medallion project canceled!
No one saw this coming.
Another victim of rising construction costs and a wallowing economy, the Old Bank District’s Medallion project (yes, the one under construction at 4th and Main) has been put on indefinite hold, reports the Downtown News:
“It’s horrendous out there, absolutely awful,” Farkhondehpour told Los Angeles Downtown News last week, referring to the retail and residential rental markets.
“Financing was all arranged; financing is still in place. I had to call the lender and tell him I didn’t want to build something I can’t rent out,” he said. “That’s been the concern for the past seven or eight months as it’s been getting worse every month. The contractor came up with some 20% cost increases and that was like, let’s just shut the damn thing down and forget about it.”
Farkhondehpour leaves us in anticipation over a possible uptick in the market by mid-2009, at which point he will loose funding for construction.
In the meantime, maybe Farkhondehpour will consider turning the project site into a makeshift park for the neighborhood, or something other than a fenced pit since plans are uncertain. Although the developer’s grim remarks in the article suggest he is making tough financial decisions that leave little room for courtesies.
-Medallion Project Abruptly Halted (Downtown News)
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7 comments
Wow…well, in a way, ever since the “slowdown” started back whenever, i always knew that some project being built would en up this way…It’s a shame that we won’t see construction here, at least for a while. But look at the facts: Sure, the whole market is in trouble. But by the end of this year, it will have bottomed out, and will only go up from there. Second, this particular site is WAY too valuable to sit and undeveloped pit for years. And third, this isn’t the first time this has happened to Downtown. Look at Vista Hermosa, that was stalled at 75% done for years before the LAUSD paid god knows how much to go back in and build it. And, more recently, Concerto, which at this point last year everyone thought was dead for sure. Just look at how that one has totally bounced back. So, my point is, Mr Farkhondepour just has too much money to be made on this site, with its prime location. So, under my calculations, expect to see this get started again within the May 2009 date.
Its good to see that he is being logical and rational.
I personally think that things won’t start to look up until the fall of 2009 at the earliest.
But maybe more like Spring 2010 seriously, honestly.
I suspect as constuction work slows down, the contractor will find a way to make the 20% cost increase go away.
“I suspect as constuction work slows down, the contractor will find a way to make the 20% cost increase go away.”
With fuel costs going up, the contractor may not have that option. It’s bad out there right now.
This reminds me of the gentrification of the East Village in New York. It got going in the 80s then ground to a halt after the real estate crash in the early 90s. It took ten years for development to pick up again. Today the East Village is one of the hottest neighborhoods in NY, but it took a long time to get there.
I wish he would have thrown in the towel before he dug out that huge hole. Now it can’t even be used as a friggin’ parking lot anymore.
Ah, just get a somebody with deep pockets on the phone. Eli Broad? Ron Burkle? Time to get cracking. Haven’t you guys wanted to build some kind of wacky themed apartment complex?
I’m with Brady on this. It is armtwisting going on here.
Don’t developers have to take out completion bonds on projects this big? That is why he is saying it is delayed, not cancelled.
I think we will see this going again before the end of the year.
I just read the following at lacowboy.blogspot.com. That page belongs to Brady Westwater, who I understand has various connections, and also is a somewhat important activist, in the downtown community. So maybe there’s something to the “word” he’s come across?
How about someone at angelenic.com checking it out.
Medallion Project Back On Track?
That’s the word on the street today. The mixed use project at 4th and Main that was postponed for one year according to an announcement last week - is now supposedly going to resume construction after progress was made on construction costs and retail leasing.
# posted by Brady Westwater @ 8:36 PM 0 comments links to this post
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