Client: Sacramento Municipal Utility District (SMUD)


The Sacramento Municipal Utility District (SMUD) engaged GG+A to advise and assist with the disposition of its former 59th Street Corporation Yard in Sacramento for reuse and mixed-use development. The property consists of approximately 20 acres making it one of the largest infill development opportunities in Sacramento. GG+A began by conducting a due diligence review of the physical, community relations, and market conditions, and conferring with SMUD staff and officials to develop consensus on goals, objectives, and priorities and criteria to use to evaluate development proposals.

GG+A implemented an extensive marketing strategy to attract top regional developers, building a robust database of potential buyers and developers. SMUD’s requirements included above-average affordable housing provisions (beyond city inclusionary zoning requirements), potential relocation of the 59th Street light rail station to the property, and ambitious sustainability standards. GG+A developed concept designs aligned with SMUD’s vision and led the creation of a robust informational package to streamline developer due diligence. GG+A held “bidder conferences” and conducted tours of the property that were attended by over 20 regional and national developers.

GG+A managed the solicitation process by preparing an initial Request for Qualifications (RFQ), evaluating responses, and requesting clarifications as needed. A detailed evaluation report was then used to shortlist candidates for the Request for Proposals (RFP). Following receipt of proposals, GG+A led discussions and rounds of correspondence with two development teams, encouraging refinements. This process secured improved terms, including profit-sharing provisions from one team. The evaluations addressed criteria such as financial capacity, project feasibility, market rationale, engagement with local communities, entitlement challenges, value to SMUD and Sacramento, and risk assessment.

During the evaluation of the two final development proposals received by SMUD, the proposed standards for environmental conditions under which housing uses could be built and occupied dramatically increased. The area of the property requiring significant environmental remediation increased. GG+A counseled SMUD on the implications of the heightened EPA requirements, costs, and risks and worked with SMUD and the final developers to identify a path forward that would allow either the selected developer or SMUD “off ramps” if the clean-up requirements became infeasible. A development team recommended by GG+A was selected by the SMUD Board. GG+A helped SMUD negotiate a “Due Diligence Agreement” as a precursor to a “Development and Disposition Agreement,” in recognition of the challenges and risks associated with potential heightened environmental standards.

Project website: https://www.sac59.com/