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Construction suspended, halted on downtown condominium projects

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Recently there have been speculations within the local building industry that increasing construction costs and declining sales activity may cause some of the numerous developments in downtown San Diego and immediate surrounding areas to be halted. Now, nearly half way through 2006, at least three developments have halted construction.

At the proposed site for Atmosphere, a project that was to be developed by JS Properties at 1446 Fifth Ave., construction began in March 2005 and was to be completed in fall 2006. However, construction equipment has been removed from the site and all that remains is a huge hole.

According to David Hawkins of H2A Architects (Hawkins & Hawkins Architects), who helped design the development, one reason the project has been halted is that JS Properties is no longer a company.

"There are always projects for whatever reason that get held up," Hawkins said, adding construction on a recent development the company was involved with was held up by airport and port authorities.

According to Hawkins, a new developer has picked up the Atmosphere property and construction is anticipated to resume on the proposed 73-unit condominium project with 3,000 square feet of retail space.

Other reasons given for why construction on the development stopped are financial issues and the processing of permits.

Hawkins said although the majority of the permits were done before construction halted, the investors decided to add one more level of subterranean parking. The permits for the extra parking level are still being processed.

A project where construction has not begun is Intracorp's condo development Triangle across the street from the trolley station at 12th and Imperial. Besides construction not starting, Intracorp has taken its sign down and has replaced it with a Grubb & Ellis|BRE Commercial for sale sign.

"We progressed to the point where we were prepared to pull the building permits. We got to the point when we had to make a decision from a business standpoint," said Tim Baker, assistant project manager, adding the company sees the current downtown market as a situation where they could sell the property and make a larger profit compared to building and selling the development's units in a year.

"The market has softened, but it was more of business plan decision ... the property has a lot of potential," Baker commented.

Initially, Intracorp meant for Triangle to be a mixed-use development consisting of two buildings containing 57 condominiums, 4,000 square feet of retail, and 84 parking spaces on the triangular-shaped block. The project was expected to begin in early 2006 with a summer 2007 completion date.

"We're still not opposed to building it out," Baker said, adding the company is assessing the possible demand for this property type from other builders and developers. Intracorp has already been in discussions with several organizations that are eyeing the property as a site for possible affordable units.

While the company has stopped building on this development they also expect to break ground at 10th and Market later this year on 23-story Strata, a 236-unit condominium project with 12,100 square feet of retail space.

Another situation similar to Atmosphere is located at 526 Grape St. in Bankers Hill across Sixth Avenue from Balboa Park.

In November 2005 the property, which at the time was a 15-unit apartment complex, was purchased by Olson Urban Housing Inc. On March 2, 2006, the San Diego Planning Commission approved 4-0 a map and site development permit to demolish the units and construct 22 condominium units on the .57-acre site.

The 15 apartments were demolished, but no further activity has taken place. Currently on the property are several holes in the ground and a chain link fence surrounding the property, no indication as to what will be built is posted.

Calls to Tony Pauker, San Diego regional president of Olson, and Scott Homan, chief financial officer, were not returned.

Send your comments, thoughts or suggestions to erik.pisor@sddt.com

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