dt_toronto_geek
Superstar
That's not unexpected, but it's still sobering to read.
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Projects cancelled or on hold due to the Credit Crunch
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That's not unexpected, but it's still sobering to read.
H
Hydrogen
Guest
For many of them, it may be something more than merely being "on hold."
Ramako
Moderator
The silver lining to this is that, upon receiving their deposits back, some of these purchasers may turn around and buy into other projects that are already underway.
Archivist
Senior Member
An upbeat assessment from the ever-perceptive John Barber at the Globe:
Teflon T.O. skirts worst - for now
John Barber
March 3, 2009
The Canadian economy shrank by 3.4 per cent in the last three months of 2008, as you probably know by now. But did you know that last December produced record revenues for the Toronto Parking Authority? Or that ridership on the Toronto Transit Commission continues to climb, and is now at least 3 per cent higher than it was in January, 2008?
And what are we to make of the fact that cranes still stubbornly swing above so many building sites downtown? The national economy was collapsing like a media stock in January when the developers of the 66-storey Shangri-La condominium bought an ad (thanks, guys) to proclaim their acquisition of a $408-million loan to build the thing, which they are now doing.
Even if he wanted to help Toronto, which is doubtful, Finance Minister Jim Flaherty could never hope to create such a potent and focused stimulus as that. But the Shangri-La is only one of several large developments actively under construction in downtown Toronto. Just as surprisingly, applications to build more continue to flood into city hall.
Some projects have been quietly shelved or delayed, but only one of them - a specialized office building that is part of the MaRS research centre - has stopped in mid-construction. So far, there is no 21st-century equivalent of the notorious Adelaide Street "stump" that stood for more than a decade as testament to the speculative excess of the 1980s. Instead, a renewed Bay-Adelaide Centre is now preparing to welcome its first tenants.
The last big real-estate bust arrived in one fell swoop. Long-established industry giants disappeared in a matter of months. This one is slinking into town on tippy-toes.
"I believe that Toronto is in the best shape of any city in North America," said developer Stephen Diamond, who has been involved in both the Shangri-La and the 55-storey Four Seasons project in Yorkville, which also began construction in the face of the worst national economy in 40 years. "Buyers are closing, projects are going ahead and there are still people buying units."
"We're certainly suffering," he added, "but it's like there's this bubble over the city." Housing prices have dropped, but not nearly as much as they have in Vancouver or even Calgary.
Few observers, including Mr. Diamond, expect the bubble to last. But for the time being, at least, it certainly sets the city apart.
Many point to the site of One Bloor East - the super-tall apartment building that incited a buying frenzy when it was proposed at the height of the boom - as a crucial test. The project stalled when its major lender, Lehman Brothers of New York, went bust last fall. But developer Bazis International is still active at city hall, having agreed last week to pay more than $1-million to acquire a laneway adjacent to its site.
The company's consistent refusal to respond to media inquiries about the project's status invites suspicion. But as of now, the project's a go. So are two similar projects on Bloor Street West, currently under construction. Last week, Bazis submitted an application to build another one on property it owns across from the Royal Ontario Museum.
Nobody expects Toronto's resiliency to survive the macroeconomic shocks that are sure to arrive as a result of the global financial crisis. In the meantime, though, private investors continue to pump billions of dollars into the local economy.
Teflon T.O. skirts worst - for now
John Barber
March 3, 2009
The Canadian economy shrank by 3.4 per cent in the last three months of 2008, as you probably know by now. But did you know that last December produced record revenues for the Toronto Parking Authority? Or that ridership on the Toronto Transit Commission continues to climb, and is now at least 3 per cent higher than it was in January, 2008?
And what are we to make of the fact that cranes still stubbornly swing above so many building sites downtown? The national economy was collapsing like a media stock in January when the developers of the 66-storey Shangri-La condominium bought an ad (thanks, guys) to proclaim their acquisition of a $408-million loan to build the thing, which they are now doing.
Even if he wanted to help Toronto, which is doubtful, Finance Minister Jim Flaherty could never hope to create such a potent and focused stimulus as that. But the Shangri-La is only one of several large developments actively under construction in downtown Toronto. Just as surprisingly, applications to build more continue to flood into city hall.
Some projects have been quietly shelved or delayed, but only one of them - a specialized office building that is part of the MaRS research centre - has stopped in mid-construction. So far, there is no 21st-century equivalent of the notorious Adelaide Street "stump" that stood for more than a decade as testament to the speculative excess of the 1980s. Instead, a renewed Bay-Adelaide Centre is now preparing to welcome its first tenants.
The last big real-estate bust arrived in one fell swoop. Long-established industry giants disappeared in a matter of months. This one is slinking into town on tippy-toes.
"I believe that Toronto is in the best shape of any city in North America," said developer Stephen Diamond, who has been involved in both the Shangri-La and the 55-storey Four Seasons project in Yorkville, which also began construction in the face of the worst national economy in 40 years. "Buyers are closing, projects are going ahead and there are still people buying units."
"We're certainly suffering," he added, "but it's like there's this bubble over the city." Housing prices have dropped, but not nearly as much as they have in Vancouver or even Calgary.
Few observers, including Mr. Diamond, expect the bubble to last. But for the time being, at least, it certainly sets the city apart.
