Economy putting chokehold on luxury highrises, too
By Jason Buckland, Sympatico / MSN Finance
If you live in a major Canadian city these days, chances are there’s a prime piece of downtown real estate ensconced in scaffolding and ready for construction.
Only, look a bit closer next time. There’s probably not much going on. What you’re seeing is the illusion of development.
It’s become fairly well-documented now just how the economy’s freefall has stalled construction on big-ticket highrises and luxury skyscrapers across the country. What’s interesting is just how bad the problem has gotten.
In Toronto, sitting at the crossroads of the city, is a gaping expanse at the corner of Yonge and Bloor Sts. Advertised on its website as the future site of “Canada’s tallest residential condominium/hotel/retail development,” construction doesn’t seem to be going anywhere as, presumably, investors (from Russian oil money) had to rear back on financing when the downturn hit.
What’s been left behind is a scar on the city impossible to ignore. Cranes and concrete are par for the course down on the city’s waterfront – as new condos go up seemingly each week – but this is the heart of Toronto we’re talking about. A once-popular corner with a great burger joint I used to go to, those store-fronts were destroyed to make room for the 1 Bloor St. behemoth, only to be insulted by nothing popping up in their place.
And while some locals are pondering what could be done with the space (like, say, a cool civic square), it’s grown clearer and clearer that the Big Smoke isn’t the only city with this problem.
Vancouver’s $500-million, 60-storey Ritz-Carlton hotel and condo tower has been kaboshed indefinitely, too. Financing during the global credit crunch seems to have evaporated, forcing developers to refund pre-purchased units to their buyers at prices as high as $10-million.
In Chicago as well, south of the border, construction has wheezed dead on a proposed 2,000 foot tall skyscraper. The Spire, it’s called, would be the largest tower in the Western hemisphere.
But since January, like similar projects all over the world, there now sits a vacant hole where the Spire is to be built – an opening this economy won’t allow to be filled.