By Steve Marschke News-Ledger Editor
West Sacramento’s plan to
create a publicly-owned Marriott hotel near the Tower Bridge riverfront is now
treading water, after the first proposed investment package for the hotel fell
through. The project missed a chance to apply for a subsidized federal stimulus
loan.
The city is still talking
to developer Parkcrest Development Company of Sacramento, said Paul Blumberg,
West Sacramento’s public finance manager. But negotiations with Parkcrest to
develop the hotel are no longer exclusive. The project called for $100 million
in bonds, and originally included a plan for a South Korean real estate
investment company to buy all the bonds, becoming the main source of funds for
the project.
“The real issue was we
were rushing to meet a timeline to apply for funding prior to the termination
of a federal program called ‘Build America Bonds,’” said Blumberg. “The federal
government was essentially subsidizing the interest rate. It (would have)
allowed us to finance this at a much lower rate than is available in the
market.”
ARTIST'S RENDERING, courtesy of the City of West Sacramento
That didn’t happen in
time. The deadline was December.
“Parkcrest is still trying
to secure funding indirectly through the Bank of China,” said Blumberg. “The
Bank of China would be purchasing a portfolio of investments, of which this
would be one.”
Blumberg said the city was
not in advanced discussions with other potential developers.
The city hopes to be the
catalyst for development of a “300-unit hotel with a conference facility and
destination restaurant,” said Blumberg. The “River One Hotel” project is just
north of the Tower Bridge along the Sacramento River. City officials believe
some kind of public help is necessary to help build a hotel with amenities such
as dining and conference facilities. After it’s built, the taxpayers would own
the hotel – which could at some point be sold to a private company.
Blumberg told the
News-Ledger in September:
“A major part of this
hotel is the components that go with it – ballroom space, a conference center,
meeting rooms as well as a major destination restaurant overlooking the river.
It will be full-service, with a day spa and health club. It will have a major
‘business’ focus. But because of its location, it will also be able to attract
some leisure visits during the weekends.”
An acre of city-owned land
would go into the project, and the West Sacramento Financing Authority has an
“option to buy” 4.6 acres from the Raley’s Corporation for $9.6 million, in
addition. The “option” expired in December, but was extended after the city
committed to do some infrastructure work near the site that will benefit either
the hotel or whatever else goes on the Raley’s acreage.
The city has also pledged
to set-aside future hotel room taxes to help repay the proposed bonds if the
hotel doesn’t make enough money for the repayments. Officials don’t plan to
commit city general fund dollars to the project.
