LRE CEO Akki Patel shared his enthusiasm when he stated, “ LRE &  Companies is committed to building strong communities through strategic partnerships with cities and iconic brands. We are excited to have developed this project which will not only bring fresh and convenient dining options to Crescent City and Del Norte residents but also contribute to the local economy by creating g jobs and attracting more foot traffic to the area.”

City Councilors, Mayor Blake Inscore, City Manager Eric Wier, Fire Chief Kevin Carey and other high-ranking staff inaugurated the “soft opening” in preparation for helping create a a new hub for visitors And residents alike.

A rendering shows the planned Social Connection area of the new Roseville Junction development. Developers issued an open call for muralists to submit artwork that will surround the space. LRE & Co.

Developers of Roseville Junction, a future entertainment and eats “destination,” are looking for artists to paint murals under the theme of “the Vibrancy of Northern California.”

Open walls for murals will be on the sides of shipping containers that surround a beer garden and venue for food and beverage vendors, developers said in a news release. That area makes up the “Social Connection” space of Roseville Junction, which is set to be anchored by locally founded Fieldwork Brewing Company.

Developer LRE & Co. said muralists will have until Aug. 1 to submit their proposals or coordinate an in-person delivery by emailing info@lrecompanies.com. The winning artist is set to receive a stipend.

“We know there is a lot of talent in the region and we cannot wait to see what concepts we get back,” Akki Patel, LRE & Co. CEO, said in the release. “This space will be all about community, and there is no other way to celebrate that then through storytelling murals.”

Roseville Junction, at 290 Conference Center Drive, was designed to house pickleball courts, two hotels, restaurants and a music venue, all adjacent to the Westfield Galleria mall and Highway 65. Social Connection is also meant to host concerts, according to the news release.

Nine pickleball courts are set to open early next year, Electric Pickle’s second location, which will be accompanied by an indoor-outdoor bar and lawn space for gatherings.

Two hotels with a total capacity of 250 guests are planned to be added by Hyatt and Hyatt House Roseville in 2026, and project partners behind Social Connection are negotiating with bar operators to add a bar space to the Roseville Junction.

Set to open at the end of 2025, developers hope Social Connection’s 20,000-square-foot space will be surrounded by murals that act as a “colorful backdrop” to the community gathering area.

“We need an artist who can represent and tell the story of Northern California, Placer County and the City of Roseville through art,” Patel said in an email. “Our region is truly one of the best and most unique places to live and raise a family. It has a lot of history, and we want to showcase it through this art form.”

I recently had the pleasure of sitting down for a Q&A on California’s commercial real estate, my experience in the industry, and perspectives on where we are and where we’re headed. I hope this contributes to the ongoing dialogue in our industry and throughout the state.

In the dynamic arena of California’s commercial real estate, where dreams collide with daunting realities, Akki Patel emerges as a beacon of resilience and hope for agents, developers, and community members alike. Amidst the high stakes and bureaucratic mazes, Patel, a visionary entrepreneur from the Bay Area, shares his insights on thriving in this demanding landscape. Join us as we uncover the secrets to transforming California’s challenges into lucrative opportunities, turning adversity into adventure and success.

Can you give us an overview of your experience in the real estate sector, particularly in California?

For nearly 25 years, I’ve been immersed in the world of Commercial Real Estate, building both properties and communities as the founder and CEO of LRE & Companies. Based in San Rafael, California, we’ve brought to life 25 diverse commercial projects across the Bay Area and beyond. Drawing from our deep roots in California’s real estate scene, we’ve ventured into Nevada with ease, driven by our passion for growth and community enrichment.

What are some of the unique challenges you’ve faced as a real estate developer and investor specifically in California?

California is one of the nation’s strongest economies, comparable to that of an independent country. But navigating its landscape definitely presents unique challenges. As a developer, I’ve encountered significant development risks due to some cities’ reluctance to embrace opportunities as readily as those in other states. The regulatory environment and high cost of living in California pose unique challenges, ones that may not suit every investor.

Tell us more about the current regulatory environment for real estate development in California. How would you describe it?

