Vancouver developer pulls out of condo projects due to financing difficulty

Last Updated: Tuesday, November 27, 2007 | 4:50 PM PT

CBC News

Skyrocketing construction costs driven by Vancouver's sizzling real estate market have forced a developer to pull out of two projects worth $95 million.

The site where the Elyse was supposed to be built is being cleaned up to be put back on the market.
(CBC)

Developer Bill Eden, who owns The Eden Group, told CBC News that because of financing difficulty it's not possible for his company to finish the projects.

"The industry itself — very difficult to get financing," Eden said on Monday. "Basically, it's extremely uncertain whether I can actually complete that building."

That development project is the Elyse, a 119-suite condominium complex planned for E7th Avenue and Scotia Street in Vancouver. There are 55 people who made presale purchases beginning in February.

But the company is going to send out letters to the buyers, saying the project was not going ahead and their deposits will be returned, Eden said.

Vancouver real estate developer Bill Eden says small and medium-sized developers get broadsided if there are delays or cost overruns.
(CBC)

"It's a financing issue. It's a scheduling issue. And it's a labour issue," he said. "I refuse to put my investors in harm's way — we're selling the site."

Another Eden project, a $30-million estates townhouse development, has also been shelved. That site is also for sale.

But Eden said the development on E11th Avenue and Sophia Street, called the Sophia, is well underway and his company will compete it.

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said the Eden Group did the right thing.

Bill Eden's company will be able to complete the Sophia project on E11th Avenue and Sophia Street in Vancouver.
(CBC)

"Right now it's an annoyance to these people. It could have been a significant financial problem to these people had it gone on any further," Simpson said.

Simpson said for buyers the bigger the developer the safer the bet a presale will eventually turn into something they can move into.

Small and medium-sized developers get broadsided if there are delays or cost overruns, added Eden.

"There are certain developers here in town who have hundreds and hundreds of millions of dollars as backup to ensure they can finish buildings and I can tell you I am not one of them."