Saturday, October 18, 2008
Downtown Project at A Standstill
By Richard Metcalf
Journal Staff Writer
The national banking crisis has struck in Albuquerque.
Construction of Anasazi Downtown, the nine-story condominium project at the southeast corner of Sixth and Central, was stopped after federal regulators seized the Kansas-based bank that was financing it.
"The only way I can explain it is the banking and financial crisis has hit home," said Vincent Garcia of Blue Dot Corp., the Albuquerque-based developer and builder of the $9 million project. "It's an amazing personal experience for us here."
The 90,000-square-foot Anasazi building has commercial space on the first floor, a parking structure and 45 residential condos on the upper floors. The building is about 85 percent complete, with 2 1/2 to three months of construction left, Garcia said.
The Federal Deposit Insurance Corp. took over the project's lender, Columbian Bank and Trust Co. of Topeka, in August. So far this year, a total of 15 FDIC-insured institutions have been closed, compared with three last year.
"When the FDIC closed the bank down, they sent notices to all of the bank's borrowers probably about 2,500 or more to secure new financing," Garcia said.
Construction continued on the Anasazi until Oct. 6, when about 150 workers at Blue Dot and its subcontractors were laid off, he said. Garcia said he will have to find a new lender to replace the loan to get the project going again.
"It's going to be challenging," he said, referring to the tight credit markets. "But I'm an optimistic person."
The project's shutdown occurs amid the nation's worst financial and credit crisis in years, which exploded in September after the yearlong mortgage meltdown. The nation's largest financial institutions choked under toxic loans, and Congress approved a $700 billion bailout package last month. Despite the federal assistance, banks remain wary of lending to one another or to individuals, making credit difficult to come by.
Brian Morris, executive director of the Downtown Action Team, said housing is critical to efforts to revitalize Downtown "so we're anxious to see the project restarted as soon as possible. But we understand it's a difficult time period, and finding a new financier is not going to be an easy task."
Morris said he has not heard of other developers facing similar problems, but he did say some in the difficult housing market are having to get creative with how they market their projects.
"Some wanting to sell their units are now having to lease," Morris said of Downtown projects.
Garcia said he hopes to be able to restart construction in 60 to 90 days, adding, "Maybe more, that's a conservative guess."
Blue Dot had presold 30 of Anasazi's 45 residential units. By law, sales can't be finalized until the project is completed. "Those sales are now in jeopardy, because we can't guarantee a delivery date," he said.
The northbound lane of Sixth SE, south of Central, has been closed to traffic in front of the project. A decision on whether to reopen the lane will likely be made next week, Garcia said.