A first for CADA as it seeks to build condos facing Capitol Park
Ben van der Meer | Sacramento Business Journal
Capitol Area Development Authority is looking for a developer to build housing on a parcel facing Capitol Park. And for the first time in its history, the agency is offering no subsidy.
The site on the southwest corner of 14th and N streets could yield up to 48 new residential units, with CADA expressing a preference for a market-rate condominium project.
“It’s a great site, across from Capitol Park,” said Wendy Saunders, CADA’s executive director. “We’re excited.”
On Friday morning, CADA directors approved a process to begin a request for qualifications/proposals for the site. The building would replace a 36-space parking lot and the 30-unit Senator Manor apartment building. Also part of the site is a 1946 structure that would be preserved: an 11-unit apartment building called Le Chateau.
As far back as the 1980s, CADA has considered potential developments on the location, referred to as Site 21. A density plan adopted in 1997 suggested a project of two mixed-use buildings on the site for a total of 64 housing units, but attempts to get a project there never got off the ground. More recently, CADA put plans to develop the site on hold after first the Great Recession and then uncertainty by state government officials about CADA’s future, since resolved.
Saunders said a for-sale condominium project would be unusual, particularly in the Sacramento urban core. Because of state law allowing condo buyers a longer period to file suit over building defects, many builders steer clear unless they’re sure of the return.
“We’d like to kind of be a leader on this,” she said.
Under what the board adopted Friday, a development on Site 21 would represent another first for CADA: No agency assistance. The authority would sell the property at market rates to a selected developer, and the developer would cover all associated development costs as well.
“The market success of CADA’s recent projects indicates that a Site 21 development project should be viable without any CADA financial assistance,” the staff report for the item states. Elsewhere, the report notes the success of other recent CADA residential projects such as Legado de Ravel and 16 Powerhouse, as well as anticipated interest in Site 21, as reasons to have no subsidy on a project there. Up to six development teams could submit proposals for the site, according to CADA.
Saunders said she didn’t think the lack of a subsidy would scare off developers, particularly a for-rent project. Whether a condo project would work is less certain, she said.
Under the anticipated development timeline, CADA staff would first prepare an appraisal for the site’s worth, then issue the request for proposals in May. Selecting a developer would come in September, while construction isn’t set to take place until at least 2018.
Ben van der Meer covers real estate, development, construction, water issues and the business of sports.