Newest articles on The Sacramento Press tagged as "mohanna"

800 K/L-Belvue Demolition Plan Returns To City Council

2009-08-24T18:59:58Z

On Tuesday, August 25, the Sacramento City Council will hear a proposal by developers Bob Leach and Parkcrest Development to build a hotel at the corner of 8th and K Street and a parking structure at the corner of 8th and L Street, a project that would require demolition of city landmark the Bel-Vue Apartments and adjacent buildings. The meeting will be held at New City Hall, 915 I Street, at 6:00 PM in the main City Council chambers.

The item was originally to be heard at the August 11 meeting of the City Council (see sacramentopress.com/headline/11884/City_to_decide_on_fate_of_BelVue_Apartments_and_Berry_Hotel_today ) but was taken off the agenda at the last minute. According to the staff report, the "Exclusive Right to Negotiate" between the city of Sacramento and the developers expired on Sunday, August 23, but city staff can still work with the development group while a new RFQ (Request for Qualifications) is being prepared, a process that should take about 90 days according to the staff report. If city staff and developers cannot reach an agreement, the new RFQ will request proposals from other developers and development groups for a different project on the 800 K Street site.

Also according to the staff report, city staff had not fully analyzed the new proposal as of its submittal date of Friday, August 21, and could not provide complete comment. One change from previous proposals is a change to requested exemption from the hotel's "Transient Occupancy Tax": instead of 100% exemption from TOT for 10 years, they are asking for 50% exemption for 14 years. According to the accompanying financial documents, this would add up to approximately the same total subsidy for the project, but over a different span of time.

Another change is that Mohammed "Mo" Mohanna is no longer listed as a member of the development team. The staff report does not specify whether another investor has joined the team in Mohanna's place, or whether one of the existing investors will contribute more funds to make up for Mohanna's financial contribution to the project, or why this change has taken place. Most of the financial commitment comes from the Korean firm Consus, but the city has not yet received a formal commitment with complete terms and conditions from Consus.

The staff report does mention that the original "Exclusive Right to Negotiate" for this project occurred as a condition of a lawsuit settlement between the city of Sacramento and Mohanna, in addition to the city's payment of about $18 million to Mohanna for the land.

The total subsidy for the project is estimated at $31.5 million in land and tax exemption (both transient occupancy tax and tax-increment fund exemption.) This amount does not include the money previously paid to Mohanna for the property as a result of the lawsuit settlement.

The staff report does not address the issue of a potentially competing hotel project planned for the corner of 10th and K Street, nor does it address the issue of the demolition of the Bel-Vue landmark.

The staff report for this item can be found here:

sacramento.granicus.com/MetaViewer.php

The agenda for this week's City Council meeting can be found here:

sacramento.granicus.com/ViewPublisher.php

City to decide on fate of Bel-Vue Apartments and Berry Hotel today

2009-08-11T08:36:49Z

On Tuesday, August 11, the Sacramento city council will decide whether to give away the half-block from K to L on 8th Street, containing the Bel-Vue Apartments and several other buildings to developers Bob Leach, Mohammed Mohanna and Parkcrest Development. The land was recently purchased by the city from Mohanna at a price of $18.6 million, and the developers are asking not only for free land but several years of tax-free operation. The net cost to the city will be about $34 million, 25% of the total investment for the project, in return for about 10% of the return. The proposed project is a 300-foot luxury hotel at 8th and K and a parking lot on 8th & L where the Bel-Vue stands. The project would destroy all surviving structures on the project site. In addition to the landmark Bel-Vue, the 1895 Feldhusen Building and the circa 1910 Sam's Club building would be demolished, although neither has the status of city landmark.

The proposed project would also demolish two half-blocks of Sacramento's underground sidewalks, along the corner of 8th and K Street. The sidewalks are still clearly visible from the alley, as the photograph above shows. As with the loss of the Bel-Vue, approval of this project would mean the loss of structures that, despite having fallen into disrepair and disuse, are part of the city's historic fabric. By restoring these elements instead of demolishing them, the city can maintain resources that cannot be duplicated in modern construction, and provide valuable downtown housing and a potential historic site of great tourism interest.

The staff report mentions that city staff and the developer have not been able to come to agreement on business terms, due to the low rate of return for the city and the large investment the project represents. The "Exclusive Right to Negotiate" (ERN) between the city and the developers has been extended twice in order to work out details, but city staff is still not confident in the developer's proposal. The council has been asked to advise city staff how to proceed.

