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| The Granby Tower construction site Tuesday as viewed from across Brambleton Avenue.
(Hyunsoo Leo Kim / The Virginian-Pilot) |
By Harry Minium
The Virginian-Pilot
NORFOLK
Construction stopped Tuesday afternoon on Granby Tower, a 34-story condominium project that would be the city’s tallest building, after the developer said his financ iers backed out of the project.
Buddy Gadams, president and CEO of Marathon Development, said the work stoppage is temporary and he has a commitment from another financial institution to bankroll the project.
When a sked how likely it is the project will be completed, Gadams said “very likely.”
Gadams said Stonington Capital of Greenwich, Conn., was to be the primary financier of the $180.5 million project but recently informed him that it would not close on the deal.
Gadams said that he had a “binding commitment” from Stonington and he is “disappointed” that the company would not go forward. A Stonington official declined to comment Tuesday.
Gadams sent an e-mail on Tuesday afternoon to more than 100 people who have purchased condominiums in his project blaming the “global credit crunch” for the work stoppage.
“We have found replacement financing with a top-ten national lender who sees the vision and potential of the Granby Tower project,” he wrote.
In an interview, Gadams declined to name his new financier, citing a confidentiality agreement. “All I can say is that we have a commitment from a financial institution and that construction should resume in a couple of weeks,” he said.
It is the second major downtown project that has been delayed by troubled credit markets.
Billionaire Robert L. Johnson pulled out of a $125 million hotel and convention center project, citing the credit crunch. Last week, the project’s local partner announced that LTD Management, a Chesapeake hotel developer, would fill the void.
Mayor Paul Fraim acknowledged that the shortage of credit is killing projects nationwide, especially condominium developments, because of the slowdown in the housing market.
“This is a very tough time to be building these high-rise condominium projects,” he said.
Yet he said he has confidence that Gadams’ project will be built. The project is so important to city officials that they agreed to provide a $22 million subsidy, scheduled to be paid once the project is complete.
Gadams “said he has no concerns about going forward, other than he’s trying to spend a moment to get his financial house in order,” Fraim said. “If Buddy says this is a temporary pause, then I have to believe him.”
The project has been beset with delays almost from the time it was announced three years ago, in part because the federal government briefly threatened to condemn the site, at Brambleton Avenue and Granby Street, for a courthouse expansion.
Meanwhile, a competing project announced about the same time as Granby Tower, the 38-story Westin Hotel and Residences at the Virginia Beach Town Center, has been topped off and is scheduled to open in November.
Granby Tower’s construction schedule has enough flexibility that the project should still open on time in October 2009, Gadams said.
The project is expected to have 302 residential units ranging in price from $270,000 to more than $1 million. Gadams said about half the units are sold, including nearly all of the most expensive units.
It also will have 15,000 square feet each of office space and retail space.
Granby Tower’s general contractor, Turner Construction Co., is slowing down work on the project “quite a bit” to lighten Gadams’ expenses, said Turner Vice President Chris Jahrling .
“We’re confident in Buddy and are standing by him,” Jahrling said.
Other city officials expressed dismay that work has stopped.
“I hope it’s temporary,” said City Councilman W. Randy Wright . “This is such a huge project for the city.”
Councilman Paul R. Riddick said he isn’t surprised to hear Granby Tower has had financing problems given the state of financial markets.
“This is probably the most ambitious project we’ve had proposed for downtown,” he said. “But I’m sure it will happen. Buddy Gadams has put so much into it, both his money and his heart.”
Staff writer Gregory Richards contributed to this report.
Harry Minium, (757) 446-2371,
harry.minium@pilotonline.com
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People
People also need to understand that this joker has put not only the city in a bind, but the many subcontractors that hold the contracts to build this stupid thing. A good friend of mine works for one, and now they are left in limbo because of the financing. It's going to be a trickle down effect folks. Companies who bid to do this job, when there is no job, will start laying off their own people and so forth. I say, give the $22 million back to each and every tax paying homeowner in Norfolk. We've been bent over enough by our dear city leaders.
George Carlin said it best...
And I will repeat it again...
"It's a big club folks, and we ain't in it!"
But be sure to catch the latest rage on TV tonight!
Ironic Turn?
Maybe the Feds wil finance it as an expansion of the courthouse.
Newsflash!!! This thing should not be built.
