Yeah, if you actually read the details of the article, it's not really a big deal. It'll just get finished a couple of years later than they had originally hoped. HR Reit had a difficult enough time financing this project, this is probably to reduce overall costs to get the tower complex done, then focus on the south block later. The do have an obligation, from a regulatory point of view, to finish it within a certain timeframe.
This project will be a real gem, and the south block, is underrated as far as I'm concerned with its contribution to the project and the overall downtown.
Quote:
In a statement released Wednesday afternoon, Larry Froom, the REIT’s CFO, said: “To be clear, the operative word in this statement is ‘defer’. The south block is not being capped or cancelled. H&R is deferring the south block as a result of the current economic climate.”
He said the REIT is “making use of the phasing ability to focus on the north tower construction.”
“Construction continues on the below grade of the south block and has been designed to accommodate the above grade south block development. Later this month, H&R will provide further details on overall developments regarding financing of The Bow,” said Froom, adding that progress on the north tower is on schedule.
Calgary Mayor Dave Bronconnier said the REIT is meeting all of its obligations and commitments to the city regarding the project and its development permit conditions.
“And the commitment to the city was that they would start the south block within one year after occupancy of the north block,” said Bronconnier. “Now, what they had hoped to do a year and half ago when the world was different was effectively . . . (when) were about three-quarters of the way up (with the tower) then start the south block. But because of prices, the economy . . . they’re matching their private agreement that is between H&R REIT and EnCana to match the regulatory obligation which is to start the south block within one year of occupancy of the north block.”...
“Their (development permit) obligation within one year is to reconstruct that building on that site and provide a cultural and amenity space within the building,” said Bronconnier.
Alan Boras, spokesperson for EnCana Corp., said the company has reached an agreement with the REIT to essentially phase the south block development.
“They are working toward taking it up to grade and essentially that will be filled with a parking lot up to ground (level),” said Boras. “So they’re going to phase the second part and they’ve done that because of the economic environment.”
He said that as the REIT was working on its financing for the Bow project it approached EnCana and asked the company to consider a deferral of the south block development.
“So really this is just a change in timing. And this at the time was seen as a vital step . . . in keeping the Bow project on track so that it (tower) would be constructed,” said Boras.
He said that despite the deferral the intention is over time to build the south block.
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