Local developer Larry Kelley has worked out a deal to purchase a big portion of the Downtown Railyard site, kick-starting future development that was derailed by the recession.
Inland American Real Estate Trust took over the property after Thomas Enterprises lost the 240 acre site by defaulting on payments.
A spokesperson of Inland American said they always made it clear they were not a developer and were actively seeking a master developer for what is considered the largest infill development in the nation.
Kelley helped develop Standford Ranch in Rocklin. The 3,500 acre project includes office, light industrial, retail and housing. He also lead a group that transformed the 3,000 acre former McClellan Air Force Base into an industrial park with offices, a hotel and conference center.
The Railyard is in City Council Member Steve Cohn’s district. He says Kelley knows the market and is well versed in working on former industrial sites like McClellan.
“That’s a pretty rare combination,” said Cohn.
Cohn also said Kelley has experience dealing with toxic contamination and cleanup at the airbase. The Railyard has been plagued with toxic contamination clean up problems, although the bulk of the cleanup is complete. Kelley will be negotiating with Union Pacific Railroad to see who might be responsible for any future contamination that might be found.
Kelley is a Sacramento Kings booster who was one of the business people who pledged $1 million to keep the team in Sacramento. He also put together a team to explore building an arena in the downtown plaza site three years before the new Kings ownership group came up with its proposal.
At the time, he said he said a downtown arena would help development in the Railyard. It appears he’s acting on his prediction by becoming the master developer at the Railyard.
Just how much of the site Kelley will be buying and the cost have not been entirely worked out. Much might depend on who is responsible for future toxic contamination cleanup. It may take six months before the deal is finalized.