Sacramento redevelopment alive and thriving

Sept. 19, 2012

Katy Grimes: All cities go through ebbs and flows of building, development, and restoration of historical buildings. Some cities are much better at general planning, and decisions of restoration and renovation. Saccramento is not one of those.

After receiving 50,000 applications for the newly restored 1920s vintage Hotel Berry, which now features 115 low-income studio apartments, the Sacramento Housing and Redevelopment Agency is apparently alive and thriving.

“The building retains original marquees, signs, awnings and roof details, but the $24 million project included extensive seismic upgrades,” reported the Sacramento Business Journal.

Isn’t that special… it should be after SHRA spent $316,000 per unit to renovate the hotel into Section 8 housing.

Hotel Berry

In 2009, the Sacramento City Council authorized the purchase of the old hotel Berry – one of the city’s single room occupancy hotels. SRO hotels were known as the last stop, last resort rooming houses, before one landed on skid row.

But the Hotel Berry wasn’t always a dive. Built in 1929, the Hotel Berry was a happening hotel well into the 1950’s, used by lobbyists and Capitol businessmen. But only a couple of decades later, the hotel was largely a transient flop house.

SHRA

In 1981, the Sacramento Housing and Redevelopment Agency came on the scene and began its takeover of many of the city’s old hotels.

In 2007, a non-profit low-income housing developer bought the hotel, and began the massive renovation of turning the former hotel rooms into affordable housing units and ADA accessible units. The developer, AF Evans, applied for Tax Credit Allocation Committee low-income housing bonds, to make the project financially feasible.

But the economy tanked shortly after the purchase, and the bonds could not be sold. After AF Evans tried to hold on to the old hotel, and maintain it, they could not and in swooped the Sacramento Housing and Redevelopment Agency, whivh purchased the hotel for $1.

SHRA could not keep the dilapidated hotel open, nor could they justify the $13 million renovation. So they closed the hotel.

By 2011, the Sacramento Housing and Redevelopment Agency officials announced that they had joined affordable housing developer Jamboree Housing Corporation in a $25 million project to renovate the Hotel Berry.

According to the redevelopment agency, “SHRA assisted the $25 million project with $9.6 million in redevelopment housing funds and $450,000 in funding from the Mental Health Services Act.  Supportive services will be provided by Transitional Living and Community Support. The project also received a one-time grant award of $13.5 million from the federal American Recovery and Reinvestment  Act through the California Tax Credit Allocation Committee. Other funding includes $5.5 million from U.S. Bank and $500,000 in federal weatherization funds from the Community Resource Project, Inc.”

All of the contractors were highest-cost, union labor.

Can you say, “taxpayer boondoggle?”

But it gets better.

While there is still a glut of condos for sale in Sacramento, our redevelopment agency went ahead and approved taxpayer-funds totalling $316,000 per unit, for low-income housing.

It would have made much more sense for SHRA to have bought up all of the cheap condos for sale, and given them to the entire homeless population and Occupy protestors in Sacramento.

There is also a glut of single residence occupancy, flop house hotels in downtown Sacramento. The folks who live in these hotels drive away business as they wander the K Street Mall throughout the day.

Another boondoggle

Who could forget the overpriced Maydestone apartments renovation which also cost taxpayers more than $300,000 per unit to renovate?

I am not sure if all 32 employees on the SHRA staff are still employed there enjoying salaries of more than $100,000 per year, or if the agency was downsized when Gov. Jerry Brown decreed the end of redevelopment in California. Pfffft.

The executive staff has not changed at all, and after Sacramento landed the former director of the California Redevelopment Agency, John Shirey, as its City Manager, I didn’t expect anything to change in the state Capitol.

But $300,000 renovations for low-income studio apartments is nothing more than government rubbing taxpayers’ faces in the waste, abuse and probably fraud, that clearly is still going on. It pays to be a homeless vagrant in Sacramento.

I am taking bets on how long it will take for these $300,000 renovated units to be trashed. But don’t worry — then they will need more taxpayer renovations. It’s like free money… and another important reason to vote.

5 comments

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  1. NTHEOC
    NTHEOC 19 September, 2012, 20:26

    I’m so glad I live NTHEOC!!!!!!! That’s “ORANGE COUNTY”!!

    Reply this comment
  2. Rex the Wonder Dog!
    Rex the Wonder Dog! 20 September, 2012, 01:08

    Isn’t that special… it should be after SHRA spent $316,000 per unit to renovate the hotel into Section 8 housing.

    When I was a commercial RE broker back in the 1990’s we were selling bank owned apartments at $7K-$15K per door, the buyer would spend anywhere from $1K-$15K renovating the units and would have a fully renovated, prime, sweet units for $30K or less. AT the same time the local muni was building “affordable housing” at $135K per unit.

    Reply this comment
  3. Hondo
    Hondo 20 September, 2012, 08:53

    Thanks Rex for making my point. Also you have to balance the costs of renovation versus demolition. As a former firefighter I know many of these old buildings are fire traps with no fire stops in the walls and poorly designed escapes. I could go on for another 2000 words but to shorten it I’ll say it is so much cheaper to tear the building down and put up a new one with all the modern bells and whistles and fire improvements.
    Historic preservation should be more cost effective or scrapped.
    Hondo…….

    Reply this comment
  4. Hondo
    Hondo 20 September, 2012, 09:09

    Or we could do what sheriff Joe does down in Arizona. Let the homeless live in tents and cots for free. Or let them stay at the Kings stadium and clean up the place after the games.
    Hondo……

    Reply this comment
  5. Bob R
    Bob R 25 September, 2012, 09:57

    I might be able to stomach the high costs for doing all that retrofitting stuff for a “historic” old building. Many cities pride themselves on spending a few extra bucks to preserve old structures & honor their past. But I have to draw the line on these excessive per-unit rehab costs for affordable housing in the city center. I’m fine providing housing for working folks so they can be close to their low-paying jobs. But this doesn’t make much sense. As long as we have other parts of this state with a glut of taxpayer funded affordable housing projects in RURAL areas, we should think long and hard about whether people who aren’t working (sorry, seniors…) need to stay in high-cost areas in high-cost units on the taxpayer dime. Sorry to sound harsh; but that’s just reality. The piggy bank is pretty empty these days.

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