Stan & Heather's Excellent Adventure

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Thomas Enterprises has a huge development called The Rim in San Antonio and another large, mixed-use development under way in Alpharetta, north of Atlanta, but the Railyards deal, in terms of dollars, outranks them all.

Initial costs to clean up the land and put in basic services, combined with the loans, will exceed $1 billion, Thomas says. Since his is a private company, Thomas doesn’t have to disclose the final terms of the land costs, but local commercial real estate professionals estimate it to be somewhere in the $400 million to $500 million range.

When asked to make a stab at the number, Colliers’ Miller shrugs, “I have no idea. In a way, you can’t put a number on it. It’s beyond numbers.”

Heading the Thomas Enterprises’ effort in Sacramento are Suheil Totah, a former real estate attorney from the large Morrison Foerster law firm and Richard Rich, an architect whose work experience includes Jerde Development in Southern California and, before that, Walt Disney.

Totah’s focus will be blending Thomas Enterprises’ needs with city of Sacramento services. The development of the Railyards first and foremost is a private-public endeavor; the city needs a private developer to move decisively, but the developer needs the city to help pay for basic services such as streets and sewers. Totah is the linkage, and his counterpart in that effort will be Marty Hanneman, the assistant city manager.

Behind Totah is Rich, whose focus is developing the look and feel of the project. As he walks through the Railyard buildings, Rich’s excitement for the sensory experiences that will arise from their renovations is much in evidence. He talks about hearing jazz music over there, and enjoying the smells from the Italian restaurant here, the quiet clamor of people milling while the echos of a street saxophonist fill the warm summer nights.

“It is a legacy project,” Totah says, who adds it will also be a long project. “Given the magnitude of this project, it will go through many cycles.”

The city of Sacramento knew that this deal could not be done by a private developer alone. The city will help with bond monies from, among others, Measure A, to build streets and the intermodal building. The city and county also could float bonds that will be paid off by property taxes on the newly developed land — money that will accrue to the city or county once the land is actually clean, built upon and housing people and businesses. Fargo maintains that federal money for redevelopment will also be urgently sought.

The first phase of the project is expected to require moving the intermodal terminal at Sacramento Valley station to the north, costing $10 million to $20 million. That’s why a large number of city officials and Thomas Enterprise managers headed to Washington, D.C., in May to give Rep. Doris Matsui a full-court press to nudge the Federal Railroad Administration to move UP’s freight line. Still, tax monies and federal aid rarely come when needed.

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