According to the developer, Mike Kriozere, One Rincon Hill Tower One sits at around 70 percent sold which would suggest almost no net-new contracts since October of 2008 when roughly 30 percent of Tower One inventory had yet to close.
And according to The Chronicle, said developer “does not plan to pay the $5 million in fees that were central to obtaining city approval to build the high-rise.”
The poor economy has stalled plans to build a second, adjacent tower, and Kriozere said he anticipates that the existing building will lose money. As a result, he does not expect to pay the development fees that would have been spent on things like affordable housing, rent subsidies and job training programs.
“I did not give a personal guarantee that if the building failed to make a profit I would personally write them a check,” Kriozere said. “Any money has to come out of the sale of the units because I’ve made no personal guarantee of anything.”
Kriozere left open the possibility that sales could improve and the fees could be paid, but he was not optimistic.
The question(s) to be answered, were the fees to be paid upon success or simply upon development? And if the agreement was written based on success, who did the writing?
∙ City fees for One Rincon unlikely to be paid [SFGate]
∙ It’s “Official,” One Rincon Hill’s Tower Two Is Indefinitely On Hold [SocketSite]
∙ A Return To Reality For A One Rincon Hill “02” Stack Resale (#2202) [SocketSite]
∙ One Rincon Hill (425 First Street): Secondary Market Stumbles [SocketSite]