Tomorrow, Council Committee to Learn All About Plans for 1401 Elm Street Redo

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Last month we broke the news that 1401 Elm Street was about to be snapped up by Turkish investor and developer Mukemmel "Mike" Sarimsakci -- if, that is, the city OK'd $30 million in TIF funds for a redo now expected to run upwards of $136 million. (The George Dahl-designed former First National Bank of Dallas is, after all, the largest empty building downtown -- 52 floors and 1.5 million square feet of empty, to be precise.) Sarimsakci's already made it past the first hurdle, and closed on the building August 19, but council still has to sign off on the deal, which it's expected to do September 28.

Hence this briefing prepared for the first Economic Development Committee meeting under Mayor Mike's new roster lineup. Office of Economic Development head Karl Zavitkovsky will offer a few more details concerning the plans for the 1401 Elm, some of which appear to have been tweaked over the last few weeks. As in: Last month's presentation said there'd be around 395,000 square feet of office space; tomorrow's doc says it's closer to 464,400. And the number of potential residential units has gone from 509 to 520 -- though Sarimsakci will only have to do 400 units to qualify for the TIF money.

The ninth-floor rooftop plaza and the 50th-floor observation deck will be open to the public, the former complete with gardens, the Dahl-designed fountain and some retail. And the city is stipulating that 10 percent of the residential "comply with the City's affordable housing program" and that "affordable units must be available for a 15 year period (from the date of CO)," which is December 31, 2014. Zavitkovsky will also try reassure the council that the Turk's a serious player connected to the same company that oversaw development of, among other project, a Ritz-Carlton in Russia and a museum in Turkmenistan. Read up today; we'll follow along tomorrow.
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Dist14
Dist14

Didn't the EDC meeting happen already? What happened? 

DevMan
DevMan

This is not nearly enough TIF to make this work. 1.5 mill sqft? Rediculous.

Wylie H.
Wylie H.

The sponsor company DID NOT act as developer of the Ritz Carlton in Moscow, or any of the other projects listed on their website--- they acted as a contractor.  That is a HUGE difference-- the contractor doesn't conceptualize the deal, assess its feasibility, arrange financing, assemble the deal time, manage sales and leasing, perform asset management, etc., etc.  Rather, the contractor (and it appears that Polimeks was one of several associated with the Ritz Moscow), simply oversees his portion of the building construction, organizing and managing the subcontractors, etc.  Do you think Zavitkovsky understands this and is merely trying to pull a fast one on the City Council, keeping his fingers crossed that these guys will be able to figure out how to do this?

According to its website ( www.polidev.com ), the development company was founded less than two years ago and owns a grand total of two assets:

1)  Edgewater Park Plaza ( www.edgewaterparkplaza.com ), a 35 year old half-empty, 200,000 sq. ft., class B office park located in an odd area of Oakland (purchased for $12 million last year); and

2)  351 California, an old, poorer-than-average condition property with inefficient floor size, and high vacancy they purchased at auction for $35 million (a price widely viewed as high by the market).

With respect to Mr. Mukemmel "Mike" Sarimsakci, a cursory (less than 5 minute) Google search turns up numerous derogatory references surrounding a failed small chain of furniture stores in the San Francisco Bay area known as Black Sea Gallery.

http://www.yelp.com/biz/black-...

In all seriousness, does Karl Zavitosky or his staff do ANY due diligence on folks when they come in asking for $30 million in City of Dallas money?!?  I mean, come on.... this is friggin' ridiculous.  (and Dist14 caught this well before I did)

It would take City staff all of 10 minutes to identify major questions surrounding the background of the principals in this transaction. 

To sum up, we have:

1)  A developer with absolutely no proven development experience that has recently acquired its first two buildings in the San Francisco Bay area...

2)  Led by a principal who appears tied into a recently failed chain of small furniture stores.

Mary Suhm's organization really leaves me scratching my head at times (.... really, near all the time).

whodunnit
whodunnit

Right on, Wylie H. Sarimsakci's own submitted credentials say he was employed by Bechtel, early in his career, but only for a short time. Bechtel is a substantial San Francisco based General Contractor. However, he probably went to work there right out of college, probably as a "junior" engineer. Companies like Bechtel do not hire recent graduates at the executive level.

