Jamboree to Restore Historic Hotel Berry For Downtown Sacramento Revitalization

Irvine, CA – Jamboree Housing Corporation, a leading developer of affordable housing in California, today announced the start of the complete renovation and modernization of the historic Hotel Berry, an important downtown landmark in Sacramento, California.

This is Jamboree’s first mixed use development in Sacramento and its eleventh development in Sacramento County. The total modernization of the 1920’s vintage hotel, located two blocks from the State Capitol building and Capitol Park to the East, and four blocks from historic Old Sacramento to the West, is being completed in partnership with the Sacramento Housing and Redevelopment Agency (SHRA), which has been integral in initiating the project and developing innovative funding sources. The property is slated for completion in February of 2012.

“The Hotel Berry restoration represents an exciting and growing trend: the reawakening of historical and cultural interests in mature communities across America,” says Laura Archuleta, president of Jamboree, one of California’s largest active affordable housing developers. “Properties such as the Hotel Berry offer unique opportunities to reconnect to a sense of place and perspective.”

This renewed interest in local culture and heritage, coupled with diminishing land resources, is compelling cities to redevelop and rehabilitate aging housing and commercial or industrial structures. It's a chance to re- energize neighborhoods in cities large and small; to breathe new life into old properties and places while providing vital services and stable, affordable housing opportunities to residents.

Located at 729 L Street near 7th Street, in the heart of downtown Sacramento, the Hotel Berry has been an historic presence in the City’s central business district since it opened in 1929, the year the Great Depression began. And, since it has outlived those challenging times and others, this upcoming renovation – complete with a full seismic retrofit – may be a sign that better times are ahead for the downtown area.

“This restoration aligns perfectly with one of our major priorities for the coming year – the revitalization of our downtown core,” says Kevin Johnson, Mayor of Sacramento. “Because of this and other developments, we’re finally making legitimate progress. Instead of just talking about revitalization, we’re seeing it happen. I’m also pleased to see that it meets or exceeds many of our ‘green’ standards, yet another vital priority to the Sacramento region.”

Originally part of a hotel system developed and managed by brothers B. S. & Harry Berry of San Francisco, the Berry was popular with travelers and politicos alike. Strategically placed in the vibrant business and shopping district centered on adjacent K Street, the Class “A” building featured a luxurious “Mission Style” lobby, and opened near the conclusion of the 1920s construction boom at a cost of $300,000. The mixed use neighborhood west of  the State Capitol featured department stores, family-run businesses and theaters alongside residence hotels such as the Berry, the Sacramento, the Clunie, the Clayton and the Land. Today, very few of these historic properties remain.

Following World War II, Sacramento’s population began a shift away from the city center to the suburbs. The hotel business also experienced a transition, as chain properties and roadside motels began to dominate the industry. Wholesale redevelopment of the downtown area in the 1950s and 1960s razed entire city blocks – including several along the former M Street (now Capitol Mall), one block from the Berry – to provide a greenbelt leading to the Capitol and more office space for state agencies. Since most downtown rooming houses also fell to the wrecking ball, hotels such as the Berry absorbed these residents in order to survive, and soon transitioned almost entirely to a monthly clientele.

By the 1970s and 1980s, urban blight was a major issue across the United States, and Sacramento was no exception. The Hotel Berry experienced hard times as well. For the next two decades, it fell further into disrepair as it provided basic shelter to a transient population struggling to make ends meet.

In late 2007, The Hotel Berry was purchased by The Trinity Housing Foundation. Trinity, in partnership with The AF Evans Company, intended to undertake a substantial rehabilitation of the property using a combination of SHRA funds and federal 9% Low Income Housing Credits (LIHTC). In April of 2008, the partnership’s tax credit application was successful, and they received an award valued at more than $13 million, which represented more than half of the projected $21 million budget.

Upon receiving the award, AF Evans and SHRA actively sought a tax credit equity investor and construction lender. Since renovation was scheduled to commence in December of 2008, the relocation of existing residents also began, and the hotel’s occupancy soon dropped to 50%, further exacerbating a chronic operating deficit. Unfortunately, due primarily to the nationwide financial crisis, the project received very little interest from the investment community, and Trinity/AF Evans eventually returned the tax credits to the state. Finally, since the partnership lacked the resources to complete the renovation or to continue to operate the Berry, SHRA purchased it for $1 in March of 2009. Norwood Avenue Housing Corporation, the nonprofit public benefit corporation affiliated with SHRA, then applied for and received a federal 9% LIHTC allocation and the American Recovery and Reinvestment Act (ARRA) exchange funds. Through a Request for Qualification process issued by SHRA, Jamboree was selected as the developer.

In December of 2010, Jamboree secured all financing, including loans from SHRA, and closed on the now- vacant property, renewing hope that the Hotel Berry would finally return to its former prominence.

“This complex renovation is just one creative example of what an effective public-private collaboration with partners such as Jamboree can accomplish in urban and infill redevelopment,” said La Shelle Dozier, Executive Director, SHRA. “This is exactly the sort of preservation development we love to support. We’ve worked hard to make this happen. It moves forward our ongoing commitment to quality affordable housing for all of Sacramento’s residents – and for our downtown residents in particular.”

Though not currently on the Historical Building Register, the Hotel Berry will be renovated retaining all historical marquees – including a four-story sign and a full wall mural – awnings, window size and location, and roof details.

