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Thread: Gateway Midtown... Cancelled

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    Default Gateway Midtown... Cancelled

    http://www.canada.com/calgaryherald/...1-eede18ff4022

    CALGARY - Construction of a high-profile multi-million dollar Beltline residential condominium project, which included two towers at 26 and 30 storeys, has ground to a halt due to elevated costs, the Herald has learned.

    The news regarding the Gateway Midtown development at the corner of 10th Avenue and 4th Street S.W. comes at a time when the number of new condos under construction in Calgary is at a near record level while the number of condos for sale on the MLS market remains high as well.

    A recording on an information line for the Gateway Midtown project says: "You have reached the Gateway Midtown purchaser information line. At this time, we regret to inform you that Resiance Corporation will not be proceeding with construction of Gateway Midtown as insurmountable construction costs have made this project financially unfeasible."

    "If you have purchased a suite at Gateway Midtown and you are calling about your deposit, rest assured that your deposit will continue to be held in lawyer's trust or covered under the provisions of the Alberta New Home Warranty Program and therefore protected under the terms of these two provisions. We are unable at this time to answer further questions about your deposit as all contracts associated with the project, including your purchase agreement, have been assigned to the senior lender. You will be contacted by an administrator acting on behalf of this lender to advise you of the status of your contract to purchase. As any questions regarding your contract can only be answered by this administrator, we ask for your patience and understanding while this unavoidable process transpires."

    In a statement to the Herald, Resiance Corporation said the Gateway Midtown project is "suspended, at least temporarily, pending the decision of the senior financial lender whether to resume construction." The decision was made because of "dramatic escalations in construction costs, unabated since the project launched in 2005."

    There are more than 500 purchasers of units in the 650-unit project.
    The company said this decision has also resulted in the downsizing of 41 Resiance salaried and hourly employees.
    The number of condos currently under construction in Calgary is 10,643 - 102 units shy of the record established in May, and 44 per cent higher than a year ago, said Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corporation.

    "I have heard rumblings that this might occur," said Corriveau, of the general condo market in the city and projects not proceeding. In the condominium resale market, the Calgary Real Estate Board at the end of July was reporting the month-end inventory of condos for sale in Calgary at 2,888. There were 1,183 new listings added in the month, up 5.91 per cent from July 2007, and sales for the month showed an 11. 28 per cent decrease (535 units) compared with a year ago while the average days on the market to sell a property rose to 52 from 33.

    Those numbers had an impact on MLS sales prices. The average sale price in July for a condo in the city was $296,338 which was 6.98 per cent less than a year ago ($318,582) while the median sale price dropped by 8.19 per cent to $273,500 from $297,900 in July 2007.

    "What's occurred in 2008 is we've seen a sharp pullback in resale demand. We're seeing a weakening in rental demand and the single-detached new home market has also pulled back in their production quite strongly," said Corriveau. "Now the (new) condominium market stands out as anomaly. It's bucking the trend of what's occurring in every other housing market within the Calgary CMA.

    "That poses some concern as you consider the indicators that have fuelled weaker activity elsewhere, it's surprising that the multi-family market hasn't responded."

    Those indicators include weaker net migration here, employment growth softening, income growth moderating, rapid price escalation in all markets leading to weaker demand.

    But Corriveau said one of the factors acting in the new condo market's favour is the time horizon to construct condo projects and eventhough we are currently faced with weaker demand, the vast majority of these projects aren't scheduled for completion for another year to three years or more. [email protected]

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    wow, so those people can't even get their deposit back?!...
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    Default Re: Gateway Midtown... Cancelled

    Originally posted by Celica TVS3

    insurmountable construction costs have made this project financially unfeasible.
    <cough> bullshit <cough cough>

    Anyone know someone that works for Resiance... do they still have a job?


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    Originally posted by oz388
    wow, so those people can't even get their deposit back?!...
    How did you come to this conclusion?

    "If you have purchased a suite at Gateway Midtown and you are calling about your deposit, rest assured that your deposit will continue to be held in lawyer's trust or covered under the provisions of the Alberta New Home Warranty Program and therefore protected under the terms of these two provisions.

