8th & K Street Hotel Proposal Update

A revised proposal by USA Hospitality, Inc. and their equity partners Consus Asset Management and Industrial General has been submitted for building a Marriott Renaissance Hotel at the corner of 8th & K Street. The new proposal includes a decrease in the number of hotel rooms from 409 to 300, and a decrease in the number of parking spaces from 372 to 350 while adding 100 condominiums on top of the parking garage as a second phase of the project. The total cost to build the project went up from $137 million to $162 million along with the needed city subsidy to build from $31.5 million to $33 million. The developer has asked that the city give them the land which is city-owned for free, and to forgive taxes on the hotel for the first few years of its operation as part of their needed subsidy deal.

The property has been tied up for 14 months in an "Exclusive Right to Negotiate" with USA Hospitality, Inc., but on December 8th the city staff will recommend releasing the Request for Qualifications for the 700 and 800 blocks of K Street with a due date of February 12, 2010. It’s anticipated that the city staff could return to the Redevelopment Agency by early April with several other proposals for the 8th & K Street site. In that time USA Hospitality must do three things.

1) Obtain stronger financial commitments from all equity financial partners.
2) Developer conduct an assessment of the Bel-Vue to determine the costs associated with preserving the façade.
3) Complete negotiated business terms for inclusion in Disposition and Development Agreement.

I still don’t see the value in the city giving away $33 million in land and future taxes when just two blocks up the street at 10th and K Street Toni Giannoni is asking for $10 million to build a 165-room hotel that better fits our market. Toni also has an excellent record of finishing projects downtown where there are more development regulations that can tie up a proposal. In the case of the 8th and K Street design, the developer has a half block to work with, so instead of a massive parking garage the parking should be spread out over the entire half block above the lobby and ground floor retail but below the hotel rooms like has been done with ten other high-rises in downtown. If the city can nudge the developer to do this sort of design instead, the proposal would actually be shorter but the curb appearance would be far nicer. We don’t need another 6 story car garage at the corner of 8th & L Street; car garages have a history of deadening side walk activity for entire blocks and devaluing distinctive corners in our city. I hope both our City Council and planners consider the consequences, there is no need to repeat mistakes of the past again.

City owned parking garage across from city hall at 10th & I Street

Yee Fow Center

As part of the Sacramento Railyards to commemorate Chinese heritage a privately-funded Cultural Center is currently being planned to provide cultural exhibits, performances, banquets, and a world-class trade facility. The development of the Yee Fow Center of History, Culture and Trade would also include residential, museum, library, educational class rooms, retail, and offices for trade oriented companies/associations, fitness center, and Chinese Garden.



The Trade Center includes a Residential tower of an approximate 40 stories with 360,000sf, Chinese Garden landscape of 1.38 acres, podium with office space of 93,000sf, history and culture center 100,000sf, retail 63,000sf. A “Feasibility Study” to determine the framework defining revenue, operating expenses, capital cost, and anticipated attendance still needs to begin. Stantec Design Firm did these renderings back in 2008.

More information on the Yee Fow Center

Dim Lights at 500 Capitol Mall

For some reason the exterior lights of 500 Capitol Mall just aren’t as bright as they were advertised three years ago when it was approved to build by the city. Unless you standing right in front of the tower, the dim lights that are on it can hardly be seen and a big disappointment compared to the night rendering (shown above) making it really glow like the Wells Fargo Center on Capitol Mall. I have contacted the leasing company of the tower several times asking if the exterior lighting was going to be improve only to be told they would get back to me but never did. I was really hoping that this building would add more dramatic lighting to Capitol Mall like other new high-rises on the Mall. Unfortunately, I think this will be the best were going to see from this tower and it will join the many other high-rises downtown that have also failed to light-up as advertised like the Federal Courthouse and EPA tower on “I” Street. Aesthetics like lighting are so important now that our cities tiring to push forward a makeover of Capitol Mall from the riverfront to 9th Street, let’s hope some lighting improvements can be made in an effort to revamp the Malls future.

