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Economic realities change plans for Rice Village project
  
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By MICHAEL REED
Despite some hold ups in financing, Randall Davis said he expects to break ground in Rice Village on the Sonoma development in February.
However, he said in an e-mail Monday, because obtaining a loan for the high-end condo over retail project would necessitate starting Phase 2 of the project first, “sales will have to be consolidated from Phase 1 to Phase 2.”
And, thus far, the developer said he has not begun asking those who have already opted to buy units in Phase 1 to switch their commitment to Phase 2.
Walgreens stands where Phase 2 is planned at 5313 Kelvin Drive and has a lease that will end in January.
Davis is currently negotiating for a $70 million loan with a 40 percent equity and hoping the more than 50 percent presales of 125 units from Phase 1 will be looked on favorably by potential lenders. The second phase will contain 85 units.
Davis and property owner Lamesa Corp. originally tried to obtain a $100 million loan, with 30 percent equity for Phase 1, but were unable to gain backing due to market conditions.
A phone call to Lamesa had not been returned by Tuesday morning.
Units from the first phase of Sonoma were offered in May 2007 through an e-mail promotion that asked for $4,000 option deposits, which entitled the buyer to select a unit and receive $25,000 off the sales price.
Unit sizes were advertised as ranging from as a little less that 1,100 square feet to more 3,800 square feet, and choices of two to four bedroom configurations were available.
“If we receive 120 deposits,” the May e-mail said, “it will trigger the release of Phase 2, adding another 100 residences to the development.”
At least three e-mails from Sonoma, the most recent dated Aug. 18, said heavy equipment would soon be moving to the corner of Bolsover and Morningside Drive, because “primary lender had signed and (a) secondary lender is formalizing.”
It said a formal announcement of the groundbreaking would soon follow.
The building where Phase 1 is planned formerly stood in the 2400 block of Bolsover Street, containing Nit Noi restaurant and other businesses. It was demolished in October 2007, following a lengthy battle over the abandonment of that roadway and traffic concerns.
In June 2007, the city of Houston refused to release documents associated with the two appraisals of the property that were used to determine a sales price, citing confidentiality related to the negotiating process.
The city withdrew its objection and released appraisals that were 60 percent apart in fair market value with one coming in at slightly more than $1.46 million, or $60 a square foot, the other at a little more than $913,000, or $35 a square foot.
In August, the Public Works Department set a price of $1.74 million, or a little more than $60 a square foot.
However, he said in an e-mail Monday, because obtaining a loan for the high-end condo over retail project would necessitate starting Phase 2 of the project first, “sales will have to be consolidated from Phase 1 to Phase 2.”
And, thus far, the developer said he has not begun asking those who have already opted to buy units in Phase 1 to switch their commitment to Phase 2.
Walgreens stands where Phase 2 is planned at 5313 Kelvin Drive and has a lease that will end in January.
Davis is currently negotiating for a $70 million loan with a 40 percent equity and hoping the more than 50 percent presales of 125 units from Phase 1 will be looked on favorably by potential lenders. The second phase will contain 85 units.
Davis and property owner Lamesa Corp. originally tried to obtain a $100 million loan, with 30 percent equity for Phase 1, but were unable to gain backing due to market conditions.
A phone call to Lamesa had not been returned by Tuesday morning.
Units from the first phase of Sonoma were offered in May 2007 through an e-mail promotion that asked for $4,000 option deposits, which entitled the buyer to select a unit and receive $25,000 off the sales price.
Unit sizes were advertised as ranging from as a little less that 1,100 square feet to more 3,800 square feet, and choices of two to four bedroom configurations were available.
“If we receive 120 deposits,” the May e-mail said, “it will trigger the release of Phase 2, adding another 100 residences to the development.”
At least three e-mails from Sonoma, the most recent dated Aug. 18, said heavy equipment would soon be moving to the corner of Bolsover and Morningside Drive, because “primary lender had signed and (a) secondary lender is formalizing.”
It said a formal announcement of the groundbreaking would soon follow.
The building where Phase 1 is planned formerly stood in the 2400 block of Bolsover Street, containing Nit Noi restaurant and other businesses. It was demolished in October 2007, following a lengthy battle over the abandonment of that roadway and traffic concerns.
In June 2007, the city of Houston refused to release documents associated with the two appraisals of the property that were used to determine a sales price, citing confidentiality related to the negotiating process.
The city withdrew its objection and released appraisals that were 60 percent apart in fair market value with one coming in at slightly more than $1.46 million, or $60 a square foot, the other at a little more than $913,000, or $35 a square foot.
In August, the Public Works Department set a price of $1.74 million, or a little more than $60 a square foot.
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