Towers and Aura…Deal or No Deal?

February 8th, 2007 categories: Condo, Downtown, Real Estate, Sacramento

SacTowers Liberskinds Aura at 601 Capitol Mall, and Sacas twin 52 story Towers at 3rd Street & Capitol are at a standstill. No building is present and no building construction is going on.

It seems that unexpected construction costs have suddenly brought The Towers to halt further construction. “Unanticipated construction-cost increases and the need for additional capital are primary reasons for the delay in proceeding,” Saca said in a prepared statement. It is rumored that construction liens have been issued while Saca asks CalPERS to cough up more dough. The retirement association had already given $100 million toward this project and now the hands are out asking for more. Wonder how many California Employees are aware that it is their money that is funding this project and if so what do the California Employees think about giving more money. It would appear that this wasnt very well thought out. Without any signs of a shell of a building and already short of funds hmmmm Will CalPERS deal or no deal?

Those buyers who placed a $10,000 deposit in 2005 were asked in the Fall of 2005 to then put up 10% of the purchase price which would become non-refundable. The HOA dues for these condos were projected in 2005 as being $500 “ $750 per month depending on the size unit purchased as well as the floor of their purchase. Units at that time ranged from a 1 Bedroom for the mid $300,000s to a 2 Bedrooms in the mid $600,000s. Having been one of those potential buyers but changing my mind (thank heavens) I wonder how all those many buyers are feeling right now with their non-refundable money tied up and the building project placed on hold while looking for more money to actually build The Towers?

And then theres the Aura who has not started their project downtown and is Aura asking Sacramento City to play banker and fund the rest of the project. Apparently, the banks will loan only so much on a condominium project such as these so funds are needed from other sources. The City of Sacramento is being asked to be the Bank Deal or No Deal?

Although, I would love to see a new skyline for Sacramento it does make me wonder how any of these projects were ever started without what I consider responsible economic planning. It will be interesting to see how this develops and where the funds will actually come from to build these properties. And for those employees and future owners who put your money up front, I sincerely hope that you are not disappointed.

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