Downtown prepares for Carnival of Lights

This holiday season, the Carnival of Lights will delight visitors with a dazzling display of lights throughout the Central City from the waterfront through Midtown starting the week of Thanksgiving through January 3. The collaborative effort will feature architectural lighting, holiday décor, and holiday events including the Theatre of Lights in Old Sacramento and the Carnival at St. Rose at 7th & K streets.

“Downtown has always been a center for holiday activity. This year we’re taking it up a notch with the Carnival of Lights,” said DSP Executive Director Michael Ault. “Downtown, Old Sacramento and Midtown are partnering up to create a festive pedestrian experience that connects local events with nearby businesses, restaurants, theaters and other cultural attractions.”

Downtown landmarks including the Memorial Auditorium, Community Center Theatre, Elks Building, Hyatt Regency Hotel, Sheraton Grand Hotel, and Citizen Hotel will be aglow with colorful lighting as part of the cooperative program. The DSP, in collaboration with SMUD and the City of Sacramento, will illuminate K Street with LED twinkle lights and street poll decorations on J, K and L streets and Capitol Mall. The DSP is also partnering with private property owners and downtown businesses to participate in the holiday festivities by lighting their buildings.

Theatre of Lights
The Carnival of Lights will kick off in Old Sacramento the night before Thanksgiving with the annual Old Sacramento Tree Lighting and the Theatre of Lights, produced by the Old Sacramento Business Association. The Theatre of Lights will bring history to life through a narrated show of lights, sounds and visual effects. The light show will take visitors back to a time when the beloved poem The Night Before Christmas was first introduced in Sacramento in 1857. The first Tree Lighting of the season and Theatre of Lights inaugural night will take place on November 25 at 6 pm in Old Sacramento at Front and K streets. Two 10-minute light shows will run every Thursday through Sunday at 6:30 pm and 8:00 pm through January 3. For more information, visit www.oldsactheatreoflights.com.

Carnival at St. Rose
The Carnival at St. Rose is a 5-week holiday event that will transform 7th and K streets into a festive winter carnival. The event will take place in lieu of the ice rink this holiday season due to conflicts in construction schedules with the K Street Streetscape project and renovation of St. Rose of Lima Park.

Open daily November 27 through January 3 from noon until 8:00 pm, the Carnival at St. Rose will feature a ferris wheel, classic carnival and arcade games, and food vendors. In the spirit of the season, the carnival will also incorporate live entertainment, a gingerbread house chef challenge, a craft fair, and charity events. Admission to the event for a two-hour session is $6 for children and seniors and $7 for adults. Private parties and group discounts are available with advance reservations.

The Carnival at St. Rose is produced by the DSP and is expected to draw visitors from all over the region. The event is presented by the Westfield Downtown Plaza and sponsored by the University of San Francisco – Sacramento Campus, UC Davis Children’s Hospital, KCRA 3, My58, Johnny Rockets and the Holiday Inn Capitol Plaza.

For more information, visit www.downtownsac.org/carnival.

Allowing Bicycles on Portions of K Street

Next week the City Council going to remove restrictions of bicycle riding on portions of the K Street Pedestrian Mall in an effort to make a better connection for bicycles between Old Sacramento and the K Street Mall. I think this will be a good thing because this poor stretch of road needs to increase activity in an effort to bring more people back onto the street. Bicycles still would not be allowed on the sidewalk areas but only the areas between the yellow detectable warning strips.

Capitol Mall Redevelopment Plan

The City of Sacramento looking into creating a stronger more vibrant connection from the Sacramento River to the Capitol by increasing activity on the Mall. The Cities currently looking into holding a design competition for the development from the riverfront to 9th Street where the Mall would become a major attraction for both residents and tourists by the year 2015. The variety of festivals and activities that regularly occur in its beautiful public spaces would draw hundreds of thousands of people annually. The magnificent public art and public works projects that connect the waterfront to the Capitol will be featured on web sites and in magazines around the world. The freeway will no longer feel like a dividing line. Instead, a tree-lined concourse with water features will lead people to and from the riverfront to enjoy the magnificent gateway to California's Capital.

