Not so affordable

Plans are underway to transform the historic Capitol Park Hotel into a 134-unit affordable housing development. But it’s coming at double the cost per square foot of a companion project, thanks to the old hotel’s price tag.

The Sacramento County Board of Supervisors voted unanimously January 29 to work with developer Mercy Housing Corporation and the Sacramento Housing and Redevelopment Agency to apply for $9.7 million in state funding toward the project.

Before voting, however, Supervisor Susan Peters noted the $847 cost per square foot to transform the 180-unit single-room occupancy hotel into the 134-unit affordable housing project. Peterson was comparing that to the $396 cost per square foot for another affordable housing project, Sunrise Pointe in Citrus Heights.

SHRA Assistant Director Christine Weichert explained that the discrepancy was due to the approximate $10 million cost to acquire the hotel and that the Sunrise Pointe project is being built on vacant land.

According to county and state records, the Capitol Park Hotel is currently owned by Rohenco, Inc., whose owners Ron and Irene Henry battled with the city last year to try to demolish three historic houses on 21st Street. Those plans were later scrapped after push-back from local preservationists.

No preservationists voiced any concerns about Capitol Park Hotel, with Supervisor Don Nottoli questioning if other historic hotels in the county could be transformed.

“Why wouldn’t we go out there and try and help put these deals together and actually be the catalyst?” Nottoli said. “I don’t want to sit around and wait for people to submit an application to me.”

State funding awards are expected to be announced in May. While more than 60 percent of the Capitol Park Hotel project’s $51.5 million cost is slated to be covered by tax credits, a $7.9 million funding gap remains, according to a project document.