As it pursues its purchase of the 240-acre Union Pacific railyard, Millennia Sacramento came out Friday with a revised plan to show its commitment to the deal, a plan that calls for 10,000 units of housing - more than twice the amount initially envisioned.

The developer unveiled its new plan to the city proposing a mixed-use "urban village" jampacked with enough housing for 20,000 people, as well as office, hotel and retail space. It also calls for a Railroad Technology Museum and a chic public market space similar to San Francisco's popular Ferry Building, and it reserves space for a downtown arena.

Developer Millennia Sacramento has been in purchase talks for the past 2 1/2 years with UP. Although talks continue, filing the development application signaled a "major breakthrough," said Suheil Totah, vice president of Thomas Enterprises, Millennia's controlling entity.

"This has been a very long journey to this point," Totah said at a hastily called news conference. "We are, and remain, committed to this project."

Totah said Millennia would begin working with the city on the application next week. The purchase deal with UP should close by year-end and, barring further hitches, construction could begin within 18 months.

Millennia's plan would be one of the nation's largest infill projects, with 37.6 acres designated for residential use, 39.2 acres for general mixed use and 25.5 acres for commercial and office space.

And instead of the 4,500 lofts, apartments and condominiums once proposed, the application calls for a whopping 10,000.

Sacramento's red-hot housing market caused the developer to more than double the number of units, Totah said. They will be both rental and for-sale, priced at market rate and for low-income residents.

Michael Ault, executive director of the Sacramento Downtown Partnership, said the plan clearly answers calls for more housing in the city's central core.

"The housing will activate downtown," Ault said, adding it also would help lure new retailers.

Kay Knepprath, a community activist who has pushed to save the railyard's historic depot, agreed Millennia's application signaled a major milestone.

She said progress on the planned intermodal, a major transportation hub that will include the depot, was stalled until Millennia's application was filed.

Now, an environmental study can begin.

"A big bottleneck has been opened," Knepprath said.

Millennia's announcement comes on the heels of reports that a trio of prominent local developers had submitted a competing offer for the railyard. The team of David Taylor, Tony Giannoni and Angelo Tsakopoulos said they joined the fray as they watched talks with Millennia make little progress.

Earlier this month, Carol Shearly, the city's new growth manager, told The Bee that repeated postponements of the railyard deal had "become a joke."

On Friday, however, Shearly voiced the city's strong support for the project and lauded the plan as a way to contribute to downtown's renaissance.

"We continue to have a strong partnership with Millennia," Shearly said.

Totah downplayed the competing offer, saying rumors were untrue that negotiations that began in 2002 had only recently restarted between Millennia and Union Pacific.

Mike Casey, UP's local project manager, said the railyard's position was unchanged and it isn't considering other offers.

"The door on that has been closed," Casey said.

Taylor, Giannoni and Tsakopoulos could not be reached for comment Friday.

In July 2004, Millennia announced it had reached an agreement with Union Pacific to buy the railyard and predicted the two parties would close the deal by the end of the year.

But the issues turned out to be more complex than either side imagined, Totah and Casey said.

During a title search, they learned that because a bank of the American River had been on a portion of the railyard, arcane case law placed nearly 30 acres of the property under the control of the California State Lands Commission.

"That caught us all off-guard," Totah said.

Said Casey, "We couldn't continue to negotiate with the concern that we couldn't close the transaction."

The issue was settled to the satisfaction of UP and Millennia on Thursday, allowing Millennia to go forward with the development application, Casey said.

 
Suheil Totah

The issue still needs to be settled with the state, Totah said.

The other major hurdle centers on the environmental cleanup of the Superfund site. As it continues its cleanup of the site, UP has discovered higher levels of toxic materials than anticipated, Casey said. That in turn changes the scope of work agreed upon by UP and Millennia, he said.

Totah also said Friday he has resigned from the Morrison and Foerster law firm to head a new Sacramento office of Thomas Enterprises and lead the railyard development effort.