Then, his credentials say he started the Black Sea Gallery retail furniture business with his father-in-law, who he had met while at Bechtel. His credentials go on to list a company he formed called BSG Development (BSG stands for.....you guessed it.........Black Sea Gallery). So, it sounds like he has been "developing" a chain of furniture stores, the largest of which is only 20,000 square feet.

This shouldn't be a problem (I'm being facetious).........Zavitkovsky thinks he has the credentials to develop this 1.5 million square foot monster.....Sarimsakci told him so, and that's good enough for Karl Z.............another Zavitkovsky deal in the tank.

replay
replay

Zavitkovsky.....trying to pull a fast one? Absolutely, he's been doing it for years! Someone should check his production. How many economic development deals has he actually done since 2006? I don't mean how many he has gotten through the approval process. I mean done deals.........completed........open for business and back on the tax rolls at much much higher valuations..........yeah, I thought so. Due diligence? What a joke! Due diligence is only done to kill the deals that Zavvy doesn't want.

Dist14
Dist14

Yeah, he worked for a General Contractor and trying to pawn those projects off as his own. He went to school, worked for a GC, then did retail stores, and here we are now. He has no experience as a developer.  

Zavitkovsky - please provide the Dallas Observer the real evidence of this man. Case Closed. Why are you trying to misappropriate tax dollars? You now have advance notice of your wrongdoings, so you will be held personally liable. There are ways to get around Sovereign Immunity. That goes for the Council as well, if they prove to be as stupid as you. 

AintNoSunshine
AintNoSunshine

Dont worry, Open Records Request are already in the works. If Karl Zavitkovsky misrepresents one thing to the council he will pay the price. 

Guest
Guest

In all seriousness, does Karl Zavitosky or his staff do ANY due diligence on folks when they come in asking for $30 million in City of Dallas money?!?

I hoping the answer to that is "no", at least until after I get my "business plan" in his hands.

Downtown_er
Downtown_er

Was the "closing" a real closing or just like the Grand Hotel "closing" being the "Whimpy Closing", " I will gladly pay you Tuesday for a hamburger today." 

Rangers100
Rangers100

I hear the museum market in Turkmenistan is hot.

Bob
Bob

What does Turkmenistan have to do with anything?

Dist14
Dist14

From what we have found, Sarimsakci, was a furniture guy, that went out of business in the Bay area. I am sure he had a hand in his 15,000sqft retail stores, but this has no comparison to the complexity of this kind of retrofit. Many developers looked at this deal, and passed because of the amount of land-mines. Does he even have the 9 ground leases under contract? This is suicide he if does not while asking the City for public subsidies of $136 mil. A rookie mistake, which we find him to be. This is just the most fundamental, the real problems start after that................Per Karl Z. I guess he has a brother-in-law, who has a friend, that once met a "real developer" that is going to be a "consultant." Sounds like a deal for Dallas, per the Council of past. 

Oh, and Karl Z. owes Tim Headington (who I know personally) a big apology, for stating this guy has the size (financial wealth) as him. Tim has more in his sofa from falling out of his pockets than this guy. 

replay
replay

Good luck, Zavvy!

Oak Cliff Townie
Oak Cliff Townie

Just to refresh my Rum soaked mind.

A TIF is what again ?

Robert Wilonsky
Robert Wilonsky

Tax increment financing, wherein you promise a developer they get to keep X amount of new taxes guesstimated to be generated in the redevelopment of a stagnating property presently generating zilch.

HowDallasReallyWorks
HowDallasReallyWorks

This deal will never happen unless Matthews SW gets a piece of the public subsidy

RTR
RTR

If this "New Mayor Mike Council" believes a damn thing that comes out of Karl Zavitkovsky's mouth, then they will not only get what they deserve, but also should be held liable as they have had years of advance notice, that he's an IDIOT, AND SHOULD BE FIRED. HE HAS MADE COUNTLESS IMMEASURABLE MISTAKES FOR THE TAXPAYERS. 

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