Wednesday, August 6, 2008

Waterfront Pearl Unable to Pay Bills

From the Oregonian:

Hoffman Construction has slapped developers of the Waterfront Pearl condominium project with a $15.8 million construction lien.
Bart Eberwein, Hoffman vice president, said Monday that the Portland construction company filed the lien in late July because it has not been paid in more than two months.
The developer of the two buildings on the west bank of the Willamette River near the Broadway Bridge said that the project is on track and that the lien is a momentary glitch.

Paul Mayer, of Vancouver, B.C.-based Pemcorp Development, said the building's rising price tag has forced developers to restructure their loan agreement with their lenders. While negotiations continue, the developers have not taken any draws from their constructions loans, which meant that Hoffman didn't get paid.
Design changes and other factors pushed the building's price tag from slightly more than $80 million to about $91 million, Mayer said.
"This is a nine-figure financing package," he said. "It's not the kind of thing you can amend with a phone call."

Mayer said sales at Waterfront Pearl are going well, given the slowdown. About half the project's 194 condominiums have been sold. The condos range in price from $449,000 for a 921-square-foot one-bedroom unit to $2.8 million for a 3,300-square-foot, three-bedroom suite.
The "unexpected site conditions," combined with the building's complex design and changes requested by the developer drove up the price to beyond $90 million, Mayer said.
Hoffman last got paid in the spring. "There were a few late payments, then it went to zero payments," Eberwein said.
Mayer said he expects the problem to be resolved shortly, when the lenders agree to restructure the loan.


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