A wild ride is the easiest way to describe it! It’s a complex and evolving landscape. We have strict environmental regulations like the California Environmental Quality Act (CEQA), numerous zoning laws, restrictions, and land use regulations that significantly shape development opportunities.

What impact have zoning laws and building regulations had on your projects in the state?

The first thing we have to think about is entitlements, which is more commonly referred to as red tape. That’s the first step in the process. Obtaining entitlements can be a complex and time-consuming process, involving endless negotiations with various government agencies and community stakeholders. You could buy a piece of land and never obtain the necessary entitlements, leaving you with land you can’t develop. That can be a big risk for CRE investors and developers. Many cities are seeking developments in hospitality, housing, and retail, which benefit the community economically through job creation and increased tax revenue, but they don’t always make it easy to cut the red tape.

What are some of the biggest hurdles you’ve encountered in obtaining permits and approvals for your projects in California?

Time is always against us in real estate — and it’s a race we can’t afford to lose. You’ve got to strike when the opportunity’s hot, predicting how the economy will look once your project’s complete. Zoning laws are like a puzzle you have to solve before you can even think about building anything — whether it’s multifamily homes or a drive-thru. But getting through all the red tape can take forever. In California, it can be anywhere from two or more years before a project is turn-key. Imagine trying to turn farmland into commercial space — it’s a marathon, not a sprint. Some cities are more business-friendly, but the bureaucratic grind slows everything down. So, when it comes to the biggest hurdles in getting permits and approvals for California projects, time is the big villain, dragging out the process and testing our patience and grit every step of the way.

Have you experienced any challenges related to environmental regulations and compliance in California? If so, how have you navigated them?

The first thing that comes to mind is definitely the state’s CEQA. It’s what I would call a necessary evil. On one hand, it’s a crucial tool for protecting the environment and ensuring sustainable development. But on the other hand, it adds layers of complexity and delays to our projects. It’s like trying to navigate a maze blindfolded; you know it’s there to guide you, but it often feels like it’s slowing you down more than helping. I do appreciate the intent behind CEQA, but as a developer it’s definitely one of the tougher hurdles we have to clear in California.

California is known for its high cost of living. How does this affect the real estate market and your investment strategies?

California’s renowned for its high cost of living, and it’s a significant factor shaping the real estate market and our investment strategies. While the Golden State offers unparalleled quality of life and cultural diversity, it comes at a steep price. As entrepreneurs and investors, we feel the pinch of inflated expenses, which have surged over the past decade. This reality influences our approach to real estate investment, forcing us to adapt and innovate. We’re constantly assessing market conditions and exploring niche opportunities to stay ahead of the game. Despite the challenges, California remains an attractive investment destination — but success demands grit and savvy navigation of this ever-evolving and sometimes unforgiving landscape.

How do tax policies in California impact your investment decisions and overall profitability?

Well, there is a thing we call the Sunshine Tax. That’s why we are in California, and everyone else who isn’t, wants to be in California. It’s a great state to be in, considering the quality of life, cultural diversity, and extracurricular activities California offers us, right? But it all comes at a high cost. When it comes to tax policies in California, they play a significant role in shaping our investment decisions and overall profitability as commercial real estate investors and developers. The state’s tax landscape directly impacts our bottom line, influencing everything from property acquisition to operating expenses and eventual returns on investment. We must carefully evaluate tax implications, including property taxes, income taxes, and capital gains taxes, as they are crucial aspects of our decision-making process as we strive to maximize profitability and mitigate financial risks in the dynamic real estate market.

Are there any specific regions or cities in California that you find particularly challenging or rewarding to invest in? Why?

Every city has challenges and rewards, regardless of where it is located. We do a tremendous amount of work in Greater Sacramento, the North Bay, and coastal communities, which come with unique challenges. However, I feel that certain cities have done a much better job in terms of their strategic development plans, bringing more businesses into their cities, which creates more jobs and really grows their economic prosperity.

Can you speak a little about the labor costs or shortages in the construction industry in California?

In California, labor costs are a big deal, especially in construction. They’re usually higher than the national average, which can really hike up your project expenses. It’s tough to find skilled workers, especially when the residential market is booming. Even in places like Sacramento, where it’s a bit easier, the struggle is real. And let’s not forget about the high capital and entitlement costs — those add up too. When you’re trying to make a project pencil out, every penny counts. When labor costs are high, it can really throw a curveball into your plans and complicate things even more.

