Nov. 3--Do Sacramento city officials want a 409-room, full-

service hotel at Eighth and K streets? Or, instead, a "select-service" 165-room Marriott at 10th and K?

Some hint might emerge tonight when City Council members weigh in on the smaller of the two proposed hotel projects.

The issue: Whether staff should be authorized to evaluate financing options and other issues regarding the 10th and K proposal.

A "yes" vote would indicate general support for the 12-story project, says Tony Giannoni, one of the project's partners.

A "no" vote, he says, would mean council members prefer a 25-story, $137 million project backed by Sacramentan Bob Leach and South Korean investors.

That one's scheduled for a council discussion later this month.

The one thing that's certain: In the current business climate, "there's clearly not room for both projects," Giannoni says, and at some point the council may have to choose between them.

Under the 10th and K plan, about half of the $43 million budget would be met with conventional financing and the other half would come almost equally from equity investors and from the city in the form of loans and other assistance.

Can the backers reasonably expect to obtain the conventional loans?

Not right away, in this lending climate, says Giannoni, who helped develop downtown's Marriott Residence Inn.

But if the city ponies up, creating an attractive 50 percent loan-to-cost ratio for a private lender?

"There'd be a good chance of some financing in the future," he says.

A lot of opportunity

The Capitol Area Development Authority has a "small is beautiful" deal for local builders.

The agency, which normally seeks developers for large downtown and midtown properties, is looking to unload a 40-by-40-foot parcel at 1610 17th St.

It took ownership of the long-vacant lot last year. One developer agreed to acquire it for $111,000 and was set to build two narrow, three-story homes there.

But he couldn't get financing.

Now CADA has lowered the price -- to $85,000 -- and is seeking interest from other developers with creative ideas for the space.

"We're looking for a really innovative project that can be an example of ... what can be done on such a small lot," says Tom Kigar, CADA's development director.

Kigar thinks a two-home plan pencils out nicely, with construction costs of about $140,000 per home and a likely sales price of $330,000 each.

But can anybody get financing?

"That's exactly the challenge," he says.

Smokin' deal

Sacramento's Merlot Marketing continues to rake in contracts to promote upscale home products.

The latest deal: an agreement to represent BR-111, a Brazilian manufacturer of exotic and sustainable hardwood flooring.

Merlot execs recently flew to Miami to pitch their ideas for the account and apparently wowed BR-111's president with proposals to stage product showcases in crowded venues such as Times Square -- and to build "floating" glass ceilings above the displays that visitors could walk on and then gaze down at the flooring.

As company President Debi Hammond recalls it, BR-111's Ricardo Moraes at first found the ideas a little, uh, wild.

In a heavy accent, he inquired: "So exactly what do you guys 'grow' in Sacramento?"

Implying that the Merlot team might be smoking what it was growing.

Hammond replied that wine sometimes stimulates ideas at the company. Never anything stronger.

The team left on a high note, so to speak, with what Hammond calls a "very big account."

Reach Bob Shallit at (916) 321-1049. Back columns: www.sacbee.com/shallit.

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