Resort Developers
| October 23, 2008 - Ritz-Carlton Hotel and Residences, Vancouver B.C. | |
Ritz-Carlton condo project suspended in Vancouver Construction of one of Vancouver's most prestigious condominium projects has been halted, but the developer says design changes, not the international credit crisis, are behind the move. |
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Full Story - Below
Update February 25, 2009 Officially Dead |
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Construction of one of Vancouver's most prestigious condominium projects has been halted, but the developer says design changes, not the international credit crisis, are behind the move. Work halted on the Ritz-Carlton construction site on Friday, and crews did not return on Monday after the weekend, leaving a giant hole in the ground near the corner of West Georgia Street and Bute Street in the heart of Vancouver. but the building's developer Simon Lim, president of the Holborn Group, told CBC News financial concerns were not behind the decision to put the project on hold. According to Lim, the work was halted so some design changes to the parkade can be made, and it made no sense to keep crews working. The sales office is open by appointment while those changes are underway, he added. Bob Rennie, who works on marketing the project, said 50 per cent of the condominium units were pre-sold. "I've just been instructed by Holborn to make it clear that it is a suspension of construction until they go through redesign," Rennie said Tuesday. Advertising signage around the construction site was missing on Tuesday and construction trailers had been removed from the site. About 50 per cent of the excavation for the foundation of the project had already been completed. The 60-storey tower, which twists 45 degrees as it rises, is an Arthur Erickson design. The design features a high-end Ritz-Carlton hotel on the lower floors and 123 luxury condos on the upper floors priced between $2.5 million and $10 million, with the penthouse priced at $28 million. Holborn's next project, The Hills, is now delayed until the new year. The Hills, at Nanaimo Street and Kingsway, is to offer more than 280 units in a 22-storey highrise tower, a 6-storey mid-rise and a few townhomes. Jennifer Podmore, a real estate market strategy consultant with MPC Intelligence in Vancouver, said confusion and uncertainty are prevailing in the industry. "You're seeing a lot of people just taking a deep breath and waiting a few months and really studying what's happening with the consumer confidence and what people are saying to figure out where people are going next," she said. Update February 25, 2009 $.5-B hotel-condo project dead in waterThe half-billion-dollar Ritz-Carlton hotel-condo project in downtown Vancouver is officially dead -- a victim of the global recession. Buyers who purchased luxury condos in the proposed 60-storey tower are receiving letters informing them of the project's cancellation this week. The letter from lawyers representing developer Holborn Group states that "worldwide economic turmoil" has had a significant negative impact on the sale of units in the project." Update Story - Canada.com
Update February 26, 2009 Putting off the RitzDeath of luxury Vancouver development reflects negative trends in demand and tourismThe downtown Vancouver site that was to be the home of a luxurious Ritz-Carlton skyscraper is now just a muddy pit, the empty frame of a parking garage that was to have been capped by a 60-storey tower. The hole on West Georgia Street, surrounded by hoardings and ignored by most passersby, is a stark symbol of the end of billions of dollars' worth of spending plans blown apart by shifting trends in finance, construction and travel. The Ritz project, a $500-million landmark that was to combine a 20-storey hotel with 40 floors of condo units, was cancelled by Vancouver-based Holborn Group on Tuesday, reflecting negative trends in both residential demand and the tourism sector. And in being shelved, the hotel becomes part of what amounts to a nationwide spending freeze. In its key annual survey of what businesses and governments plan to do with their money, Statistics Canada yesterday said total investment in non-residential construction, machinery and equipment is expected to fall to $237.5-billion in 2009, down 6.6 per cent from 2008. The biggest pullback is in the hotel and restaurant business, which is expecting a 37.7-per-cent drop in outlays. That prospect is not surprising to James Askew, president of rareEarth Project Marketing, a Vancouver firm that specializes in recreational resort projects. Over the past few months, two of his clients – one in the Okanagan and one on Vancouver Island – shelved projects and he expects others may follow suit. “It's a smart decision, because a lot of these [projects] are multiphased,” Mr. Askew said. “The last thing you want is to jump into the marketplace just as it's starting to change and not knowing how long it will take to correct.” In Ucluelet, on Vancouver Island, the $50-million Black Rock Oceanfront Resort opened last month, squeaking on to the market before conditions deteriorated. “We sold it when interest was at its peak,” said Mike Duggan, co-developer of Black Rock and president of Boutique Hotels and Resorts, which manages several properties in British Columbia. “I'm now focused on getting people out to the resort and letting them see for themselves – I think it has potential to draw people to a new destination in Canada. “People are familiar with Tofino, but less so with Ucluelet,” Mr. Duggan said. The new resort will face tough conditions. A separate release from Statistics Canada yesterday showed that American tourists to Canada were at their lowest level in recorded history for this time of year. The depth of the planned pullback in capital spending in these tourism-related industries is somewhat surprising because, until now, employment in the sector has held up fairly well, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc. “The big cutback suggests there is a much darker outlook for tourism, more broadly speaking, or at least that's the perception the industry is taking,” Mr. Porter said. With supply outpacing demand, it's not a bad thing for spending on new developments to decrease, said Neil Downey, managing director at RBC Dominion Securities Inc. “It's probably hitting the wall, in some regards, because there's an inability to obtain financing. But frankly, it should hit the wall, because it's unlikely there's sufficient demand for the next two years to require any additional capacity. We don't need any more rooms is the bottom line.” The downturn should be seen as a prime opportunity for renovations, Mr. Downey said, adding that labour and construction costs are likely to become more affordable. Those trends are being closely watched by Bruce Langereis, president of Delta Land Development Ltd., the developer behind the Residences at Georgia, another high-profile office, residential and hotel project destined to rise on West Georgia Street. That project is being largely internally financed, Mr. Langereis said, with Delta Land committed to the tune of $100-million. “We are pouring concrete,” Mr. Langereis said, adding that he is balancing revised constructions costs with a planned completion date of 2011 or 2012. “I tell anyone who has doubts to come to the site and see it themselves.”
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