In your opinion, what reforms or changes could improve the business environment for real estate developers and investors in California?

One straightforward solution would be to streamline the entitlement process, allowing projects to be entitled more swiftly. By reducing the time it takes for projects to move through the review and approval stages, we could significantly expedite development timelines. This simple step could provide substantial benefits, enabling developers to take on more projects and assume manageable risks while maintaining the quality of their work. Ultimately, prioritizing efficiency in the entitlement process would be a win-win for developers and communities alike.

What advice would you give to other developers and investors looking to enter or expand their presence in the California real estate market?

If you’ve never ventured into California, brace yourself — it’s quite the journey. It’s no walk in the park to get things done in this state. That’s why many local developers have thrived — they’ve mastered the intricacies after many attempts and many failures. At LRE & Companies, we excel in navigating entitlements and seeing projects through to completion. But it’s crucial to understand that success here requires a unique mindset and considerable time and effort. Simply coming in and expecting to build something overnight won’t cut it. Your dreams will definitely be dashed. California is a long game.

Looking ahead, what trends do you foresee shaping the future of the real estate sector in California?

Looking ahead, I anticipate several key trends shaping the future of the real estate sector in California. One trend is the increasing popularity of micro-unit builds, which offer a strategic approach to maximizing density while minimizing footprint. That’s a win-win for both developers and residents seeking affordability and efficiency.

Also, with the prevalence of high labor costs in California, we are likely to see new innovations to reduce labor dependency in construction. More automation technologies and modular construction methods will usher in the use of prefabricated buildings, with shorter start to finish build times — we are already seeing the start of that now!

Basically, these new trends are just common-sense solutions to the challenges we face in California’s real estate market. It’s all about being efficient, keeping costs down, and being able to roll with the punches as things change here in this challenging but great state!

Placer County recently relaunched its Workforce Housing Preservation Program to assist teachers, service workers and other members of the local workforce to purchase homes and stay rooted in the North Lake Tahoe community.

The county program provides workers up to $150,000 towards the purchase of a home, which would then be deed restricted for 55 years to ensure that only qualified local workers can reside in it.

Kudos to Placer County for its bold and innovative approach in addressing one of the most critical issues facing California – affordable housing for local workforces.

According to the California Budget & Police Center, “The lack of affordable housing increases economic insecurity among California families and also creates challenges for California employers striving to retain and recruit workers. Housing affordability is a problem throughout the state when housing costs are compared to incomes, and the Californians who are most affected by the housing affordability crisis are renters and households with the lowest incomes.”

It is a problem that I have witnessed first-hand. My company, LRE & Companies, often works within smaller municipalities as a real estate investor and developer. We identify a need within a community and manage the development process with input from local governments, businesses and citizens. One of our most recent projects was “University Square,” a 10-acre mixed-use development project in the Placer County city of Rocklin.

We like to think that our projects can benefit and be enjoyed by people from different socioeconomic backgrounds, but that is not always the case. Judging from what I have seen from our worksites, many of the workers who help construct our projects often do not own houses in the community, or they might be commuting long distances from other counties.

They are often priced out of the community that they are helping to build. Another issue is attracting a workforce once the projects are complete. Ideally, these jobs would go to local residents—but if the workers cannot afford to live there, this isn’t always possible. Meaning more commuters, which also impacts our environment.

The California Department of Housing and Community Development lists the following reasons for the state’s housing crisis: not enough housing being built; increased inequality and lack of opportunities; too much of people’s incomes going toward rent; fewer people being homeowners; disproportionate number of Californians experiencing homelessness; many people facing multiple barriers – beyond just coast – in trying to find an affordable place to live. The Placer County program tackles the issue head on. The county gives eligible homebuyers up to 16% of a home’s purchase price, or up to $150,000, that can be applied toward a down payment or home improvement. The deed restriction of 55 years auto-renews each time the house is sold, and homes can only be sold to qualified local workers. The goal is to create a secondary market of local worker housing.

