Sacramento received a scare recently when the Atlanta Journal Constitution reported that Thomas Enterprises Inc., a developer for Sacramento's ambitious north-of-downtown development, The Railyards, has run into financial trouble. Stan Thomas, Thomas Enterprises' founder, filed for Chapter 11 bankruptcy protection on three large projects, and almost had a fourth project go into foreclosure.
Thomas is well-known for tackling gigantic projects and financing them with his own money. Over the years, his plans have included building a seven-star boutique hotel near the Tower of London, a retractable roof stadium in Orlando, and five "mini cities" across the country. However, his ambitions outgrew the market, and the recent credit crunch prevented him from refinancing loans. He filed for Chapter 11 bankruptcy protection on a 2 million square foot San Antonio shopping center, a Prospect Park retail development, and a third project in Smyrna.
The Railyards is Thomas Enterprises' largest continuing project. The Railyards is being built on a hazardous waste site on the riverfront, and Thomas Enterprises is contributing about $100 million in environmental cleanup. Most of the infrastructure spending comes from public funding. Plans include 12,000 homes, 2.3 million square feet of office space, 1.4 million square feet of retail, a transportation hub, and a possible sports arena.
There is no indication that Thomas's financial troubles will affect The Railyards. Still, Thomas's plight has caused anxiety. Sacramento city councilman Kevin McCarty, the only council member to vote against Thomas's deal, has raised questions about Thomas's ability to finish the project. Millions of public money and thousands of potential jobs hinge on the project. Hopefully, Thomas's bankruptcy filings will prove to have contained his financial troubles.
