http://www.sacbee.com/101/story/100040.html
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Thomas Enterprises wants to beat a year-end deadline to buy the 240-acre Union Pacific railyard. Plans for the downtown site include 10,000 housing units, shops and a museum, as well as a new transportation hub.
Sacramento Bee file, 2006/Bryan
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<-----Suheil Totah
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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
Story appeared in METRO section, Page B1
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.
It's a very complicated transaction," spokeswoman Deborah Pacyna said Thursday evening as Totah and other Thomas Enterprises executives participated in a lengthy conference call. "Thankfully we're down to one remaining issue, and we hope to resolve it tomorrow."
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.
"We fully expect that escrow will be closing Friday morning," Hanneman said. "We knew even today that a lot had to come together -- no one guaranteed it would happen today. This is the most complex deal our city has ever been involved in."
With Thomas Enterprises facing a year-end deadline to purchase the land from Union Pacific, the past few days have been filled with drama: City Council members called back from recess, city staff members working through their vacations, title company employees stuck in traffic and documents faxed to the recorder's office late Thursday.
Until shortly before 5 p.m., Pacyna remained uncertain whether the closing would happen Thursday or not.
"The last five days have been incredibly stressful and hectic,"
Hanneman said earlier in the day. "People worked through Christmas, you name it."
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.
Thomas Enterprises has not revealed the total price of the railyard at this point, so its share remains unknown.
"Fifty-five million was the number that Thomas Enterprises said they needed to close their gap with Union Pacific," Hanneman said.
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.
Both sides have agreed that the actual price for that land will be decided through further negotiation or -- if need be -- arbitration.
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.
Bank of America also wanted additional assurances about repayment of the note, but was willing to make sure the issue could be resolved quickly, Hanneman said.
It wasn't until two minutes before the City Council meeting convened that City Attorney Eileen Teichert said she received word that the financial institution would be satisfied with the council resolution.
The council then voted 8-1 to approve the technical change in the documents, the same margin by which it approved spending the money earlier this month.
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."
City Councilman Kevin McCarty cast the sole vote against the deal. An appraisal of the land should have been completed before the city agreed to the sale, he said.
"I don't have any problems with the project," McCarty said. "It's just when the city expends so many public dollars on a project there should be an appraisal."
==========================
Thomas Enterprises wants to beat a year-end deadline to buy the 240-acre Union Pacific railyard. Plans for the downtown site include 10,000 housing units, shops and a museum, as well as a new transportation hub.
Sacramento Bee file, 2006/Bryan
===================================
===================================
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
Story appeared in METRO section, Page B1
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.
It's a very complicated transaction," spokeswoman Deborah Pacyna said Thursday evening as Totah and other Thomas Enterprises executives participated in a lengthy conference call. "Thankfully we're down to one remaining issue, and we hope to resolve it tomorrow."
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.
"We fully expect that escrow will be closing Friday morning," Hanneman said. "We knew even today that a lot had to come together -- no one guaranteed it would happen today. This is the most complex deal our city has ever been involved in."
With Thomas Enterprises facing a year-end deadline to purchase the land from Union Pacific, the past few days have been filled with drama: City Council members called back from recess, city staff members working through their vacations, title company employees stuck in traffic and documents faxed to the recorder's office late Thursday.
Until shortly before 5 p.m., Pacyna remained uncertain whether the closing would happen Thursday or not.
"The last five days have been incredibly stressful and hectic,"
Hanneman said earlier in the day. "People worked through Christmas, you name it."
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.
Thomas Enterprises has not revealed the total price of the railyard at this point, so its share remains unknown.
"Fifty-five million was the number that Thomas Enterprises said they needed to close their gap with Union Pacific," Hanneman said.
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.
Both sides have agreed that the actual price for that land will be decided through further negotiation or -- if need be -- arbitration.
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.
Bank of America also wanted additional assurances about repayment of the note, but was willing to make sure the issue could be resolved quickly, Hanneman said.
It wasn't until two minutes before the City Council meeting convened that City Attorney Eileen Teichert said she received word that the financial institution would be satisfied with the council resolution.
The council then voted 8-1 to approve the technical change in the documents, the same margin by which it approved spending the money earlier this month.
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."
City Councilman Kevin McCarty cast the sole vote against the deal. An appraisal of the land should have been completed before the city agreed to the sale, he said.
"I don't have any problems with the project," McCarty said. "It's just when the city expends so many public dollars on a project there should be an appraisal."
About the writer:
- The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or mlvellinga@sacbee.com.
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