City Council Poised to Approve $4 Million Land Deal With CenterCal for Elk Grove’s “Project Elevate”
 |
| Artistic renderings, Project Elevate, June 2025. | |
 |
| Project Elevate August 2022 artistic renderings. | |
Is $4 million a taxpayer giveaway?
According to research conducted on ChatGPT, the city is providing a bargain for CenterCal to develop Project Elevate.
This is the analysis of the purchase price compared to other parcels:
Countywide averages run $350,306 per acre. landsearch.com"The city’s price works out to roughly $196,000 per gross acre, or about $235,000 per developable acre (17 acres of the site can be built upon). By comparison, active commercial land listings in Elk Grove average $326,700 per acre. landsearch.com
A recent 0.84- to 1.63-acre commercial offering on Waterman Road is priced between $805,000 and $1.07 million per acre. loopnet.comEven after adjusting for the city’s obligation to relocate utilities and its right to claw back the land if benchmarks are missed, the sale sits 25-40 percent below prevailing market metrics—raising questions about whether taxpayers are leaving money on the table."
If approved, CenterCal would begin the entitlement process this summer. Closing could occur as soon as late 2027, but the developer can extend that date to 2032 by exercising all five extensions, provided that “commercially reasonable” progress continues.
Skeptics counter that the discounted land price resembles a subsidy and that Elk Grove’s history of unanimous votes breeds complacency. History shows that if an item is placed on the city council agenda, it is as good as approved. 
#8647 #NoKings #ProDemocracy
Posts
2 comments
So let me see if i got this right:
The developer locks in a 2025 purchase price that is already 25-40% below current market value (thank you EG taxpayers!) with a $200,000 REFUNDABLE deposit.
Developer can stretch out the option to buy for up to 5 years with a total outlay of $500,000 in deposits plus the initial $200,000--all being applied to the $4 million purchase price.
If stetched out to the maximum timeframe--in 2029, Developer can purchase the property by paying an additional net balance due of $3.3 million.
Then without even lifting a shovel, worst case for the City, the developer could then flip the undeveloped property and can you imagine what that prime piece of property will be worth in 2029?
If EGN's analysis is correct and let's say the property is currently worth 30% more than the City's offering price of $4 million, or $5.2 million--then assuming a conservative 2% annual property value inflation rate-the Developer could turn around next week and purchase the property for $4 million and flip it for about $5.2 million for a tidy $1.2 million profit; or drag it out until 2029, pay the $4 million, and sell it for a very conservative estimate of $5.6 million or a $1.6 million profit.
Personally, I would sell off a piece of the parcel to a hotel to recoup most of my money, convince the easy-mark City to grant me more building incentives by dangling room-tax revenue in front of them, and then sell off the remainder of the site to cash out and say sayonara to the City!
Looks like a sweetheart deal. Who's getting the kickback at city hall?
Post a Comment