Raleigh construction sites remain in limbo
Posted April 22, 2010
Raleigh, N.C. — Construction projects across the country remain in limbo because of the current credit crisis. Banks don't want to lend money if there isn't a demand for new real estate.
There are dozens of projects in that category in Raleigh alone, but real estate experts hope 2010 will mark a turnaround.
A construction site sits empty near Crabtree Valley Mall. By now, it was supposed to be home to a Westin Hotel and million-dollar condos.
Instead, five years after the plan was approved, the pricey pads are nowhere to be seen. The developer pulled the website, and the sales office at the site has closed.
The site sits in Raleigh City Council member Bonner Gaylord’s district. While he's not sure of the future there, he knows the present situation is all about the economy.
“I hear indirect conversations about it. I see things posted online,” he said. “I do know the financial markets right now are very difficult, and procuring financing is as difficult as it’s ever been.”
The Westin Hotel project isn’t alone. A high-rise project in downtown called “The Edison” is also on hold because of financing. Many other construction projects, both big and small, are likely facing the same problems. City of Raleigh leaders say 89 plans that have been approved since January 2008 haven’t moved forward.
John Butler, president of the new homes division for Prudential York Simpson Underwood, said he thinks people’s purse strings may ease in 2010. Despite interested buyers, he says the Hue Condo Project downtown is in construction delay mode as well.
“We have a number of buyers ready to close if we can get the construction lender to say, ‘Yes, go for it,’” Butler said. “I’m hoping the banks will be on board and say, ‘Look at Raleigh. It’s doing well. We’ll need to support it the best we can.’”
One success story is North Hills where financing was secured before the downturn. A recent expansion included office space, apartments and retail shops. Gaylord is the manager there and said he hopes the boom is contagious.
“We’ve seen some uptick recently, and we’ve heard some anecdotal evidence of that,” he said.
State lawmakers passed a law last year to give developers more time. The law essentially stops the clock on site plans from January 2008 until December 2010. The City of Raleigh is also giving developers more time to get financing in order.