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    Originally posted by 88CRX


    &lt;cough&gt; bullshit &lt;cough cough&gt;

    Anyone know someone that works for Resiance... do they still have a job?

    I thought it said in the article that 41 people had been laid off

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    From what I understand when you put a downpayment on a house/condo the money doesn't go to the developer, but rather to a trust fund that holds the money till you take possesion.

    Once you take possesion then the money is turned over to the developer.


    However when/if Ressiance files for bankruptcy and closes the doors I'm not sure what happens The banks are gonna want some money from someone though.

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    Originally posted by The Cosworth

    I thought it said in the article that 41 people had been laid off
    Yea I know.... 41 people is alot to "layoff". How many people do they have left?

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    Originally posted by oz388
    wow, so those people can't even get their deposit back?!...
    No.

    Their deposit is protected.

    What they don't get back is the appreciation of the property had it been built. Especially if they bought in 2006.

    This has happened a bunch of times. Montana is one and there is another on 4th street and 13th ave that has done it twice.

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    did the sales start before the boom?
    i guessing there is gonna be alot of pissed off people if it was

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    Originally posted by The_1
    did the sales start before the boom?
    i guessing there is gonna be alot of pissed off people if it was
    I don't think it was prior to the boom.


    Originally posted by benyl

    This has happened a bunch of times. Montana is one and there is another on 4th street and 13th ave that has done it twice.
    Same thing happened on Skytower (McLeod & 10th ave) as well.... although they didn't even make it into the ground before the plug got yanked

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    This is GOOD news....I have much better use for my deposits with them now

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    Surprise surprise.

    I hope they at least have enough money to cap the giant hole in the ground.

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    Originally posted by 01RedDX
    Surprise surprise.

    I hope they at least have enough money to cap the giant hole in the ground.
    Don't worry, they will be back. It will just cost you way more to buy a unit!

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    Originally posted by benyl


    Don't worry, they will be back. It will just cost you way more to buy a unit!
    I see what you're getting at, but I doubt it's the same scenario that was so common during 05-06. The market is just not the same.
    However, they seemed to be 90% sold out, so you may be right.

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    This is probably good news to lots of people. They were probably wondering how to get out of their condo without too big of a loss.

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    Originally posted by benyl


    Don't worry, they will be back. It will just cost you way more to buy a unit!
    Which is what I won't be doing....they were douches with a cash call already once on me....not this time, Resiance. That money will go to where I WILL make money....

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    Fuck.



    The unit I had locked in for $213k in 2006 had just sold in March for $299k of this year. I was really hoping this baby would be able to be a nice rental property for me in a few years.

    So what the heck happens now?
    "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
    -Thomas Jefferson 1802

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    Originally posted by The_1
    did the sales start before the boom?
    i guessing there is gonna be alot of pissed off people if it was
    I think they did started selling sometime in 05 then kept selling throughout the boom. I specifically remember one of my old co-workers buying before the 06 boom and was all happy. UNTIL in summer of 06, he got a letter that said something like, due to escalated costs he has to pay an additional sum on top of the agreed purchased price.

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    I know that Gateway Midtown had to deal with quite a bit of water issues (water table and springs) during construction that caused some serious delays.

    At the end of the day, this market will seperate the men from the boys in terms of condo developers.

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    Originally posted by cdnsir


    I think they did started selling sometime in 05 then kept selling throughout the boom. I specifically remember one of my old co-workers buying before the 06 boom and was all happy. UNTIL in summer of 06, he got a letter that said something like, due to escalated costs he has to pay an additional sum on top of the agreed purchased price.
    In all fairness, the cost increase was nothing too crazy. They took the new market price less purchase price / 3 and that was your increase. Mine went up about $15k total to $213 but is still worth more than that in today's market. New 1 bedroom condos cannot be had in the downtown core for $215 and those Sasso pieces of crap near stampede ground are so over priced its not even funny.

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