Bad news about City Walk

From the Business Times:

Many lenders have stopped extending common forms of construction financing amid the debt market turbulence. Combined with falling prices and fears of glut in supply, that’s sending developers throughout the city back to the drawing board.

Olson is the most dramatic example. The company confirmed it ceased construction on its 252-unit, seven-story City Walk project July 24, saying general contractor UPA California stopped work on the site at 1260 Martin Luther King Jr. Way. Olson declined to comment on when construction might resume, and city officials said they had no indication from the company on when the project might start up again.

Dick Whitney, a senior vice president at UPA, said the company had not been paid by Olson, filed suit against the company and is now busy working on other projects. Olson declined to comment on UPA’s allegations.

I guess we’ll have to wait who knows how long for the world’s largest Starbucks, which I heard was going in the project (and no, I haven’t taken the time to confirm that rumor).

6 thoughts on “Bad news about City Walk

  1. dto510

    I noticed they stopped construction – I figured they were trying to slow down or something. Olson is a very large company, so it’s odd that they would have cash-flow problems (though they recently announced very poor earnings). Their sales office is still open.

  2. Steve R

    It isn’t surprising that there’s fear of a glut in a down market, but it does seem a little short-sighted. Downtown really seeems on a roll now, but Olson will complete it sometime, the real estate market will rebound sometime.

  3. dto510

    I don’t know what evidence the SFBT has for saying that “developers throughout the city (are going) back to the drawing board.” Who knows what’s up with Olson? Maybe they just need a few months to restruture their construction financing. Steve R, you’re right – the DTO is on a roll and one delayed project isn’t a big deal in the long-term.

    According to the SFBT, the City Walk Starbucks will be 2500 square feet, BTW.

  4. V Smoothe Post author

    dto510 –

    I don’t know where that line in the article came from either. Later on, the story talks about the slow progress of the Dones project near Uptown, but basically just says that there were contractor issues and that it will be completed in the spring.

    Then there’s this:

    Over the past six months, three of the projects on the city’s official list of “Major Development Projects” have been withdrawn or become inactive.

    They include a 356-unit condo tower at 226 13th Street, a 315-residential-unit project called Cathedral Park at 2100 Martin Luther King Jr. Way in the Upper Broadway district of downtown and a 43-story tower at 1930 Broadway that was to mix office with housing, retail or hotel and is being reconfigured.

    I don’t know anything about Cathedral Park, but the other two don’t surprise me at all. Neither ever got very far off the ground. 226 13th had significant community opposition and I don’t think anyone took the tower at 1930 seriously. And if you look at the major projects list, 3 buildings is hardly a significant dent.