So I drive by the construction in downtown Sunnyvale quite often, I’ve been noticing nothing has been going on the last couple months. Weeds growing on the property, Workers not present, rust staining the sides of new construction, etc...
This article is a week old...did a search and couldn't find a thread. But I think a $750 Million dollar project that has been halted for five months is relevant to...SRS
...sorry had to.I found this today:
Quote:
SUNNYVALE — Fears of foreclosure on Sunnyvale Town Center loom as developers have failed to meet the June 24 deadline to repay their $108 million loan or find another investor.
Since work stopped almost midway through construction in February, developers Sand Hill Property Co. and RREEF have struggled to obtain a $391 million construction loan to restart the $750 million project.
Peter Pau, president of San Mateo-based Sand Hill, said he had little information about the project’s status because he is not involved in the latest negotiations.
“I want to continue the project in some fashion — so should the bank and so should everyone else,” Pau said. “Somebody has to come up with money to finish the project. I’m sitting here with no capital and no funding, just this project.”
Sunnyvale officials hope that Pau remains with the Town Center project.
“We know Peter, we have worked with him from the beginning,” said Connie Verceles, the city’s economic development manager. “It’s beneficial to the project to have someone who knows it.”
The massive development sprawls across 34 acres and calls for 300 housing units, 315,000 square feet of office space, a 200-room hotel and 1 million square feet of retail stores, including a movie theater. At its height, Pau said the project employed 300 construction workers and roughly 100 in the office. Now the construction site is all but abandoned.
Shopping the loan?
Lenders Wachovia Bank and Bank of America Corp. had given developers 90 days to work out the financial problems on the $108 million loan that technically was due last August. As the June 24 deadline approached, Eastdil Secured, a subsidiary of Wells Fargo Bank, was hired to sell the loan in an effort to inject cash into the project, according to a source with knowledge of the project. Eastdil did not return calls for comment.
Mayura Hooper, a representative from the global real estate investment trust RREEF, which partnered with Sand Hill in 2007 to build the project, said in an e-mail: “We are negotiating with lenders to work out the best solution for the fund.”
Hooper, who is the media vice president for RREEF’s owner Deutsche Bank, would not talk about the possibility of a foreclosure.
Given the size of the project, Sunnyvale Town Center has generated concern across the region. Even U.S. Rep. Zoe Lofgren, D-San Jose, wrote to the banks in early May asking them to loosen their purse strings.
In a reply to Lofgren dated May 13, Wachovia’s managing director Peter Haley did not hold out much hope. “Given current market conditions, it will be difficult for any lender, at this time, to provide construction financing without a significant infusion of additional equity,” he said.
Haley called the amount needed “substantial” and described the effort as “not financially viable under the current market conditions.”
What that means to the project is unclear.
Mall’s direction uncertain
Meanwhile, Sunnyvale City Manager Gary Luebbers has been talking almost daily with Target Corp. representatives, as well as RREEF, about opening its huge store, located on the edge of the center. RREEF is involved because the streets, sidewalks, parking structure and lights are part of the overall development. Upgrades to the streets, which include Mathilda, Sunnyvale and McKinley avenues, are estimated to cost as much as $8 million. Details are still being negotiated among Target, RREEF and the city regarding who pays for what.
“We’ve got to fashion a plan that allows RREEF to invest money into the improvements,” Luebbers said. “The negotiations are tug, pull, tug, pull, tug, pull. Hopefully no one falls in the water and everyone is a winner in the end.”
Given the uncertainty surrounding the rest of the center, Luebbers described Target, which owns its building, as taking a “cautious businesslike approach.” Luebbers said the retailer only opens stores on three days of the year, and Nov. 15 is the day Target has chosen. To make the deadline, Target already pulled the trigger on stocking merchandise to fill the shelves of the new 173,000-square-foot store.
He believes that the project will be far more attractive once Target is open and Macy’s, which also owns its store, finishes remodeling.
Regarding the overall project, Luebbers said the city has little sway over what happens next.
“The value of the property has decreased, and no one knows what it is worth,” Luebbers said. “I know they are going through property tax negotiations with the county assessor.”
The city manager said problems arose when retailers who had signed letters of intent backed out.
“All the retailers are either closing or not expanding, so the letters of intent aren’t any good and the developers can’t borrow against the leases,” he said.
Luebbers said the developers are certainly not alone as projects up and down the West Coast are in trouble because of the economic recession.
Pau agreed.
“It’s a total shutdown, no matter what kind of project, no matter who you are. Everybody is treated the same,” Pau said. “All development is going away for a while all over the Bay Area — no hotels, office, shopping centers or apartments.”
Pau has other projects around the South Bay, including a just-approved medical office in Los Gatos, that are also stalled as he waits for the credit markets to thaw.
But Luebbers said he has been heartened by assurances from retailers that Sunnyvale remains an attractive place to do business.
“I talked to a tenant, one of the next largest businesses outside of Target, and the real question I asked was: ‘Are you still interested in Sunnyvale, and do you still plan on opening once the market changes?’ The answer was that they came to Sunnyvale because of the demographics, and they will be right in front of the line when it changes.”
http://sanjose.bizjournals.com/sanjose/s....
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That's ****ing hilarious. I worked in Sunnyvale for 7 years, so I know the place they are talking about. "Downtown" Sunnyvale? It's a ****ing ghost town.
What did they think? Build it and they will come? There's no one to come to it.
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Target practice from flyovers at the base. Problem solved.
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They probably didn't know about the hellmouth.
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I lived in Sunnyvale as well... 25 years ago (man, I am getting old). I don't recall that there was a "Downtown" Sunnyvale. There was a little Mall that was called the Sunnyvale Town Center as I recall... we used to call it the Funnyvale Clown Center. There was a cajun restaurant in there (or near there, can't recall) where you could get alligator. And there were some really old houses just north and east of there - I recall one area where there were a few old homes with even older Italian immigrants living in them. They had some beautiful gardens with all kinds of veggies - I'll bet that's all gone now.
It's a pity: That whole Santa Clara valley has some of the best soil in the US. One of the most fertile areas in the world and a great climate for growing just about anything.... and they had to go and pave it all over. I say plow up this failed development and make it into a big community garden.
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Quote:
Haley called the amount needed “substantial” and described the effort as “not financially viable under the current market conditions.”
What that means to the project is unclear.
Mall’s direction uncertain
Time to pay the fire insurance premium and hire a firebug.
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