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Council to choose K Street developers

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The Sacramento City Council is set to vote Tuesday night on the developers who will tackle the blighted K Street Mall.

The question before the council is whether to support the recommendation of Mayor Kevin Johnson’s ad hoc committee to go with the biggest proposal, which has a "Boqueria" public market as its centerpiece, or to back two other proposals to redevelop the troubled 700 and 800 blocks of K Street on $40 million in city-owned land.

Only one selection committee had been identified in the city’s request for qualifications. Last month, that committee recommended the 700 block be redeveloped by D & S Development and CFY Development, with their Promenade on K project estimated at $35.5 million. The committee also recommended the 800 block be redeveloped for an estimated $46 million by Sacramento developer David Taylor and Z Gallerie owner Joe Zeiden. Downtown Sacramento Partnership endorsed those selections.

Johnson’s committee, which included City Council members Steve Cohn, Rob Fong and Ray Tretheway, on Thursday announced its preference for the $210 million project by the Sacramento Alliance Team, led by Rubicon Partners, St. Anton Partners and Preferred Capital Advisors. The ad hoc committee was formed to study the proposals in more depth and bring the council members more detail than what they would get at a council meeting, Cohn said.

"The ad hoc commitee of the council went with the more exciting proposal that seemed to have more promise to turn around not just that portion of K Street, but also to rejuvenate downtown with a unique concept," Cohn said. "I think the screening committee was going for the safety of what they thought could get done."

The council will have a challenge making a selection and providing direction to staff and developers Tuesday night, he said.

"It’s going to be incumbent on the council to give guidance on tight time frames, and if this thing’s not financeable, that we don’t let too much time go by before figuring out if it can’t be done," he said. "If it can’t, then we’ll need to fall back to one of the other two that were recommended."

The City Council was initially scheduled to make its selection in May.

The nine-member council must choose between three out of four teams that submitted proposals in March. At least two of those teams have been intensely lobbying the City Council, city staff and the community in the days and weeks prior to the vote.

The D & S and CFY development team — led by D & S partners David Miry and Steve Lebastchi, Miry’s son Bay, CFY owner Cyrus Youssefi and his son Ali Youssefi — has sent more than 500 e-mailed petition signatures to the City Council.

On Saturday, they held an online petition drive at Shady Lady, at 1409 R St. So many signatures flooded City Council e-mail boxes that they closed down their project’s website Monday at the city’s request, Miry said.

Representatives from the Sacramento Old City Association, the Environmental Council of Sacramento and local construction trade unions have thrown their support behind the project and are expected at the council meeting. At least eight local business owners with ideas for the 700 block’s spaces have voiced support as well, he said.

The D&S team is requesting $16 million in existing city Redevelopment Assistance funds and would invest $1.5 million in cash equity and $18 million in conventional debt to develop the 700 block, Miry said.

That team was "surprised" when the mayor appointed an ad hoc committee to take a second look at the proposals, said D & S official Bay Miry.

"It certainly caught us off guard," he said. "We thought it was a slam dunk once we received the recommendation of the selection committee."

The Mayor’s office did not return a phone call seeking comment.

The Rubicon team — the same developers behind the creation of the Citizen Hotel — on Monday provided last-minute information to council members and city staff on numbers contained in the city staff report posted Thursday. Two weeks ago, they held a reception to present the community with more details about their proposal. Representatives from organizations including the California State Board of Food and Agriculture and the California Travel and Tourism Commission have thrown their support behind the team, and individuals have e-mailed through the team’s website.

That team’s proposal would require $99 million in public subsidies, according to the city staff report, which also identified an $80 million funding gap.

However, the team said the funding gap is $50 million, but sources to fill that gap have been identified as coming from private investment by the food and agriculture industry, state funds and federal funds, and a $13.5 million parking bond. No money would come from the city’s general fund, said Project Director J-E Paino of Rubicon Partners.

"The size of the gap is smaller than it appears," he said. "Funding has not been obtained, but funding sources have been identified. We know where we’re going to go to get them. But we can’t go get them until we get control of the land."

The team would invest more than $122 million in private debt and equity into the project, which calls for $19.6 million in RDA funds. Paino said they expect another $19.5 million to come from project-generated tax increment funds, permits and fees, according to information provided to the city.

The team also proposed a $25 million parking bond, according to the city staff report, which said the city can’t undertake that debt. Paino said Monday the team withdrew a request for a $12 million parking bond for the 700 block.

Taylor could not be reached for comment.

