Wednesday, September 20, 2006

Dying on the Vine

The Sacramento Business Journal reports on the death of two downtown condo projects.

Two downtown condo-tower plans die, D.R. Horton cancels plans as market falls

Two planned downtown high-rise condominium projects fell through this week when builder D.R. Horton canceled its plans. The company's decision is a setback for downtown's revitalization, which many believe depends on bringing residents into the mostly commercial area.

But D.R. Horton's move is not surprising. Homebuilders have been backing out of deals to buy land because new-home sales have declined 42 percent in the six-county Sacramento region this year. Industry insiders wonder if D.R. Horton might only be the first to walk away from downtown development in the next few years.

D.R. Horton division president Tom Harding declined comment, but public officials confirmed the company has backed away from plans to buy a half of a block owned by Sacramento County and build a 21-story condominium tower, said Paul Hahn, the county's Economic Development Director. D.R. Horton has "notified us that as a result of the downturn in the market nationwide, D.R. Horton has been instructed not to put deposits on land for now," he said...

D.R. Horton has also dropped plans to develop a high-rise condo with 203 units along the Sacramento River just north of Old Sacramento, said John Dangberg, the assistant Sacramento city manager overseeing economic development.
Meanwhile, a Rocklin condo development has apparently been abandoned.
The Atlantis Rocklin Condominiums appear to be under water. The phone in the Rocklin office of the developer, Avant Garde Development LLC of Artesia, is no longer in service. The phone number at the sales office goes to a scratchy answering machine that is no longer taking messages. And the phone at the construction company, CDS Builders of Santa Fe Springs, rings and rings and then disconnects...

No work has been done on the project since May. So far, about 55 townhomes have been built but not completed. They have walls, exterior stucco, roofs, doors and windows. The interiors aren't completed, and many of the exterior doors don't stay closed in the breeze...

What was to be a 250-unit condominium townhouse project in two phases was started four years ago by Avant Garde. It is one of the first major projects to turn into a problem locally for a lender in some time. "It may be the first, but it's not going to be the last," said Dave Alford, local bank consultant. The recent dramatic slowdown in real estate likely will catch some developers off guard, and eventually banks will be taking back properties in various states of completion, he said...

When the sales office opened for the Atlantis condominiums last September, they were priced from $345,000 to $375,000, and there were said to be more than 100 sales reservations. At that time, the Sacramento housing market was still strong. The market has since cooled off dramatically.

7 comments:

Anonymous said...

So bad, so sad.

Max said...

Just waiting for the John Saca shoe to drop. If Deutsche doesn't come through, his project will be the most expensive underground parking structure in history. :)

rmb said...

This is a huge opportunity. :-P Think of the deal Saca could get on this land from the county. He's already asking for $11 million from the city, what's another $100 million from the county in land? This would be a great opportunity for the city becasue all of these project just improve the city no matter what the cost....

Anonymous said...

time for cities to start considering eminent domain proceedings,these abandoned projects are attractive nuisances,and should be valued at salvage prices.pay 10 cents on the dollar,sell it to your nephew and get some affordable housing.

Anonymous said...

Guess SACA is getting SACKED!

Anonymous said...

my mom has a house down the street from the Atlantis project. I drove by there Friday night and there were no lights on. I thought for sure there would be people living there.
Now I know why.

Anonymous said...

Atlantis: First of the do-it-yourself homeless shelters...