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

[sugit]

I understand what you are saying, POGO, IC didn't "need" this subsidy.

Originally Posted by POGO

And as a taxpayer, I want them to use it wisely. I accept the fact that sometimes redevelopment funds are necessary to jump start development, which will hopefully lead to more tax generation in the form of increased economic activity. The Hyatt was a good example of that. The hotel would not have been built without the City's participation.

I agree, I want my tax money used wisely as well. In my mind, if there was a real chance of the IC not coming and we should be "stuck" with another 3 star business class / convention hotel that wouldn't generate any new income (instead take away from other 3 star hotels), this is a good investment. That's my take on it. In the end, this hotel (and JDV) in my mind will help both leasure travel in Sacramento, and will probably help bring larger convention bookings as well with the increase in avaible rooms and nicer rooms.

I agree, I want my tax money used wisely as well. In my mind, if there was a real chance of the IC not coming and we should be "stuck" with another 3 star business class / convention hotel that wouldn't generate any new income (instead take away from other 3 star hotels), this is a good investment. That's my take on it. In the end, this hotel (and JDV) in my mind will help both leisure travel in Sacramento, and will probably help bring larger convention bookings as well with the increase in available rooms.

Hell, maybe we can even get the GOP (don't bite my head off neuhickman) or the Democratic (don't bite my head off snfenoc) convention with some nicer hotels.

[TowerDistrict]

Originally Posted by POGO

If the reason that the City gave away this money was because Saca is losing money on the project, that is wrong. If he is losing money, it's not the government's role to bail him out. That's the risk of being a developer, you can win big and you can lose big. But the government is not supposed to be his deep pocketed sugar daddy to bail him out when the market changes or if he makes a bad move or a bad financial decision. This is a pure and simple gift of public funds to a developer that all these politicians hope will contribute big bucks to their re-election campaigns.

you're just being spiteful. if the city would not benefit from this project, then why would any of the council give a damn about it? if the city does not show some incentive towards pioneering developments that not only meet, but far exceed the city's objectives for downtown, then nobody benefits.

you should honestly ask yourself whether you want to see downtown efforts succeed for all parties, city, developer, business owners and residents - or would you rather them fail on account of your personal principles.

[TowerDistrict]

here's what i was referring to earlier:

Originally Posted by sacbee

Costs for the entire project have jumped from an estimated $336 million to about $450 million, he said. The hotel itself is projected to cost $106 million.

[POGO]

Originally Posted by TowerDistrict

you're just being spiteful. if the city would not benefit from this project, then why would any of the council give a damn about it? if the city does not show some incentive towards pioneering developments that not only meet, but far exceed the city's objectives for downtown, then nobody benefits.

you should honestly ask yourself whether you want to see downtown efforts succeed for all parties, city, developer, business owners and residents - or would you rather them fail on account of your personal principles.

Spiteful? Just because I want my tax money spent wisely? Grow up. I want Sacramento to be a big time cosmopolitan city with bustling activity downtown day and night. Please explain what economic benefit the City receives from this gift that wasn't already in place before they made the gift. In fact, now that I think about it, the gift is actually going to be detrimental to the development of downtown.
The City has now made a precedent of giving away money to a developer when it didn't have any impact on whether the project proceeded at all, and there is no improvement of the quality of the project resulting from the gift. Now every other developer planning something downtown is going to expect the same thing, and when they don't get it, because there is not enough money to go around, they might not develop their project. They can claim the City discriminated against them because they gave Saca money but not their project.
I actually wish the City would give me $11 million for just continuing to do what I do even without their gift. Wouldn't that be sweet?

[TowerDistrict]

you pop up every time this project faces difficulties and your schtick is wearing thin. you have nothing to go on beside your own paranoia and your pithy crutch of "me the poor taxpayer" is not only foolish, but misguided and disingenuous. If you objected to the city using public money to finance downtown development, you should have opposed that long ago. the fund was established, and is now being executed. any concerns you have about future developments being hurt by the city council's allocation of funding is pure speculation as not one single project has been pulled due to a lack redevelopment money.

I can see that being a concern, but that's not at all what you're saying. You're saying that this whole redevelopment fund is a mistake and it will only harm the city because now everyone will expect it. I see it as these are pioneering, catalyst projects that have severely limited surrounding economy to support their existence. Some of us, the city included, can see a bit farther down the road. And as a taxpayer and a property owner, I'm glad my city is taking the necessary approach towards achieving their goals for downtown development.

[POGO]

It's interesting how anytime someone does nto agree with your view point they are termed short sighted, and you portray yourself as someone with this grand long term vision.

If you would actually read my posts, you might realize that I am not saying the whole redevelopment fund is a mistake. I am saying the City (and therefore the public) needs to get something in return for their money - i.e. a project that would not otherwise happen, or a desired upgrade to the project which doesn't pencil out for the developer. IN THIS CASE, the city achieved neither. Therefore it is a GIFT, not an investment.

As a taxpayer and a downtown property owner, I too appreciate it when the City properly invests money to stimulate the economy or to improve the environs. This GIFT does not do either.

Your continued personal attacks on other forum posters are tiresome and only serve to detract from what could otherwise be a good discussion forum. They make you appear small minded as well.

[sactjs]

I am with POGO on this. The project is already under construction so the city will get the Towers with or without the subsidy. The redevelopment fund is a good idea, but why not spend our money on projects where it could actually make a difference?

sugit - I don't really think the subsidy will make a difference in the quality of hotel that is in the towers.