The program does not have income caps for applicants and can reduce mortgage payments for North Lake Tahoe employees by hundreds of dollars per month, according to the county. Perhaps the most important aspect of the program is that the funds disbursed by the county to homebuyers do not have to be paid back.

Placer County is not providing charity. It is investing in its communities, preserving the middle class and making sure its resident families will grow, thrive and contribute to the growth of their county.

We need more of these types of programs up and down the state. All of California must prioritize affordable workforce housing.

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Akki Patel is founder and CEO of LRE & Companies. LRE is comprised of number affiliated entities that has been operating for 21 years in Northern California. The holdings of LRE & Cos are comprised of hotels, franchise restaurants, franchisor for national brand and commercial real estate portfolio.

Every day is not going to be a good day — but there will be great days. Have patience.

 

ands Across Montecito co-founder Kathryn Washburn got a call from Dignity Moves a couple of weeks ago, asking if she’d support the new tiny homes in downtown Santa Barbara. As a strong member on the Hands Across Montecito team that has achieved great results in helping people leave homelessness, Kath wasn’t sure about this. She wanted to see it.

So she asked for a tour, and after seeing it, immediately went to work to provide supplies for one of the units to make it a home.

Then she called the Hands team, and Andrea Eltinge and I went with her to the ribbon-cutting last weekend. It was impressive.

A small, narrow parking lot owned by the county in the 1000 block of Santa Barbara Street had been turned into a village of 32 tiny homes, with a central kitchen area, bathrooms, decking, and thoughtfully placed potted plants. Here’s some of the story on how that happened:

Elizabeth Funk, the founder and CEO of Dignity Moves, said they ordered the units October 1. Now, they’re about to move 60 people into these 32 units. Matt Riley, a Montecito resident on the Dignity Moves board, was credited for tireless ‘Do-ism’ in making this happen so quickly.

Funk said there were many similar stories: Many people made newly homeless are not addicted to substances, but 30 days after being on street, your chances of developing a lifetime addiction skyrocket. Then climbing out of homelessness becomes even more difficult.

Something we’ve experienced on the Hands Across Montecito project: no one wants to go into a shelter. It’s not hard to see why. It’s bunk beds. It’s crowded, in a pandemic. You have to be in early at night. Your stuff often gets stolen while you sleep. You have to be out at 5 or 6 am in the morning, with nowhere to go. It’s ‘near jail’ conditions, and dehumanizing.

Dignity Moves offers what we’ve long needed: bridge housing – a temporary indoor bridge from homelessness to permanent housing. These units are meant to provide security, via four walls, 64 square feet of space, a roof, and a locking door. Hands Across Montecito leverages hotel rooms as bridge housing. It’s far easier for CityNet case managers to help people move forward when they’re in a stable situation versus trying to find them in camps, where they’re often forced to move around.

Supervisor Williams said, “This is an example of what community can do. We should not stop here. Some say certain people will never come inside. That may be true, but we’ve never yet run out of the people who do want to come in off the street.”

Supervisor Hart noted the “enthusiasm that this is a different tipping point in dealing with the problem of homelessness. When you see these tiny homes, you realize this is what we need to do. It is shelter with dignity, that restores people’s humanity.”

The site will have onsite management, and services that help people transition out of homelessness provided by Good Samaritan, a huge nonprofit from Santa Maria. I’ve had a lot of experience with them as a member of the Behavioral Wellness Commission. Sylvia Barnard does a fine job overseeing projects like this that move people out of homelessness. The construction costs of $1.4 million were covered by a combination of county funding and philanthropy.

Councilmember Jordan thanked partners ACT and CityNet, who have also been our partners in Hands Across Montecito.

On my way out, I ran into Frog, who I’d met before at group feedings for the homeless in Santa Barbara. She’s been without a home since 2004. She will be moving to unit 13, as it’s lucky for her.

There’s a commitment to do a similar project in North County, but at least one more tiny home village is needed in the South County. The ideal site is a parking lot that’s not being used, or is under-used, and somewhat centrally located. If you know of one, let us know! Email info@montecitoassociation.org.

Sharon Byrne is the Executive Director of the Montecito Association