Thursday, February 15, 2007

Saca Defaults on Loan

From the Sacramento Bee:

Developer John Saca Wednesday said he has defaulted on a $22 million loan he used to buy the downtown land where he broke ground last year for two 53-story condominium and hotel towers.

The default -- the first step in a foreclosure -- doesn't necessarily mean the development is dead. Rather, it's a public exposure of the months-long private struggle between Saca and his equity partner in the Towers, the giant California Public Employees' Retirement System -- CalPERS.

Construction on the prominent site at Third Street and Capitol Mall stopped in January, leaving a hole in the ground, studded with piles, a few blocks down from the Capitol.
...
"This predicament is out of my control," Saca said. "If it were my choice, all the outstanding invoices would be paid immediately. I have proposed several alternatives to my partner on how we can pay these bills; however, none have been accepted."

Saca went on to say that he's "not sure (CalPERS is) the right partner for this project."
...
"Projects of this magnitude have their ups and downs," Saca said. "I am very confident that this project is going to succeed consistent with the vision that has rightfully excited this community."

Also, the city of Sacramento is suing Saca over his K Street development project, which includes plans for 30-story housing towers.

3 comments:

Patient Renter said...

Notice all of the positive responses in the Bee comments, a lot of stuff along the lines of "Don't give up on your dreams, John". Give me a break. I'm sure he's building this without any regard to profit.

# said...

"Saca went on to say that he's "not sure (CalPERS is) the right partner for this project.""

ouch!

Perfect Storm said...

Saca says the problems is that construction costs have risen. The only problem is is that he estimated costs like an idiot.

I think his true intentions was to screw over the lenders by proposing a budget and then when he blew the budget with half built towers they would have no choice, but to send him more cash to finish. CalPers should sue his axx.