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Sacramento Business Journal - April 12, 2004
http://sacramento.bi.../12/story6.html
EXCLUSIVE REPORTS
From the April 9, 2004 print edition
Key parcel south of Folsom for sale
1,000 acres in path for annexation
Mike McCarthy
Staff Writer
The owners of 1,005 acres south of Highway 50 -- almost one-third of the land that Folsom can annex in the area -- have put the tract on the market, seeking a price of around $40 million
The land owned by the Finn family is a gateway to future development of Folsom's 3,584-acre sphere of influence south of the highway, the area it could someday annex for city expansion. The Finn tract takes up 28 percent of the area and sits just across the freeway from the city, making it a likely site for the first projects within the sphere. The Finn land also includes roughly half the freeway frontage in the potential annexation zone -- key land for commercial development.
If the Finns can get anything near their asking price, they might be the first landowners to make a big buck out of the city's expected push southward.
The family could have done better in a previous land deal. In the late 1980s, the Finns sold another tract, in what is now Folsom, of about 1,000 acres to Natomas Real Estate Co. for $7,000 an acre. That company then sold it to Elliott Homes for some $30,000 an acre, said Dave Jarrette, a land expert and partner in the Roseville appraisal firm of Giannelli, Jarrette & Waters. The Elliott land later became the Broadstone development, and includes housing, retail, office parks and the site of a planned regional mall.
It seems likely the Finns can get bigger bucks this time around. "The land is next to one of the hottest growing cities in Northern California and the city is running out of land," Jarrette said. "It's also a window to the main portion of the sphere of influence and it's got the most usable topography. And the land market is as strong as it's ever been."
Months of talks: Industry sources say that for more than a year the family has dickered with Elliott, Serrano developer Bill Parker and others over the family's land south of the freeway, but no one was willing to pay their asking price. The Finns, sources say, decided to put the project on the open market to gain a larger audience and maybe a higher price.
The family has listed the property with Craig Brinitzer and Bob Feld of Cornish & Carey/Oncor International. Brinitzer said the brokers cannot comment on the property they are marketing.
Finn family representative Terry Finn did not return calls.
The listing came shortly after the city's Planning Department began a "visioning process" to plan for the land south of the freeway, a clear sign that city is planning for annexation. That puts the Finns in an even better position to sell.
Prospective buyers will weigh the likelihood of new-home development on the land.
Before the city secured approval for its expanded sphere of influence in June of 2001, the environmental impact report for the expansion was based on developing the land for offices, retail and other commercial buildings.
But residentially zoned land is in demand and gets the biggest money from developers. Observers believe developers will pressure the city for residential zoning of most of the land away from the freeway. The highway frontage strip, however, would almost surely be zoned for commercial buildings.
There's a catch or two: The Finn land, however, is being watched by environmentalists and Folsom community activists. About 300 acres of the Finn tract is considered valuable wildlife habitat by environmental advocates. "I would hope that whoever is interested in buying the property understands that they will not be able to develop quite a bit of that land," said Alta Tura, president of the Sacramento Urban Creeks Council and a watchdog of eastern Sacramento County.
The environmental impact report for the expanded sphere of influence called for 30 percent of the area to be preserved as open space. Around one-third of the Finn property could become part of a preserve should the city decide to actually set aside such lands.
Folsom community activists, wary of reckless growth, are also watching. "They should be aware that residents of Folsom may put up obstacles to development," said Bob Fish, a leader of Folsom Residents for Sensible Growth.
The group is fielding an initiative for the November ballot that calls for restraints on development south of the freeway. The initiative says the city's voters, not just the City Council, should vote on key development steps in the area.
The main constraints on development are environmental, the effects of added traffic and the need to secure a water supply. Sacramento developers generally have been able to overcome the obstacles.
The development effort is likely to be aided by the presence of one of the region's most astute land developers, Angelo Tsakopoulos, who also owns land in the Folsom sphere of influence. Tsakopoulos, head of AKT Development Corp., controls at least one-third of the area, and he and his family also control thousands of acres south of its southern border, White Rock Road. Observers fully expect that pressure will build to develop land south of the sphere, as far south as Rancho Murieta.
The 30,000 acres between the sphere and Rancho Murieta now is unincorporated ranch land. It also is the last piece of really attractive countryside in the county and would be a prime area for residential development, Jarrette said.
The land is outside the county's urban services boundary, intended to limit development. The county has already acceded to landowners requests to split some of the land beyond the boundary into smaller parcels, setting the stage for development.
© 2004 American City Business Journals Inc.
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