This is a profit raising venture for a private developer. It is partialy paid for with property tax funds. Namely $22M. Each resident of Norfolk both rich and poor has contributed to the purchase of these millon $ plus residences for the rich. If this project is not built, the lot could actually be used for the highest and best use driven by economic factors. This project is not the HABU and the fact banks won't finance it, and that it is not selling, proves it. Here in Atlanta condos are still going up and being sold driven by real economic factors and not subsidized with our tax dollars. I fled Norfolk for this very reason. Crushing property tax increases in Norfolk and subsidizing the wealthy.
News Flash
They never said the thing wouldn't be built. I mean, what would be more beneficial, seeing this through to the end or just ceasing from construction because the money ran out, even in light of the fact that another financial source is waiting in the wings? Let's be more positive people. This is the same negativism that has been stifling us for decades...time to move forward.
Gaddams in a Corner, City Council in Denial!
Okay, financing with Stonington took forever and was " binding committment." They are now history. Gaddams says he has a new committment with another lender. Last spring Gaddams says about half the units sold. Now he says about half the units sold (why only 100 emails sent to buyers?). So, he has not sold any further units. Sounds like Stonington backed out because no one was buying (it was probably a clause in thier contract). Good luck finding another financer. Also, what buyer would tie up their money in a questionable condo deal now?
It will not be built this decade!
?? Give me a break. Gadams was dealt $22M of free property tax payer money to fund his little private venture. Hardships my rear. This joker has been spoonfed. No developer in his right mind would have gone forward with this long ago in due dilligance stage. If banks won't fund, it's a dog. Less than half sold at this point? In development world that is total failure. BTW, they aren't "sold" until closing occurs. A smart investor would flee at this stage of game with only half sold. New vacant units will compete with investor units for sales. This boondogle should never have been funded with our hard earned tax dollars. Our prop taxes have been going up at around 25% yr to fund the private playboys. Vote these thieves out of office.
Kirk C you have been lied to
First and foremost, Gaddams knew the federal government planned on building the court house there because there entity that sold the property told him way ahead of time. The Mayor knew it as well and they both lied to the press regarding this. It seems you don't want to see that Buddy Gaddams is anything but a straight shooter. He and the City have perpetually lied to the public over and over again. These posts sir, come from the citizens who have been high jacked from their rights for way too long with abuses to the cities funds with out regard to their say so. This is a disgusting display carried on by the elected officials assisting a favoured son of the so-called Virginia elite. I agree, it is high time for a federal inquest.
Ironic
On a web forum I visit, locals were criticizing the Virginian-Pilot for being too harsh, perhaps negative on GT. I read that comment, then remembered I needed to check for replies to my comment on the Duck Inn Condo story. I navigate in a new tab to Pilot Online, and low and behold the Breaking News last night was Granby Tower Financing never materialized. I hate to say it, but the condo boom was 2005, it's 2007. People in tents for 3 days to buy Miami condos, to resell their buy option for $50K more in the same day seems like a distance memory, even though that was only 2 years ago. The Urban Planeters say I'm negative, but I see myself as realistic and everyone else has their heads in the clouds.
norfolk
Get your stuff together Norfolk... this is the 2nd hotel in a month that somethings wrong with the financer.
Schadenfreude
Give Gadams a break. He's a straight shooter who has been dealt a series of hardships--from fed's attempt to condemn his property so they could expand the courthouse to difficult financial circumstances to skyrocketing costs. I am confident that another financier is indeed in place.
Comments from other readers are simply schadenfreude, a German word meaning pleasure derived from the misfortunes of others.
Within a few wks we'll know if the $$ and project will be up and running.
“binding commitment”
Doesn't seem to be very "binding".
Pretty sad
From the photo they really haven't even begun to get started whereas the Westin Hotel is pretty much a done deal. I wonder how much longer it would take if the financing were in place. Also sad that the city is putting out $22 m of their own money as an incentive. On top of that, only half the units are sold. $180 m is a lot, plus the $125 m convention center how many more of these projects can the city support it sounds like a lot of the Norfolk projects face serious challenges ahead. I'm for it as much as the next guy but if the money just isn't there ...
More Lies, From Gaddoms, the Mayor and now we can see how Ridd
Now you see how they approved that money behind closed door? Riddick gets a piece of the kick back also if he goes by and supports the country club kid. The mayor and Gadoms have lied to the public straight through this from get go. Its high time the public demand the Feds come into investigate a absolutely corrupt city government.
News Flash
Sinkholes developing on Granby Street; but prosperity is just around the corner!
New Financier You Bet!
The citizens of Norfolk. oh, sorry, it's confidential.