The ambitious renovation plan includes two-bay steel braced frames, foundations and soft story bracing, wall anchorage, plywood floor sheathing, brick repointing, corner strengthening, and roof parapet bracing. It also provides for a new and larger domestic water storage tank, boiler, new chiller and fans. The seismic retrofit, elevator upgrades and new staircase throughout will bring the building up to code.

The Studios at Hotel Berry will be available to individuals earning between 30-45% of the Area Median Income. The completed six-story property will feature 104 Single Room Occupancy (SRO) studios including a manager’s unit and retail space for a convenience store located on the ground floor. With a 10-year presence in the neighborhood, this small family-owned business received assistance from SHRA and will be returning to lease a renovated retail space in The Studios at Hotel Berry.

In addition, through funding provided under the Mental Health Services Act (MHSA), ten of these studios will be set aside for residents who will receive supportive services through the Sacramento County Health Care Agency’s full service provider, Transitional Living and Community Support (TLCS). TLCS’s full-time onsite resident services coordinator will assist residents with 24/7 availability for support of daily living activities and link them to other supportive and independent living services. This handful of residents at The Studios at Hotel Berry will benefit from TLCS’s SRO Collaborative, a movement centered in the heart of the downtown’s business district that is a combined effort of the entire community including the Downtown Partnership, local businesses, residents, faith- based organizations, and a number of service providers.

“Moving forward, our goal is to designate at least 10% of the units at each of our new properties to people with special needs,” says Archuleta. “These are folks already living in our community and permanent supportive housing is critical to providing stability for them.”

"The Studios at Hotel Berry will have a positive impact on much more than the residents,” she adds. “High quality affordable housing is good for the environment, the economy and local communities, and this development will exceed our most rigorous standards in each category."

Demographically, this is a prime area for affordable rental studios, specifically the SRO style to be offered in the revitalized Hotel Berry. The downtown resident population is dominated by single-person renters, more than half of whom have annual household incomes below $25,000. Many of these are seniors, and half of these residents don’t own a vehicle.

Another significant achievement of the property is its Transit Oriented Development (TOD) strategy. The building falls within easy walking distance of several modes of transportation, including light rail, bus lines and an Amtrak rail station.

The financial structure for the development also required a good deal of creativity. SHRA’s innovative funding strategy successfully layered local and federal support, and is pioneering in terms of use of exchange of tax credit equity funding with ARRA grant funds totaling $13.6 million in permanent financing. SHRA is contributing $10.1 million in permanent financing, U.S. Bank is providing $5.5 million in construction loans, and Community Resource Project, Inc. was instrumental in Jamboree receiving an allocation of $600,000 in federal weatherization funds for the $24.8 million renovation.

Bill Pavao, Executive Director of the California Tax Credit Allocation Committee (CTCAC), underscores the importance of converting the project’s tax credit equity to ARRA grant funds. Given the age of the building, the special needs component, and the condition of the tax credit equity market just a few years ago, he says the exchange makes this very complex project slightly less difficult. “How exciting to see the modernization of Hotel Berry after so many years of hard work by the city, SHRA and Jamboree. Some in our community who are so desperately underserved will soon have a place to call home in a vital and necessary area of Sacramento.”

Each studio will be fully furnished and equipped with a private bathroom, ceiling fan and kitchenette. All residents will also have access to a community kitchen, dining area, meeting rooms, laundry facilities, lounge, and recreation room with a small kitchen, computer room and a 24-hour reception desk in the lobby.

In keeping with Jamboree’s commitment to sustainability, The Studios at Hotel Berry feature water-saving fixtures in kitchens and bathrooms, CRI Green Label carpeting, and low-VOC interior paint and adhesives. It will exceed Title 24 energy efficiency standards by more than 15%.

Gelfand Partners Architects provided the architectural design, and Precision General Commercial Contractors, Inc. will serve as General Contractor. Environmental Remediation will be handled by Gala Construction, Inc.

According to Thomas Dawson, president of Precision General Commercial Contractors, Inc., the six-story historic masonry structure – surrounded by a convenient rail line and the main entrance to Greyhound Lines – provides many interesting challenges for the design and construction team. A Northern California-based firm, Precision’s expertise is large-scale rehabilitations as evidenced by its portfolio of 39,000 completed units in five states, primarily in California, including the recent renovation of the Capitol Towers, a market-rate development just a few blocks from the Hotel Berry. With an eye on the bottom line, he sums up Hotel Berry’s modernization and renovation by saying, “Our work preserves another 100 years of life to a building chock-full of historic architecture and character.” That’s a good day’s work, he adds.

About Jamboree: Founded in 1990, Irvine, CA-headquartered Jamboree Housing Corporation is an award-winning, broad-based nonprofit housing development company that develops, acquires, renovates and manages permanently affordable rental and ownership housing throughout California for working families, seniors and people with special needs. Housing with HEART and HOMES Inc. are 501(c)(3) organizations and comprise Jamboree’s resident services group. A leading nonprofit developer, Jamboree is committed to sustaining excellence with high quality affordable housing that is good for the environment, the economy and local communities. It currently has about $250 million in affordable housing projects in its development pipeline and a $1 billion asset portfolio that includes the development of and/or ownership interest in 6,700 homes in more than 66 California communities. Currently, Housing with HEART programs and services that foster learning, health and community building are offered at 38 Jamboree communities with designated staff at each location. For more information, go to www.jamboreehousing.com.

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