Quote:
Originally Posted by snfenoc
Hmmmm. I didn't think that sports franchises like taking money from their host cities is a notion that requires multiple data points and scientific evidence. Need more evidence? Take a look at almost every other public-private "partnership" that exists.
In regard to the effectiveness of a certain busy body (who blocked me on Twitter...go figure?), I agree that economics is a much bigger influence. However, according to the Business Journal, the profit margin for Yamanee is thin. (At least, that's the developer's excuse for wanting to build upward.) I am not sure what the profit margin is like for Moe's 19 J project, but I doubt the economics are deeply in its favor. Face it, big projects are suicidal. They find any and every way they can to kill themselves. If the slightest problem crops up, investor money can evaporate. All the activist crew has to do is delay things just long enough for these taller projects to die on the vine.
I agree that 8th and K is a great, central location for a 30+ story tower. I mean, how great would it look on the skyline? However, the Kings want to build a cheap, stick frame structure. As we've discussed, it isn't easy to simply trade properties. Why is the proposal so short? Well first, 5-story, stick frame midrises are simply cheaper to build! They require cheaper materials, less labor, smaller cranes, and they receive less opposition from comm(ie)unity activists. There are many other factors too: The Kings biggest interest is turning K Street into a money-generating, urban hipster mall, anchored by the arena, and supported by hotels, retail and restaurants. I doubt that reasonably-priced housing, in mass quantities, is a big concern for them. However, the city wants housing. Also, it's just time for something....ANYTHING....to get built on that site. It has been a blighted, neglected hole in the ground for a decade, which is far too long. Taking all this into account, it looks like the Kings are willing to provide SOME housing, but they'll be doing so in the easiest, cheapest way that still fits into their business model.
Highrises are difficult to build, especially in Sacramento....this conclusion is made without legitimate reasoning? Do you know something I don't? Sure, there is plenty of demand for housing, but demand isn't the only variable in the highrise equation. The hurdles that residential towers face were not just pulled out of my ass. I identified them by reading multiple expert reports . Look around...the nation is in the midst of a construction boom and housing demand is through the roof (mind the pun). Heck, even demand for office is looking better than it has in years. YET only a single, subsidized (mostly hotel and retail) tower is under construction right now in Sacramento. What does that tell you?
Highrises are expensive to build: materials are really expensive, and labor is really, REALLY expensive. Large construction projects require financing, and banks aren't just giving out money. Equity partners are required, but they are risk averse. I think my reasoning and that of the experts is pretty sound.
Towers in Sacramento are NOT impossible. Frankly, I think if Sacramento can string together a few good projects, especially if either Yamanee or 19J can get built, that may be enough to tip the scales. I just hope the market doesn't fall apart beforehand.
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Your right snfenoc, and you have outlined Sacramento’s short coming plainly.
Developers have also come to expect subsidies when doing business in the
grid, few big project happen here unless the city or state offer finical aid.
It’s disappointing not seeing any new high-rises, but in reality, the
Sacramento market is not expensive enough for developers to take the risk.
That goes for office high-rises too. The rental rate per square foot needs to
rise another 13% or 40 cents so that a high-rise office building pencils out.
The Sacramento Business Journal has mentioned several time in the last few
years. If the market is so hot, why has taken nearly seven years for the
L Street Lofts to finally sell its 70th unit of the 92 available? Midtown is much
more desirable to big spenders than anywhere downtown.
Remember Vanir Tower? 27 months ago, they made headlines about their
proposed tower, a year later they even teased that it could get taller
because of all the interest. To this day, the developer still has not filed
any paperwork or paid any entitlements/permits to begin the development
process with the city. Any bets on when they might put some money on the table?
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