Supporters of the development teams are expected to turn out at Tuesday night’s council meeting.

SOCA supports the selection committee’s recommendations partly because the teams would preserve the historic buildings on the 700 and 800 blocks, including Bel-Vue Apartments, rather than just their facades, said SOCA Board Member Kay Knepprath, past president.

"Both of those proposals are realistic and can happen soon," she said. "We are concerned that the city choose developers who have adequate financing and can make it happen."

The council’s dilemma really stems from the existence of such strong proposals, Cohn said.

"What’s reflected that you have three out of the four teams being recommended is that we really had excellent proposals," Cohn said. "It’s a good problem to have in that it’s a tough choice."

Suzanne Hurt is a staff reporter covering business and development for The Sacramento Press.

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Suzanne Hurt

  • William Burg

    While looking around for information about farmer’s markets, I found some articles about the “Copia,” located in the Napa Valley, a “cultural museum and education center dedicated to the discovery, understanding, and celebration of wine, food and the arts in American culture.” It was built as a new structure at a cost of $55 million, completed in 2001, with support from Robert Mondavi, the University of California at Davis, the Cornell University School of Restaurant and Hotel Administration, and the American Institute of Wine & Food. Opening with great fanfare and massive support, they were expected to become a national draw. Unfortunately, the tourists and visitors never materialized, and the Copia lost about $4 million a year, finally closing its doors in 2008, declaring bankruptcy with $80 million in debt. The city of Napa hopes to find a new plan to revitalize the site, but currently it is vacant after being put up for sale in 2009.

    • Susan Bush

      This tourist thing Bill. What are we–Chopped Olives? We have local people who support local business and that is what tourists really want to see. It is called “the real thing!” –not some trumped up circus tent with a fancy European name. The only name this plan should have is Flim-Flam!

    • William Burg

      Exactly…this “Authenti-City” plan is severely lacking in actual authenticity. People already come here to see our historic architecture and urban core, not just in Old Sac but throughout the central city. They don’t want to see dolled-up fakery, they want the genuine article. They want something they can’t find in the suburbs, and who can blame them?

  • I’ve been looking for specific information on this Boquaria project for a half an hour now and come up empty. I went to http://www.700block.com only to find

    Maintenance Mode

    700 Block “Promenade on K” is currently undergoing scheduled maintenance.

    Sorry for the inconvenience.

    This is typical Kevin Johnson fashion to schedule maintainence on the night before a big vote. this is the very time that the most people will be wanting to access it. He’s hiding something here. I WANT TO KNOW ABOUT THIS AND I AM DENIED INFORMATION BY THE MAYOR AND HIS CRONIES ONCE AGAIN. IT’S MAKING ME AN ANGRY MAN.

    There should be no vote until we can get detailed information on this project. I have found lots of information on the other projects and they look pretty good to me and are way less expensive. Remember, these blocks have been blighted for a long time and nothing needs to be decided tomorrow night. Better to have no decision than a bad one.

    • William Burg

      Here is the link to all the projects:


      You can review all the proposals via the page above.

      The 700block.com website is the one that people could use to send emails to city council members to show their support for the D&S project. The Council got so many emails the city asked D&S to shut down the website!

      The Rubicon plan has its own website.

      They also have a method to send emails to the City Council in support of their plan…but apparently the city has not asked Rubicon to shut down their site. Maybe they haven’t received very many emails of support for Rubicon?

      And while you may not be able to send an email that way, you can still add an “eComment” to the City Council via the Council meeting webpage:


    • Rich E.

      yes it is all KJ’s fault. his committee of one is hiding everything and keeping the public out….what? there are other city councilmembers who are sitting on this committtee with KJ, each of whom have websites that could post things and keep the public up to date on progress…..oh, i see. so steviegee is wrong again. shocking!!!!!!!!

    • Ben Ilfeld

      Just left my comment. I think we all owe it to our city to have our voices heard on this issue.

      Perhaps when authors write about city council agenda items we should post a link to the eComment system. It is a pleasure to use. I hope somebody reads it.

  • William Burg

    One bit of late-breaking news–ECOS, the Environmental Council of Sacramento, has voted to support the D&S and David Taylor projects recommended by the Selection Committee.

    Wait a second…the Rubicon team withdrew a request for a $12 million parking bond, and then added *another* $13.5 million parking bond? How exactly does that work? Are they just playing accounting tricks now?

