12/29/2006

If you are following the drama surrounding the Sacramento Railyard it continues in the news today.

From today's Sacramento Bee:

Drama, but no deal yet
Developer hopes to close escrow today on the railyard site.
By Mary Lynne Vellinga and Terri Hardy - Bee Staff Writers
Published 12:00 am PST Friday, December 29, 2006

"As the sun set on Sacramento Thursday, Suheil Totah remained ensconced in his brightly lit office overlooking the dark and empty downtown railyard, his ear pressed to the phone as he tried to resolve a last-minute issue holding up his company's purchase of the 240-acre site from Union Pacific.
Reporters and camera crews waited in the chilly air below for an announcement that the purchase was complete. But the announcement never came.
Despite a day of nonstop action that included a special Sacramento City Council meeting, Georgia-based developer Thomas Enterprises was unable to close escrow on the railyard by the end of Thursday.
.........
Pacyna wouldn't disclose what the issue was, and Assistant City Manager Marty Hanneman said he didn't know. But he said he was confident it wasn't a deal breaker for one of the most important real estate transactions in Sacramento's history -- one that could double the size of downtown with 10,000 housing units, offices, shops, a museum and a new transportation hub.
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The city has waited for years for someone to buy the dormant railyard.
City Council members came back from their break for a special meeting Thursday in order to make sure that Thomas Enterprises would have in hand $55 million in city funds the developer needs to close the deal.
The money -- $30 million in cash and a $25 million note -- was wired to Thomas Enterprises Thursday morning so it could be paid to Omaha, Neb.-based Union Pacific.
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For its $55 million contribution -- most of which comes from the county's Measure A transportation sales tax -- the city gets immediate title to the historic train depot and 8 surrounding acres.
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The City Council approved the $55 million expenditure earlier this month, but members were nonetheless pulled back Thursday for a special session after a snafu involving the lender that was purchasing the $25 million note from Thomas Enterprises.
Comerica Bank said it needed more details about the city's sources of repayment. Needing to get the issue resolved quickly, City Treasurer Tom Friery, away in Arizona, called Bank of America, which handles much of the city's business to see if it would buy the note instead, Hanneman said.
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If the price for the depot and the surrounding acreage turns out to be less than $55 million, as is very likely, the city will apply the money to the purchase of 24 additional acres it has agreed to buy from Thomas Enterprises for a future transportation complex, Hanneman said.
Any money left over from that purchase will be put toward the $40 million cost -- also being borne by the city -- of moving the freight and passenger tracks about 300 feet to the north to accommodate the new transportation center.
"We have not agreed to pay $55 million (for the depot) -- we've agreed to pay fair market value," said Sacramento City Councilman Steve Cohn. "(Thomas) believes it's $55 million, and we don't believe it's anywhere near that amount. ... This was just a way of showing Thomas how serious we were."........
For the complete story see: http://www.sacbee.com/101/v-print/story/100040.html