calPERS is the California Public Employees’ Retirement System, the country’s largest public pension plan. Through its real estate arm it has invested in Boston’s Columbus Center multi-use construction project.
The development begun pre-construction in late 2007 but came to an abrupt stop in March after the lead developer and owner, Winn Companies lost several loan commitments and grants from the Commonwealth of Massachusetts.
Winn Companies says they are planning on getting the project going again, soon. A spokesman for the company said that the developer has been visiting with calPERS officials to find more sources of funds.
The latest word on the street is that calPERS doesn’t have the funds to lend.
L.A.’s Grand Avenue project snags on loans
By Cara Mia DiMassa
Los Angeles Times
The developer of the Grand Avenue project in downtown Los Angeles said Monday that completion of the $3-billion redevelopment effort will be delayed until 2012 because of difficulty in obtaining construction loans amid the real estate downturn.
… Bill Witte, head of Related California, said he now believes that construction will begin in the first quarter of 2009 and emphasized that the project is not in any jeopardy. A fund controlled by Dubai’s royal family has invested $100 million, and Related is close to naming another major equity partner (an earlier partner, the California Public Employees’ Retirement System, pulled out, saying it was over-invested in the downtown real estate market).
Then, this article appeared.
Calpers Takes Hit on Land Deal
By Michael Corkery and Craig Karmin
Wall Street Journal
The nation’s largest pension fund is involved in one of the biggest land deals to fall victim to the housing bubble. It is an unusual position for the investor, which has a reputation for avoiding such blowups.
The deal involved a $970 million investment by an investment entity that included the California Public Employees’ Retirement System in a venture that owns thousands of acres of undeveloped residential land north of downtown Los Angeles. Now, due to the downward spiral of the housing market, Calpers may find itself having to relinquish the well-located land to creditors and possibly lose much of its investment.
Finally, the CEO of calPERS recently announced he is “retiring”.