[TowerDistrict]

did you attend the council hearing on this matter? did they state that this project would happen regardless of whether or not they received more funding? or are you just reacting bitterly to tid bits of info you get on the interweb? i don't attack anyobody, but i do constantly defend the city when it's due. and yes, it is growing tiresome.

why don't you take the time and consideration and address why you think that providing $11 million in funding to a $106 million, four-star hotel downtown does not constitute itself as an investment? what makes this a gift in which the city will not see any return on investment?

[Los_Lobo]

According to the Sacramento Business Journal, the subsidy isn't going to Saca. It's going to the Intercontinental Hotel Group. I agree The Towers project would probably have gone on with or without the subsidy, but the IC Hotel might not have.

City approves Saca subsidy
Sacramento Business Journal - 12:24 PM PDT Wednesday

The Sacramento City Council on Tuesday OK'd an $11 million subsidy that will help developer John Saca's downtown twin towers high-rise proceed.

The council voted 8-0, with Councilman Ray Tretheway absent, to provide InterContinental Hotels Group, whose hotel would be housed in part of the project, an $11 million subsidy once the hotel opens its doors. The subsidy does not go to Saca.

The city leaders feared that the 53-story project, at 3rd Street and Capitol Mall, would not proceed without the subsidy, Leslie Fritzsche, downtown development director, said Wednesday. The cost of starting a new hotel far exceeds operational revenue, she added. The city has provided financial assistance over the years to get the Hyatt, Sheraton and Embassy Suites built.

The redevelopment agency will provide the assistance to InterContinental as loan, which will be forgiven over the 15-year life of the loan.

"We are viewing this very much as an investment," Fritzsche said.

Over the 15 years of the loan, the project would generate $110 million in additional tax revenue. The project also spurs private investment of $640 million. The city will recoup its investment one and a half years after the hotel opens through the new tax revenue that will be generated, she said.

The loan would be paid when the luxury hotel opens, which is scheduled for the end of 2008.

The $11 million subsidy leaves the redevelopment agency with approximately $12 million for future projects. Projects are already in line for some of that money, Fritzsche said.

Saca told the council that rising construction costs caused him to seek the subsidy on the hotel's behalf.

[Los_Lobo]

There's a video clip of the subsidy news story (with reaction on the street) on the KCRA website: http://www.kcra.com/video/10105687/index.html

[Jay916]

Originally Posted by Los_Lobo

There's a video clip of the subsidy news story (with reaction on the street) on the KCRA website: http://www.kcra.com/video/10105687/index.html

God some those people are morons

[TowerDistrict]

hmmm... maybe it's the city's fault. they just doesn't force people to be aware of what's going on.

#1: it's $11 million not $12

#2: it goes to InterContinental, not Saca

#3: to the woman who couldn't walk across the street... there are city-wide streetscape and traffic improvement programs happening right now.

#4: to the homless guy... last month the city approved the "10-Year-Plan to End Chronic Homelessness" which will provide housing, mental health, and substance abuse services for the homeless.


it's just like the measures coming up where everyone is saying "what about schools" "what about the levees" etc... blah blah blah....

[sugit]

Originally Posted by Los_Lobo

I agree The Towers project would probably have gone on with or without the subsidy, but the IC Hotel might not have.

That's my point...

[Los_Lobo]

Originally Posted by sugit

That's my point...

I know. I just wanted to say it too.

[sugit]

I just wanted to confirm your confirmation. lol. You were just able to say it without typing two paragraphs. :-)

[POGO]

Originally Posted by Los_Lobo

According to the Sacramento Business Journal, the subsidy isn't going to Saca. It's going to the Intercontinental Hotel Group. I agree The Towers project would probably have gone on with or without the subsidy, but the IC Hotel might not have.

[

In August, the IC group issued a press release stating they had finalized a contract with Saca to open a hotel in his Towers project. The hotel is owned by Saca and operated by IC group under license to some other IC entity. There was no mention that the hotel happening was contingent on a subsidy being received from the City. Saca has been advertising the signing of the hotel deal for months. If they had already finalized a contract back then, why is that now there is speculation that the IC Hotel might not have gone forward without the subsidy?

[TWAK]

[ltsmotorsport]

Did I mention I like photos....with the whole me not living there anymore thing.....

[Phillip]

Has Deutsche Bank definitely approved the $375 million construction loan for SacaTower yet?

The most recent info I've seen about that construction loan was on September 20, in post #837 here. From a Bee article quoted in that post:

Another piece of the financial puzzle that Saca has yet to complete is the closing of his $375 million construction loan with Germany's Deutsche Bank.

The developer said he needs to obtain "less than a hundred" more non-refundable deposits before he meets the requirements for closing the loan.

So far, Saca said, he has collected non-refundable deposits on about 400 units at prices ranging from the high $300,000s to $4 million.

"We are really close to hitting the number we need for our lender," he said. "It's not a concern for us now."

Any updates on the status of the construction loan?

[TowerDistrict]

Originally Posted by POGO

In August, the IC group issued a press release stating they had finalized a contract with Saca to open a hotel in his Towers project. The hotel is owned by Saca and operated by IC group under license to some other IC entity. There was no mention that the hotel happening was contingent on a subsidy being received from the City. Saca has been advertising the signing of the hotel deal for months. If they had already finalized a contract back then, why is that now there is speculation that the IC Hotel might not have gone forward without the subsidy?

I wrote a letter to Leslie Fritzsche of downtown development expressing support in their decision, yet asking to explain why they chose to subsidize the project if it was in fact innevitable. She was the one who gave the presentation to the city council when they chose to approve the subsidy. i'll post any response i get back from her.