As Pappas pushes its The Village Project, will it deflate Elk Grove's Project Elevate?

As part of Elk Grove's 76-acre civic center facilities development along Elk Grove Blvd., Houston-based Hines Interest  was awarded stat...

As part of Elk Grove's 76-acre civic center facilities development along Elk Grove Blvd., Houston-based Hines Interest was awarded status as the preferred developer of what has become known as Project Elevate. The project, a 20-acre site, could include two parking structures with 1,700 spaces, a 100-room hotel, a specialty grocer, shopping, 78,000 sq. ft of office space, and 864 apartments, of which 15 percent are mandated affordable and has development costs estimated at $600 million.

Hines was one of four companies that submitted proposals to the city for consideration. Based on recommendations from Elk Grove Economic Development Director Darrell Doan and the city's innovations czar Christopher "CJ" Jordan, the city council unanimously gave city manager Jason Behrmann authority to pursue negotiations with Hines during their August 10, 2022 meeting.

Since then, Sacramento-based Pappas Investment has proposed a competing project, complete with specialty grocer Whole Foods store adjacent to Project Elevate called The Village. Aside from increasing congestion on an already overburdened Elk Grove Blvd., if the Pappas development proceeds, it will target the same type of tenants as Project Elevate.

See the marketing brochure panels for The Village in the video posted below. 

There is, however, a back story to Project Elevate and The Village. It happened in 2017 when Doan retained the services of Arkansas-based Retail Strategies

In an email obtained in an October 2017 public records request, Doan emails a Retail Strategies employee regarding the 20-acre site that became Project Elevate, seemingly throwing shade on Pappas.

Doan's email said, "We met with Pappas today. As expected, polically [sic] we have to give them first crack at being our developer/partner but I think there will be a way to bring in another group (Sywest) that can help get it right. We are going to perfect the RFP/RFQ for a week or so and then ask Pappas to develop their proposal for our consideration. Stay tuned…"   

Undoubtedly the Pappas organization is aware of Doan's comments. It, however, does raise interesting questions.

Why was Doan opposed to Pappas, who, if nothing else, has enjoyed oversized influence in the development of Elk Grove and over every Elk Grove City council member? Furthermore, Pappas has been the beneficiary of multiple multi-million dollar taxpayer giveaways.

Undoubtedly with their influence and Rolodex of clients, Pappas' project will proceed. When it does, how will this influence the development of Project Elevate, which might become Project Deflate?

And it bears repeating, if both projects proceed, this much is certain - if you think traffic congestion on that stretch of Elk Grove Blvd. is a nightmare today, you ain't seen anything yet!    

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D.J. Blutarsky said...

First of all, we all know Pappas is no dummy. He has been using taxpayer dollars for years to help underwrite the costs of his projects and they have paid off handsomely for him. The fact that he walked away from Project Elevate tells me there was something in the plans that won't pencil out for him--even with the expected massive subsidies the city will throw at it.

Maybe having to construct two parking structures, a hotel, and an 864-unit apartment project with 15% affordable are the deal killers for Pappas? Is Pappas the proverbial canary in the coal mine for Elk Grove?

When Pappas runs away from a City project, maybe we should grab onto our pocketbooks and prepare for the next boondoggle on our dime!

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