Full staff report is visible here:

sacramento.granicus.com/MetaViewer.php

In slightly brighter news, at the same meeting the City Council will hear (and hopefully approve) a plan to restore the Berry Hotel, just across the street from the Bel-Vue. The hotel was acquired by the city after another developer's plan to restore the building failed last year. The hotel is currently being vacated by the city, and is almost completely vacant. This plan would restore the interior of the building, providing long-needed repairs, and reopen the Berry as permanent housing for very low income individuals. The Berry has filled this role for years, but if this plan is approved, the building will be completely renovated and restored, and a social services agency will provide a staff person to work with disabled residents. The staff report is visible here:

sacramento.granicus.com/MetaViewer.php

These two projects are almost polar opposites. The restoration of the Berry Hotel promises to bring back a city landmark, restoring to occupancy a 1920s hotel. The project will house those least able to find housing, those with very low income, and it will be completed for far less than a new project of similar scale would cost. Across the street, the Bel-Vue was occupied by tenants until shortly before it was taken over by SHRA. It will be demolished and replaced with a parking structure. The proposed hotel project will be utterly infeasible without a massive subsidy, one that a city in the throes of a financial crisis cannot afford. Perhaps the City Council will review the Berry project and consider what else they might do with the Bel-Vue, a city landmark and apartment building, for less money than the developers' subsidy.

The meeting will be held at New City Hall, 915 I Street, Sacramento, at 6:00 PM in the main council chambers.

The full city council meeting agenda is viewable here:

sacramento.granicus.com/AgendaViewer.php

(In the interest of disclosure, I oppose the demolition of the Bel-Vue and plan to attend in order to voice my opposition to the 8th & K project--and my support for the restoration of the Berry Hotel.)

Land Giveaway at 8th & K

2009-07-16T18:06:30Z

City plans to demolish the Bel-Vue and adjacent buildings were mentioned in my Sacramento Press article on July 3 ( http://sacramentopress.com/headline/10159/City_To_Demolish_Landmark_BelVue_Building ) but at the time the developer and financing organization behind the project were not identified. Since then, both have appeared, along with an additional partner. The financier, Consus Asset Management, is a new player in Sacramento. The developer, Bob Leach, just completed another Sacramento project, the Le Rivage Hotel. The other player in this project is a well-known name in K Street real estate, Mohammed “Mo” Mohanna. All three are asking the city for $18.6 million in free real estate and several years of tax forgiveness once the project is complete, and they want this done immediately, before public input and analysis by city staff and commissions can be completed.

Since my earlier article saw print, these parties were mentioned by articles in the Sacramento Bee, in Bob Shallit’s columns:
http://www.sacbee.com/shallit/story/2005107.html

In this column, Shallit mentions South Korea based Consus Asset Management (http://consusgroup.com/ ) as the primary financier, willing to put up $91 million for construction. Lead developer Bob Leach, builder of Le Rivage Hotel, made contact with Consus through local hotel builder Parkcrest Development. Also on the project team is Mohammed “Mo” Mohanna, who recently owned the land until the city paid him $18.6 million for it, after a lengthy series of negotiations, complex legal maneuvering, and the demolition of the buildings on the corner of 8th & K Street. The article mentioned that the developers were hoping for some tax breaks on this project.

Shallit followed this up with a second column:
http://www.sacbee.com/shallit/story/2017611.html

Here, the developers have urged the city to move quickly or risk losing financing. They have asked the city to give them the land, currently city-owned, for free, and to forgive taxes on the hotel for the first few years of its operation. Transferring the land quickly would also mean that there would be no time for an Environmental Impact Report to be completed, and before issues like the demolition of the Bel-Vue have had an opportunity to be fully reviewed by city staff, Preservation Commission or Planning Commission.

This issue will go before the Sacramento City Council on August 4. The city of Sacramento has held an Exclusive Right to Negotiate (ERN) with Bob Leach and Parkcrest, extended for 45 days on June 9, but that ERN expires on Friday, July 24.

