|By Bob Shallit, The Sacramento Bee,
Calif.McClatchy-Tribune Regional News
Jul. 7, 2009--Developers of a proposed downtown high-rise hotel say they've nailed down the rarest of commodities: project financing.
South Korea-based Consus Asset Management has pledged to invest more than $91 million to build a 25-floor, 409-room hotel at 8th and K streets and a six-story parking garage at 8th and L, says lead developer Bob Leach.
"Even as bad as things are here, they think (Sacramento) will recover faster than other parts of the country," Leach says of Consus officials, who made the cash commitment after a series of face-to-face meetings in South Korea over the past six months.
Leach says he and his partners made contact with Consus through Sacramento-based hotel-builder Parkcrest Development Corp., a Korean-American company that he says is working with Consus on a hotel and train station project in Seoul.
Parkcrest will become a "co-developer" of the $136 million Sacramento project, says Leach, developer of the upscale Le Rivage Hotel on the Sacramento River.
Also on the project team is Moe Mohanna, the Sacramentan who sold his K street properties to the city last fall for $18.6 million after a lengthy legal battle.
The development group currently has an exclusive right to negotiate with the city for the 8th and K site. That agreement expires later this month, but Leach is confident it will be converted to a long-term deal once city officials see his financial backing.
"This is the only (proposed downtown) project that has financing tied to it," he says. "Why not let us run with the ball and score a touchdown for K Street?"
Leslie Fritzsche, the city's downtown development manager, says the development group has made progress. But she has not been able to contact Consus officials to confirm their level of interest. "We're still doing our due diligence on this project," she adds.
Leach's group is asking for some city tax breaks as part of its overall financing plan.
If all goes well, Leach says his team could begin construction next summer on a Hilton, Marriott or Starwood hotel that could open by late 2012.
He sees the hotel project increasing the city's ability to host major conventions, spurring business at Downtown Plaza and leading to store openings on the long-troubled K Street Mall.
"You get this project built and people will be lining up to put retail on the 700 block" of K, he says.
Sign of the times
When the going gets tough, the tough get -- new job training.
Which explains why a local vocational school -- National Career Education -- is nearly doubling its local operations and moving into larger digs along Highway 50.
The school is moving in August from Citrus Heights to 31,000 square feet of new space at 11080 White Rock Road in Rancho Cordova.
The lease deal, negotiated by Chris Strain of the Sacramento Cushman & Wakefield office, brings full occupancy to the building, one of 10 in the Rancho area owned by New York-based DRA Advisors.
NCE offers training for such jobs as pharmacy technician, lab assistant, optometric assistant and EKG technician.
Interest in those fields has soared as the job market shrinks, says director Donald Fraser, whose 300-student campus is part of Delta Career Education Corp., based in Virginia Beach, Va.
Fraser expects to boost enrollment by 200 to 300 students after the move.
"Just about everything in the medical field in is demand, especially as baby boomers start to retire," he says.
Reach Bob Shallit at (916) 321-1049. Back columns: www.sacbee.com/shallit.
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