Alms for the Towers

The Sacramento Bee has an update on The Towers at Capitol Mall condo project.

Condo high-rise seeks subsidy

With work already well under way on his twin 54-story condominium and hotel towers, developer John Saca is still wrapping up important financial details, including obtaining an $11 million subsidy from the city and closing on his construction loan.

Caught between rising construction costs and a slumping housing market, Saca has seen the budget for his $500 million project, which would be the tallest residential structure on the West Coast, tighten. A few months ago, Saca began negotiating with the city for a subsidy, something he said he had previously viewed as "a last resort."

"We absolutely need it," he said. "What's happened is our construction costs for the project have gone up well over $100 million from last year."

The money would be used to help pay for furnishings and fixtures in the luxury InterContinental Hotel slated to occupy the lower 18 floors in one of the two towers at Third Street and Capitol Mall...

Condominium owners will have access to a spa, room service, a concierge and other hotel-style amenities in return for homeowners' dues of $500 a month, far less than those charged in many new high-rise condo projects.

"This is the first high-rise residential project to be built downtown," Saca said. "To compel people to move out of their homes in east Sacramento or wherever, you've got to give them amenities."

Another piece of the financial puzzle that Saca has yet to complete is the closing of his $375 million construction loan with Germany's Deutsche Bank. The developer said he needs to obtain "less than a hundred" more non-refundable deposits before he meets the requirements for closing the loan.

So far, Saca said, he has collected non-refundable deposits on about 400 units at prices ranging from the high $300,000s to $4 million. "We are really close to hitting the number we need for our lender," he said. "It's not a concern for us now."