The unspoken irony in the developers’ demand is that the city of Sacramento just paid nearly $20 million to wrest the property out of Mohanna’s hands, and are now being asked to give the property back to him. They are also asking for a free hand to demolish a Sacramento landmark, and forgiveness of future taxes, which means that it will be many years before the city of Sacramento sees any economic benefit or return on their investment of $20 million, their donation of a half-block of prime downtown real estate (by the city’s own valuation, worth the $18.6 million paid to Mohanna) and their sacrifice of irreplaceable historic buildings. This free giveaway would also add up to far more than the taxpayer-funded donation provided to developer David Taylor to rehabilitate three existing buildings on the 1000 block of K Street, a move that sparked widespread public criticism.

Why is there a need for such urgency? One possible answer is that there is another hotel project planned for K Street, only two blocks away. Unlike the project at 8th and K, this alternate project would require no historic buildings to be demolished. This project does not require the full Environmental Impact Report, instead using a far simpler process called a Mitigated Negative Declaration (MND.) The MND identifies the developer behind the project as "10th & K Developers, LLC" and mentions that it will include 180 rooms in a 12-story building with ground floor retail. Could this simpler, less complex project be the competition that worries the developers behind 8th and K, and enough of a problem to make them demand a massive public subsidy from the city of Sacramento for a project that will not have to pay taxes for many years, and action fast enough to short-circuit public debate and review by city staff?

Meanwhile, the deadline for public comment on the Notice of Preparation is approaching. According to Jennifer Hageman of the city of Sacramento’s Economic Development Department, part of the process will include a public scoping meeting to present this issue to the public, but as of this writing no date has been identified for such a meeting.

To give public comment about this issue, contact Jennifer Hageman of the City of Sacramento’s Community Development Department at jhageman@cityofsacramento.org or (916)808-5538. Written comments should be sent to Jennifer Hageman, City of Sacramento Community Development Department, 300 Richards Boulevard, Sacramento, CA 95811. Comments are due before 4:00 PM on July 27, 2009.
K ST MND 7-1-09 800klEIR eir3

City To Demolish Landmark "Bel-Vue" Building

2009-07-03T21:28:18Z

The city of Sacramento has announced its plans to demolish the Bel-Vue Apartments, a registered city landmark, in order to clear land on 8th Street for a potential future parking structure.

Located adjacent to the now-vacant corner of 8th and K Street, the Bel-Vue was built in 1910 as the American Cash Apartments. Built in the Craftsman style with Asian overtones, the three-story brick building contains apartments above a commercial ground floor. When the Bel-Vue was built, it was one of many downtown apartment buildings. If it was built today, the Bel-Vue would be described as a mixed-use, transit-oriented infill project. The building is currently owned by the city of Sacramento’s housing and redevelopment agency, the result of a complex land exchange between Mohammed “Mo” Mohanna, Z Gallerie owner Joe Zeiden, and the city of Sacramento. This land exchange was part of the currently stalled plans to rehabilitate the 700 block of K Street.

The city’s plan is to prepare an Environmental Impact Report (EIR) containing two possible alternatives for buildings to be built on the site, and then demolish the existing buildings. One alternative is a pair of residential towers 300 feet high, running from K Street to L Street along 8th, originally proposed by former owner Mohanna and developers John Saca (of the failed 301 Capitol Mall project) and John Lambeth. The other alternative is a 300 foot hotel tower at the corner of 8th and K, currently vacant, and a six-story parking structure on the site of the Bel-Vue and the other buildings at the corner of 8th and L. There is no developer or investor specified in the EIR notice of preparation; the city of Sacramento plans to create the EIR and demolish the Bel-Vue and nearby buildings on speculation, in case a developer appears who is interested in constructing the buildings the city has proposed for the site.

When the city of Sacramento acquired the Bel-Vue building and its neighbors, it was an occupied apartment building with several retail tenants on the ground floor. There were also commercial tenants in the adjacent buildings, and apartments above most of those buildings. The city of Sacramento evicted the residents, and today only one retail establishment, a Chinese restaurant, occupies the Bel-Vue, aside from a parking garage in one of the buildings facing L Street.

All of the buildings on the site have a role in local history. 815 L Street, constructed in 1915, was most recently the site of a nightclub of the same name. In 1957, the site was one of the original Sam’s Hof Brau locations. The side of the building, invisible from the street, still bears a painted mural advertising Sam’s. La Rosa, an Italian restaurant opened in 1927, occupied the site before the Hof Brau. On the corner of 8th and L is the Feldhusen Building, a two-story building with ground floor retail and residences upstairs. It was built in 1895 and remodeled in 1954. It was home to many businesses including grocery stores, dressmakers, and the Diamond Club Tavern card room.
Buildings like the Bel-Vue were once commonplace in Sacramento, but over the years they have become very rare.

