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With the approval of the 700 block project on K street, developers Bay Miry and Ali Youssefi are closer to realizing their long-awaited vision.
But that vision has changed in some unexpected ways since its initial proposal.
First, that vision “got a lot bigger,” Miry said.
When Miry and Youssefi were awarded the project in July 2010, they didn’t have access to the interior of the buildings at the project site.
“The initial proposal was very conceptual in nature,” Youssefi said. “We knew that if our team was selected we'd have the opportunity (later) to refine the project design based on a thorough inspection of all the buildings.”
Once they were handed keys in late August, they had a chance to fully explore what the building had to offer – and what they found was surprising.
“We realized that there’s tons of character and potential to not only create basement concepts, but also rooftop concepts,” Youssefi said. “Sacramento just doesn’t have nearly enough rooftop restaurants and businesses.”
The discovery allowed them to nearly double the amount of retail space offered in the plan from 37,480 to more than 64,000 square feet – and increased the total cost of the project from $35.5 million to about $47.7 million.
The housing element of the project also changed.
Initially, the plan called for 136 rental housing units, but the design underwent some architectural changes, and the overall appearance of the block was modified and the number of rental units increased by one.
The level of affordable housing also changed from all moderate-income units at the start to a mix of 60 percent low- to moderate level affordable income housing units and 40 percent units rented at market rate.
“The affordability and total number of housing units fluctuated for several months as we were refining the design of our project and evaluating different sources of financing,” Youssefi said.
(An in-depth look at affordable housing is covered here.)
A portion of the project relies on affordable housing subsidies – funding that critics have called into question.
During the discussion of the project at the City Council meeting on Tuesday, Sacramento Housing Alliance Policy Director Bob Erlenbusch said the public subsidy is being applied inappropriately.
“The current proposal … over-subsidizes the affordable units in the development,” Erlenbusch said. “It’s significantly higher than the average (for the area) and is based on unreasonably high market rents.”
Erlenbusch said, “Simply put, SHA feels that there is too much subsidy for hardly any affordability.”
The developers disagree.
“Having the units be a mix of low/moderate and market rates creates a diverse community,” Youssefi said.
It also provides apartments to “an under-served demographic – people who don't qualify for traditional low-income housing but who can't necessarily afford the market rents in downtown Sacramento,” Youssefi added.
Miry noted that the city has invested a lot of money in projects in the downtown area that target low- and very-low-income thresholds.
“To balance that out in the K Street area,” Miry said, “there was a strong desire (from Miry and Youssefi and the Economic Development group) that there be a healthy portion of market-rate housing in the block as well.”
Council members applauded the revised proposal as they completed the agreement with developers and gave their approval for the project.
“This is a very exciting project,” said Councilwoman Angelique Ashby. “This (project) is what we are trying to do: rebuild our city. Make it a special place for people to come together. (This project) provides solutions for everyone who wants to be a part of downtown.”
Where Do They Go From Here?
Now that the project has City Council approval, Miry and Youssefi turn their attention to the next two steps in the process: finalizing project financing and securing building permits.
“Everything we’ve worked on architecturally so far was the conceptual drawings package required for Planning Department approval,” Miry said. “Now we go into specific detail of how we are actually going to construct the project.”
The developers need to complete and submit final construction drawings and get them reviewed and approved by the building department before breaking ground on the project.
Miry said it will take two to three months to complete the construction drawings and another two to three months to obtain approval from the city building department.
“After that, we’re ready to go,” Miry said.
“We’ll be (sub-contracting) some work, but the day we have permit in hand, we’ll be able to start the demolition process,” Miry said. “If (the building department) will issue a demo permit ahead of the building permit, we’ll start even sooner.”
Ashby and Councilman Kevin McCarty underscored the importance of the 700 block project with praise for the benefits of moving the project forward.
“We’re always saying ‘jobs, jobs, jobs,’ ” McCarty said. “Well, (this project) means 400 jobs for our community. This is great.”
“It’s a true partnership between the (Sacramento Housing and Redevelopment Agency) and the business community, and a partnership with the community at large,” Ashby added.
Miry and Youssefi said a lot of people have wanted to see K Street revitalized for a long time.
“We’re confident we’ll be able to put it together by the new year timeframe,” Miry said. “We’re going to see a cool new Renaissance here on K Street pretty soon.”