Key strategies the vision for the short term (1 to 3 years):
· Create more events, more festivals to draw people to the Mall.
· Focus on "moveable pieces",e.g. 1-5 bridge, Mall median, Lot X (southwest corner of 3rd and Capitol Mall).
· Leverage existing transportation funds to get something done now that supports the long term vision.
· Deploy circulator buses to enable people to move freely and easily from Capitol Mall to Downtown Plaza, K Street, Old Sacramento, the Railyards, mid-town, R Street, and West Sacramento.

The Mid-term plan (3 to 5 years):
· Encourage the development of select numbers of retail establishments.
· Develop the CaIPERS site (northwest corner of 3rd and Capitol).
· Connect Capitol Mall to the river, metaphorically, physically in all aspects.
· Design highly visible, world-class gathering points for tourists and residents along the Mall.
· Develop more public transit solutions to enable people to circulate from Capitol Mall to Downtown Plaza, K Street, Old Sacramento, the Railyards, mid-town, R Street, and West Sacramento.

Next week on the 10th the City Council will adopt a resolution to be in partnership with the American Institute of Architects and stakeholders to develop a program and hold a design competition for a comprehensive Capitol Mall Plan from the riverfront to Capitol Mall, and the development of a project level design for a specific location.

November 10th 2009 City Council Resolution


Capitol Mall – Circa 1950

10th & K Street Hotel Project

It looks as though Toni Giannoni will continue to pursue building a 165-room hotel in downtown Sacramento at the corner of K & 10th Street even though the 8th & K hotel proposal is still moving forward. It’s anticipated to be an urban style Marriot designed by the renowned hotel designer Marc Hornberger who has also designed the W hotels in San Francisco. This hotel concept includes a pool, approximately 8,000 square feet of meeting space, and downstairs bar and lobby area with grab and go food service, as well as ground floor retail along K Street. The proposed Courtyard by Marriot would be a 12-story, upscale, select service hotel with a sophisticated urban design.

The development team is the 10th and K Street Hotel Investors, LLC, which is a partnership of local developers with a strong track record of development in Sacramento. The partnership includes Brian Larson who was part of the development team for the Citizen Hotel, Jim Brennan who recently completed the office condominium project at 1001 K Street, and Toni Giannoni who has a long development history in Sacramento including Meridian Plaza and the recently completed Marriott Residence Inn at 15 th and L Streets.

The total development cost is estimated to be $43 million. In today's capital market this project can expect to attract an estimated $22 million in conventional financing and $11 million in equity investment, leaving a development gap of $10 million. City staff has begun researching public funding options to assist in the development of this project.

On Tuesday November 3rd, the city will authorize city staff to evaluate several options to fund the gap of $10 million with the posibility of a Transit Occupancy Tax (TOT) fund or to also use the Recovery Zone Facilities Bonds made available by the American Recovery and Reinvestment Act of 2009. The bonds allow for lower financing rates, but require some sort of financial backing from the City or the Agency. City staff is working with the City Treasurer, the Budget Office, and the City Manager to investigate the possibility of utilizing this unique bonding opportunity.

Another option is a HUD 108 loan for approximately $4.7 million combined with a second loan for the remaining $5.3 million. City staff would also investigate potential resources within the City and Agency that could be utilized as capital for the second loan.

In either financing scenario, the City or Agency issued bonds or loans would be repaid or the payments pledged would secure the developer's financing.

If the City Council approves the recommendations to move forward, this will allow city staff to further investigate the financial feasibility of the hotel project so that more formal business terms can be presented at a later date. With this authorization, the developers would expend funds to further refine the hotel concept and result in moving the proposed project forward.