Today, some developers seek out historic buildings for residential projects, converting them into modern apartments or condominiums. Local companies like D&S Development (http://www.dandsdev.com) have completed projects like the Old Sacramento iLofts and 1409 R, and are now restoring the historic Maydestone Apartments at 16th & J Street. Architect Mike Malinowski, contractor Bruce Booher and CFY Development helped convert the Globe Mills grain mill complex into unique residential lofts. At the Railyards, developer Thomas Enterprises will make the historic Southern Pacific shops buildings the focal point of a new downtown neighborhood. Other adaptive reuse projects like the Citizen Hotel, MARRS, the Cosmopolitan and the Firestone Building show how vacant historic buildings can be made into exciting, unique urban destinations. Projects like these are often more popular than newly-built projects because they offer one-of-a-kind places to live, work and play in an urban setting. They appeal to those who want to be close to the action of the central city and their downtown workplaces, or just like the unique character of historic buildings. Instead of demolishing the Bel-Vue, the building could easily be repaired and returned to its role as a place to live, with businesses on the street to serve downtown’s residents. Restoration of historic buildings is also a greener option than new construction, as it needs far fewer building materials and requires far less landfill space (where the demolished building’s components would end up.) If sales of recent projects like the 1409 R lofts (opened in April and already two-thirds sold) are any indication, these projects are popular even in slow economic markets, while urban infill projects in new buildings are far less successful. Historic buildings can also qualify for tax credits and other incentives that can make rehabilitation cheaper than demolition and new construction. In the right hands, the Bel-Vue could be a gorgeous, attainable new home for Sacramento’s residents for another hundred years.

In recent years, the city of Sacramento has seen many proposed projects fail to materialize. The failure of projects like John Saca’s 301 Capitol Mall towers at 3rd and Capitol resulted in ugly, gaping pits in our city’s urban fabric. Projects like the 700/800 block, bogged down by unexpected resistance and a poor economy, sit languishing, waiting for a better plan to appear. Projects that encourage the demolition of landmarks encourage speculators to allow their historic downtown properties to sit vacant, deteriorating for years or even decades, with the hope of an eventual skyscraper-shaped payoff that may never arrive. More forward-thinking developers could turn the same buildings into Sacramento's urban showpieces.

No developer or investor has been named by the city to actually build this project or pay for it, and even if a developer and/or investor does arrive, if they want to make significant changes to the plan they would need to complete a new environmental document, making this effort worthless. The sacrifice of one of Sacramento’s irreplaceable historic buildings would be for nothing. And even if the city’s long shot is successful, and a developer does build the project, we will lose a historic landmark and a quarter-block of potentially useful buildings for a six-story parking garage in a neighborhood with many underutilized parking garages.

K Street Developments

2008-10-14T07:41:57Z

What can't one find at the K Street Mall? From The Crest to Esquire Grill and Cabana Club, boutiques and fresh-cut flowers, K Street's outdoor mall provides Downtown Sacramento with every necessity. Well, almost every necessity. Right now K Street Mall stands incomplete as nine properties between 7th and 9th Streets currently stand vacant. But hopefully not for long as the discord between the City of Sacramento and Moe Mohanna finally comes to an end.

On October 7, after two years of legal contention, the Sacramento City Council voted to end the eminent domain dispute with Mohanna, offering him a settlement of $18.6 million for his nine properties, located on blocks 700 and 800. With the decision's enforcement by the Sacramento Superior Court, the Housing and Redevelopment Agency can now assume ownership of the properties and make the changes needed to complete the K Street Mall.

However, Mohanna has not been cut out of K Street completely. He will be involved with the development of the 800 block as an associate of Bob Leach - as long as he and Leach agree to repurchase the properties for $150 per square foot. If they do so, Leach plans on building a 400-room hotel - he has already received a letter of intent from Hilton Hotels - with a mixed-use project facing L Street.

Block 700 is already slated to Joe Zeiden, owner of Z Gallerie Home Furnishings in Downtown Plaza. Zeiden plans to open a row of mixed-use retail tied to his Z Gallerie.

If Leach builds a hotel on K Street, it will only be within a three block distance from the new Citizen Hotel. Is it a wise decision to add another hotel, especially when there are already so many within so small a radius? What will building another hotel do to Sacramento's economy? How will this development help/hurt the neighboring Southside Park community?