The City and David Taylor paid for the project in large part byselling $96 million in 30-year revenue bonds in 1999. In addition,the city contributed a 700-space parking garage at 13th and $8million in cash while Taylor and his partners contributed thehistoric Sacramento Public Market building at 13th and J streets,which now houses the public spaces and meeting rooms of thehotel.

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David Taylor Interests COO Roger Kittredge tells GlobeSt.comthat through the first three months of 2008 the hotel produced anaverage daily room rate of $158.26, revenue per available room of$114.66 and an average occupancy of 72.5%. The same year-earlierperiod saw revPAR and ADR both 5% higher. Average occupancy wasalso down, falling to 72.5% from 76.5% in the first quarter of2007.

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Kittredge attributed the slowdown to the slowdown in theeconomy. "But it's a great property with really good potential," hesays, "It is well positioned in the market as one of only twofour-star hotels adjacent to the convention center," Kittredgesays. "When the economy comes back you'll see all these numbers goup and it will hit the project performance targets."

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The hotel is located in the city's entertainment district, whichincludes an IMAX Theater, the Community Center Theater, PyramidBrewery and other restaurants, the Crest Theater, and the upcomingCosmopolitan Cabaret. The hotel has been generating $3.4 million intax revenue for the city annually, which means the city's initialcash investment was paid off in less than three years. With a sale,the city's tax revenue from the development is expected to rise to$4 million annually.

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City officials says most of the $47 million in sale proceedswill be used, in part, to spark further Downtown redevelopment.Mayor Heather Fargo says it has been estimated that the projectsfunded by the proceeds will have the potential to stimulate $100million in additional investment in Downtown.

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Kittredge confirms that half of the proceeds are earmarked foradditional projects along J, K and L streets by David Taylor andCIM Group. The duo is currently in the process of evaluatingpotential projects and is required to bring the first project tothe city by the end of the year.

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David Taylor says the future development will occur on a mix ofowned and controlled parcels, as well as properties yet to be putunder the city's control. Nearby, at 10th Avenue and K Street, thecompany is converting an old Woolworth's into a cabaret theater andrestaurant. In April, the company finished a 25-story office towerat 621 Capitol Mall in Denver. The 360,000-sf office project is 45%pre-leased with two leases out for signature that would take thattotal to 68%, Kittredge says.

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