taylor and Z Gallerie owner Joe Zeiden — is being recommended to take on the 800 block, said Beth Tincher, a senior project manager with the city's Economic Development Department.
The Downtown Sacramento Partnership endorsed those selections at a board meeting last week. The two development teams were backed over two others primarily because they had the most secure financing and could start the mixed-use projects the fastest, said DSP Executive Director Michael Ault.
"We heard all four proposals and honestly would tell you we'd be lucky to have any of the proposals," he said. "We did think the two proposals that were identified would be good, solid projects and could move forward pretty quickly."
The proposal for the 700 block focuses on restoring historic storefronts, developing smaller retail spaces in front and creating alley-front housing and a garage in back. A locally operated live music venue would be planned for the historic building that housed a Men's Wearhouse store.
D & S and CFY strengthened their proposal by concentrating on just one block and arranging financial backing. They obtained a commitment letter for a $28 million construction loan from Chase Bank and provided evidence of the availability of equity funds, said D & S Development spokesman Bay Miry.
"While the project needs to be unique and exciting in its vision, equally important is the project's doability and strength," he said. If the council approved their selection, Miry estimated their project could start about six months later, once entitlements and permits were obtained, and be completed in 18 months, which would be about July 2012.
The selection committee included people from the Sacramento Housing and Redevelopment Agency, the Urban Land Institute, a San Diego redevelopment agency and a professional experienced with redevelopment projects.
However, an ad hoc team made up of Mayor Kevin Johnson and three City Council members, including Steve Cohn and Ray Tretheway, is now also reviewing the four proposals.
The largest proposal came from a team led by Rubicon Partners Inc. and its co-founder Kipp Blewett, who, as DSP chairman, recused himself from weighing in on the proposals at last week's board meeting. Encompassing both blocks, the Rubicon plan would create 100,000 square feet of retail, a 35,000-square foot farmers' market, a 2,000-seat entertainment venue and an artisan alley with live-work walkups for artists.
A council vote has been set for July 13 once city staff make their recommendation, which will be made public the week before. A staff report will outline the list of criteria used in the process, Tincher said.
Getting "doable" projects started soon would benefit the city by enticing other investment, Miry said.
"I think they'd be a catalyst for more projects to happen and help create a renaissance on K Street," he said.
Photos by Suzanne Hurt, a staff reporter covering business and development for The Sacramento Press.
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Dropping and even subsidizing the rents of long dormant space to below market rates, to reuse existiing infrastructure without the massive amendment proposed, inviting communities of interest, like the artists and the homeless and business incubators to pitch their aspirations here as these potential small firms attempt to take root, will result in longer term survival as a community, with all the benefits community entails....
Plopping yet another contrivance fashioned from the 'planner/developer' mindset, will result in the fakery that has plagued this poor street for nearly five decades... and place far too many public dollars in the hands of this select group of bourgeois Babbitty little snobs who have all the community sentiment of ...well... Babbitt...
Whence one David Taylor, who gutted Julia Morgan's stunning Public Market for a bar -- a tasteful bar, but a bar nonetheless, and then plopped that Kleenex box of a hotel next door... THIS is not a good thing....
Half the project is going to the same team that did 14th & R, and struck gold by basing the retail choices on local and unique businesses. Their plan keeps the rents low by fixing up the existing buildings instead of expensive new construction. The other half, and probably the more difficult half, is in the hands of a developer who may not be known for "starchitect" quality design, but has a proven track record of actually being able to build what he says he is going to build. The plan will add several hundred residential units to K Street--including low-income, workforce, and market-rate.
Go back and look at the other projects--this choice is the most fiscally prudent, by the developers with the best track record, and can be done in the shortest amount of time.
I would argue the 'fiscally prudent' part -- perhaps given the amounts spent before on such design don'ts, it may very well be.
It's unfortunate that a plan couldn't have been worked out organically, for a variety of reasons, not the least of which was a profoundly uncooperative parcel owner, along with the passage of time and the increased costs dictated by it, to reuse as much as possible of the sturdy stock of space available on the block, and to minimize new construction as much as possible. Perhaps if this alternative had been conceived earlier, say, oh, about three decades ago, when Portland's natural cuteness was first being contemplated, the fear of these contrived solutions might have been avoided.
I hope it works... but I have my doubts...
And David Taylor -- yes, he gets 'em built, but look what schlock he's erected.. Blah, blah, blah.... I know I'm going to pay for that little remark...
But that hotel is an abomination.
It's unfortunate however that a more organic thing didn't develop over the years, even despite Mohanna's obfuscation... I hope the new plan works, whichever one is selected -- but I fear it won't.
this story will repeat itself again and again.
K Street should be left to the free market - the taxpayers have been fleeced enough already.
This is how the free market works - the buildings are vacant - property values drop - investors buy them when they feel the prices have dropped enough - they rent them out or put their own businesses in them.
The prices have been artificially inflated for decades due to SHRA and the City's meddling.
Were you aware Burg that most of the vacant buildings on K street are vacant because SHRA took them at gunpoint through eminent domain or bought them and boarded them up?
Yes, I'm aware that the 700 block and the Bel-Vue are vacant because the city took the buildings and boarded them up. I used to shop at those stores. But the previous owner had let them deteriorate for decades, and his plan was always to continue watching them deteriorate until he could build his own high-rise on the land.
Waiting for the prices to drop is a useless strategy, because the buildings are not in a vacuum--they are located on real estate that is inherently expensive due to its location next to state buildings. In order to, as you suggest, wait for prices to drop, we would have to wait until the value of the neighborhood itself dropped--which would mean that the state offices and private office buildings around it were being abandoned. This means that letting K Street continue to decay and doing nothing about for decades IS, in many ways, the 'free-market' strategy. The 'free market' solution is based on the idea that you never have to clean up a mess, you just go somewhere else. We can see the effects of that strategy in the Gulf of Mexico.