Many point to the site of One Bloor East - the super-tall apartment building that incited a buying frenzy when it was proposed at the height of the boom - as a crucial test. The project stalled when its major lender, Lehman Brothers of New York, went bust last fall. But developer Bazis International is still active at city hall, having agreed last week to pay more than $1-million to acquire a laneway adjacent to its site.
The company's consistent refusal to respond to media inquiries about the project's status invites suspicion. But as of now, the project's a go. So are two similar projects on Bloor Street West, currently under construction. Last week, Bazis submitted an application to build another one on property it owns across from the Royal Ontario Museum.
Nobody expects Toronto's resiliency to survive the macroeconomic shocks that are sure to arrive as a result of the global financial crisis. In the meantime, though, private investors continue to pump billions of dollars into the local economy.
yyzer
Senior Member
Archivist....great minds think alike, eh? we both even used the word "upbeat"....
T
terrafirma
Guest
Diamond just raised a $70 million fund targeting in-fill intensification sites. In fact, he just he just purchased something on St. Joseph's street.
(http://www.nationalpost.com/scripts/story.html?id=1343259)
His comments about the direction of the market are incredibly bias. He and
Barber and merely exercising civic boosterism to calm the masses and in Diamond's case his nervous investors.
This report is wildly over-optimistic in my opinion. I have been to City Hall planning meeting recently and the planners there note an eerie chill descending on the land. Applications have virtually ground to a halt.
I think the right attitude to the crisis is to acknowledge its existence and severity, recognize that there will be a necessary and possibly protracted period of absorption of all the unsold inventory that's flooding the market and a significant drop in prices, both sfh and condos, but look ahead to a period of renewed growth beyond that large hump that was the product of overspeculation, unrestrained lending and global credit turmoil.
Archivist
Senior Member
Not to contradict too much, but John Barber is just about the farthest thing from a civic booster that you can get. Instead, he's an insightful, thoughtful, accurate commentator on the scene here. He's merely reporting on a variety of indicators that the economy is holding up so far. He also comments, "Few observers, including Mr. Diamond, expect the bubble to last. But for the time being, at least, it certainly sets the city apart.", which to me is a recognition that things are likely to change.
Diamond is possibly another story.
Diamond is possibly another story.
AlvinofDiaspar
Moderator
terrafirma sounds familiar...
AoD
AoD
DaninToronto
Active Member
So do we ave a list of projects that have been canceled and one for those on hold due to the economy and not city hall rejecting them? I only catch tidbits here and there.
Archivist
Senior Member
There's not really much incentive if you are a developer to announce, officially, that a project is cancelled. There is an incentive to not move it forward and let it sit around, waiting to see if the market might recover. With many projects abandoned in the past, it's only after an enormous time that it becomes definite that it's not happening.
Mike in TO
Senior Member
Small list, some issues behind these cancellations or delays are not economically related:
Feather Factory Lofts - 44 Units
Woods of Aubergine - 100 Units
Promenade of Danforth - 143 Units
Leslieville Lofts - 158 Units
Idea - 266 Units
Minto King West - 307 Units
MaRS
The potential for more significant additions to the list are still a few months away, but there is a lot of ongoing work to prevent some of the issues that will cause cancellations to occur from happening. Hopefully many of those issues will be resolved in time.
torplanner
Active Member
I think that is the threshold right now in Toronto. If you're in the ground, you should have your financing in order to muscle through it. If you haven't broken ground... odds are you're on hold.
I know of one high end project that fairly received its final OMB settlements in the last year (after 5+ years of battling), settlements with all the neighbours... OP and Zoning in place ... and is now considering changing enough of the design to essentially throw all of that out with a new mid-market concept because there is no market for new high end right now (and won't be for a while).
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Observer Walt
Senior Member
Torplanner, I think that's it in a nutshell. Those under construction, will be built. They are mostly sold (70% or more), and pulling out now after going through the planning and approvals process and making the commitment to construction would probably be financially disastrous. If unsold inventory remains at completion of construction, some incentives could be offered for an inventory blowout. But the economy will, hopefully, be improved by that time, for most of these larger projects. I see few if any new holes going into the ground this year.
The "credit crunch" is the key. When this can be left behind and we return to more or less normal financial markets, some of the projects on hold will return to life. Much of this, in turn, depends on the U.S. We are in relatively good shape, but not exempt by any means from the problems in the financial system.
The "credit crunch" is the key. When this can be left behind and we return to more or less normal financial markets, some of the projects on hold will return to life. Much of this, in turn, depends on the U.S. We are in relatively good shape, but not exempt by any means from the problems in the financial system.
urbandreamer
recession proof
From what I hear, many of these high end projects (not specifically mentioned, but could affect: ice, u condos, etc) could be relaunched as cheapish entry level condos--say in the $170-$250k range.
But with the massive inventory of new 1 bedrooms hitting the market soon, I wonder if that strategy would backfire?
But with the massive inventory of new 1 bedrooms hitting the market soon, I wonder if that strategy would backfire?
torplanner
Active Member
How they can relaunch might depend on how tight their zoning permissions are. For example, if you got approval for a 100 unit condo (with nice big floor footprints for each unit), you might not be able to simply re-jig the floor to cram in more units because your zoning caps you at 105 units total.