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Parkcrest Development and USA Hospitality Urge City to Move Quickly
or Risk  Losing $91 million Hotel Financing Deal, Sacramento California

By Bob Shallit, The Sacramento Bee, Calif.McClatchy-Tribune Regional News

Jul. 11, 2009--Developers of a proposed downtown hotel project have a not-so-subtle warning for city officials:

Act quickly to back the project or risk losing a $91 million financing commitment from a South Korean investment group.

The Sacramento developers -- a joint venture of Parkcrest Development and USA Hospitality -- want city officials to donate the land for the 25-story hotel and a six-level garage on Eighth Street, between K and L. That would be a departure from earlier city plans to sell the land to developers.

The Parkcrest and USA team also wants the city to forgo some taxes during the hotel's first few years of operations.

If those incentives are granted within a few months, Seoul-based investment firm Consus Asset Management "is in," says Sungmin Park, a Parkcrest VP.

But, he says, delays could force Consus to take its money elsewhere: "This is very time-sensitive."

Park says his Korean American company worked for years to get Consus to invest in U.S. projects, but the company was focused on China, Russia, South Korea and other markets where returns were higher.

Setbacks in Asia last year prompted Consus to look for "safer havens" and back the Sacramento project.

Parkcrest is kicking in $8 million, and other local investors, including Moe Mohanna, have committed millions more, giving the developers sufficient funding for the $136 million project, Park says.

Now, he adds, "we just need the city to say 'yes' to us."

City staffers are negotiating with the developers over terms of any deal. The issue is scheduled to go before the City Council on Aug. 4.

Good start

An innovative waste-to-energy plant at Folsom State Prison is building steam.

The project's backers recently were awarded $2.5 million from the state's Energy Commission.

It's "contingent" cash. To collect it, they need to get $8.9 million in federal stimulus money from the Department of Energy.

But execs with Sacramento startup Clean World Partners LLC think they stand a good chance of getting both pots of money.

Both programs use similar criteria, so the state award "is a very good harbinger of success" with the federal award, says Greg Hayes, the Sacramento company's co-founder.

He and partner Warren Smith hope to have the pilot plant in operation next year, converting food leftovers and garden clippings into methane and hydrogen.

The partners are negotiating a deal to buy the technology for the plant from Onsite Power Systems Inc. of Davis.

Naked city

The doctor heading Kaiser Permanente's new south-area trauma center recently learned what it's like to be "on the other side of the board."

That's "board" as in backboard, the medical device used to immobilize and transport patients.

Dr. Joe Karam, a recent Philadelphia transplant, was riding with his wife on the bike trail last week when he lost control, flew over the handlebars and dislocated his shoulder.

An ambulance was called, he was strapped onto a backboard and taken to UC Davis Medical Center, where he reports getting excellent treatment.

It was the first time the 47-year-old Karam had been inside a trauma center as a patient, not a working professional.

He figures the experience will make him a better doc and administrator once Kaiser's new center opens in August.

"I'll certainly be more empathetic with my patients," he reports.

Being a patient proved humbling in other ways, he says, such as having to wear those flimsy hospital gowns.

As Karam put it: "I'd say a good percentage of the (UC Davis) Medical Center staff has seen my bare butt."

Reach Bob Shallit at (916) 321-1049. Back columns:


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