  • I love how Rubicon is at the 11th hour making more stuff up about how they plan to fund the project. Shady accounting tricks for everyone! It doesn’t matter if it’s 125 million, 99 million or even a mere 50 million they want in free public money, it’s tens of millions more than we have to give. They forgot to mention the city is already giving them 40 million in land assets.

  • the 700 block promenade is the D & S petition website. It is not KJ’s site & the article says the city asked them to shut it down. But you can still give the council your feedback – you can use the e-comment feature on the city council website agenda page -it’s item 32; items 1-30 are on consent and will go pretty fast. The item is a a recommendation to support the selection of Rubicon partners. If you support D & S, then you oppose the recommendation before the council. There is no detailed information from the Rubicon proposal from the developer because they don’t want you to know they’re asking for 99 million in subsidy. Josh Paino now says it’s only $50 Million. Whatever number you choose, it’s still tens of millions of dollars we do not have. Period. Do read the staff report for this council agenda item – it is the only place you will see a comparison of the projects and any financial information. Good luck in your search for information.

  • Cohn, why give Rubicon time to see if financeable when Staff report basically says it is not? I’d love to see if a motion would pass for the Selection Committee recommendation based off what the the other 5 CMs think who weren’t in this suspicious Ad Hoc…

    • Susan Bush

      I’ll second that Camille! Have these foolish councilmen thought this through? Have they considered what would happen if the Big Dream side actually wins tonight? By the time any of them are up for election, that ridiculous Boqueria tent will be falling down around our ears. The bond measure will have failed as everyone knows it will. The high rise more than likely will go bankrupt and the city will be left with another Big World Class Exciting City Dream (name it what the mayor will) MESS. Fong, Trethaway and Cohn will be lucky to win office as Dog Catchers, because their constituents are not going to forgive or forget this one, how can we? We will be paying for this blunder for decades to come and have nothing to show for it.

  • I just looked through tomorrow night’s agenda and this whole thing seems increasingly shady – aside from the last minute creation of a second recommendation committee- why does the recommendation of the Mayor’s committee automatically trump that of the 1st committee composed of experts (you know the ones that actually know what they are talking about) to become the defacto decision of the Council? According to the agenda and Cohn’s comments in the article it seems like they just want the Council to rubber stamp “Authenticity” at tomorrow’s meeting. I hope that the show of support for the other plans will convince them otherwise.

    Rubicon’s proposal sure is “exciting” and a “unique concept” if you don’t count the fact it will demolish everything that is “exciting” and “unique” on the those two blocks and replace them with the type of anonymous architecture that could be found anywhere. I’m so sure the addition of a public market is going to drive tourists to line up for something they could have seen in downtown Phoenix in 1985.

    It is encouraging that so many have seen through Rubicon’s flashy imagery and chosen to get involved by contacting the City Council in support of the plans that would preserve the historic buildings on the 700 and 800 blocks. It seems unfair (to say the least) that only D & S was asked by the Council to shut down its website. D&S should direct supporters of their plan that have not already done so to contact the Council through the “eComment” feature that Mr. Burg linked above and to attend tomorrow’s meeting.

    • William Burg

      Interestingly enough, Johnson didn’t attend the meeting of the ad-hoc committee that he called:

      Mayor Kevin Johnson did not attend the council ad hoc committee vote, but is leaning toward supporting the Rubicon proposal, said R.E. Graswich, mayoral special assistant.

      Read more: http://www.sacbee.com/2010/07/13/2885904/sacramento-council-to-vote-on.html#ixzz0tXqiUxyT

    • Susan Bush

      The only thing Johnson is leaning on is the councilmen whose support he has somehow coerced from otherwise good men of sound judgement. It appears Gentle Bloggers, that we now have got our “Strong Mayor.

  • Susan Bush

    Has anyone got any information on who this Rubicon Development Entity is? It seems funny that the city and my councilman have web pages which list important and upcoming events, as well as ways of polling their constituents and isn’t it funny that none of this makes it onto those pages? My councilman has zoo days listed all the way back to January on his calendar of events, yet something important enough to meet privately with the mayor, or I see now the story is that the mayor was never there at his meeting, anyway this is so important that the carefully considered report of a staff of redevelopment experts is tossed aside and we are back to step one and this cannot compete on the councilman’s calendar with zoo doings? Also in going back to square one, where is the review? Where is the time for the councilmen and woman’s own staffers to review the information that will be presented tonight? This is especially important in light of the last minute fiddling with financing by Rubicon. To call it a travesty is not enough–people we have to look at our local government and see what is wrong, because when our elected leaders stop serving us with economy and good sense–what are we paying them for?

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