Saturday, September 10, 2011

Sacramento Bee: State redevelopment lawsuit stalls Sacramento project

Redevelopment lawsuit stalls David Taylor's K Street remake in Sacramento

Published: Saturday, Sep. 10, 2011 - 12:00 am | Page 1B
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As developer David Taylor pursues a deal to build a downtown sports arena, his plans to develop another city project have hit a snag.

Earlier this year, the city tapped a team headed by Taylor to remake the 800 block of K Street, in a move to add more than 130 residential units and 32,000 square feet of retail space to an area that's been an urban eyesore for years.

But the period during which the Taylor group had exclusive right to negotiate a development deal lapsed last month.

City officials say they can't restart talks until litigation over the state's attempt to overhaul redevelopment agencies is resolved.

"We're literally fettered from sitting down to do this," said Jim Rinehart, director of the city's Economic Development Department. "But once we have the legal authorization to do so, we'll move forward."
For decades, the city has looked to remake the 700 and 800 blocks of K Street near the Westfield Downtown Plaza Shopping Center.

The redevelopment plans accelerated in July when the City Council tapped Taylor's team to rebuild the 800 block. It also named a group headed by developer Bay Miry to redo K Street's 700 block.

But government funding for these and similar projects around the state went into limbo earlier this year when Gov. Jerry Brown threatened to do away with local redevelopment agencies.

Cities later sued, saying Brown's plan is unconstitutional. The state Supreme Court has blocked the agencies' shutdown while it reviews the suit.

The K Street holdup comes as the city on Thursday unveiled its plans to finance the $387 million downtown sports arena that's to be built by a separate development group headed by Taylor.

The railyard complex, which would house the Sacramento Kings basketball team, would be funded in large part by ticket surcharges, private investment, the sale of city-owned land and the quasi-privatization of city parking.

A Taylor executive did not return calls.

The project for the 700 block of K Street is moving ahead.

Miry, developer for the 700 block, said his group plans to sign its first tenant as early as next month and that construction is scheduled to start early next year.

Miry added that his company is in the process of moving its headquarters to the historic bank building at 1011 10th St., just two blocks from the K Street project.

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