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SACRAMENTO, CA-The Sacramento City Council this week approved a plan for one of the largest urban infill opportunities in the nation, Union Pacific’s 240-acre railroad yard. The multi-billion, multi-phase project would transform the dormant land adjacent to Downtown into a dense mixed-use village that includes no less than 7,400 housing units, 1.2 million sf of office, 570,000 sf of retail and 42 acres of open space.

The master developer is Atlanta-based Thomas Enterprises, whose other projects include 1,500-acre mixed-use development in Orlando called the Boulevard. The company filed its development plan for the Sacramento project in June 2005 and acquired the land from Union Pacific shortly thereafter. If it ultimately happens, the redevelopment would generate approximately 19,000 jobs and push $2.7 billion into the local economy, according to a study commissioned by the city.

The plan calls for a redeveloped rail yard anchored by an intermodal transportation terminal, the historic Central Shop buildings and a Railroad Technology Museum. The Central Shop buildings, once the largest railroad maintenance facility west of the Mississippi, would become a public marketplace. The development would be linked to the Downtown via an extension of 5th and 6th streets over the relocated railroad tracks.

The initial term of the development agreement with the city is 10 years commencing upon the relocation of the railroad tracks. The agreement may be extended by as much as 20 years in five-year increments if certain benchmarks are achieved.

Thomas Enterprises may obtain a five-year extension of the initial 10-year term if the site by that time holds at least 700 residential units, 200,000 sf of office and 350,000 sf of retail. To obtain an additional five-year extension, it would need to deliver an additional 150,000 sf of retail, 500,000 sf of office and 1,000 residential units. The hurdle for a third extension is an additional 400,000 sf of office, 20,000 sf of retail and 2,700 residential units. To obtain the fourth extension, it must have added another 3,000 residential units, 50,000 sf of retail and 80,000 sf of office.

If any of the benchmarks aren’t met, Thomas could lose development rights. By the same token, Thomas may exceed the minimum requirements — 7,400 housing units, 1.2 million sf of office and 570,000 sf of retail — by between 50% and 100%. According to the Specific Plan, the site can hold a maximum of 12,100 residential units, 2.4 million sf of office, 1.4 million sf of retail/commercial space, 900,000 sf of other types of space (including cultural and historic), and 1,100 hotel rooms. A Thomas Enterprises development executive was not immediately available Friday afternoon for comment.

As for the cost, public documents say $745 million is needed just for basic infrastructure such as streets, sewers and utilities over the next several years. The city and its redevelopment agency have committed $222 million, of which $80 million is tax increment financing. To supplement, the City and Thomas will apply to receive $150 million over the next three years from Proposition 1C, the state housing bond. Development-related fees would cover another $169 million of the cost. Other regional, state and federal funding is expected to total $74 million, leaving approximately $130 million to come from other unidentified sources.

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