Filed under: city council, developers, Devimco, economics, griffintown, news, press conference
Devimco’s Projet Griffintown will proceed in a greatly reduced and modified fashion, say spokespeople for the developer and the City of Montreal. According to information released at recent press events, a downsized Projet Griffintown will be built on approximately 30% of the originally planned surface area, starting in 2010, in stages.
The new project will abandon the high-profile shopping centre to focus on canalside residential and office developments, to be built on land already owned by Devimco south of Wellington Street. It’s not entirely clear, but it does appear that Devimco will release its options to purchase / expropriate land north of Wellington, which has land and property owners upset that their ability to sign new leases or develop their own properties was frozen by the city, with little to no compensation.
“The economic situation is difficult, and despite this we’re announcing we’re going ahead with our project,” Devimco spokesman André Bouthillier, said. “There aren’t many other developers announcing good news these days.”
Devimco will invest at least $300 million in the first phase of the project, beginning in 2010, he said. Meanwhile, Mayor Gérald Tremblay’s administration held a hastily organized news conference at city hall to deny the project has sunk.
“There’s no real change,” said city executive committee member Luis Miranda, who is responsible for major development projects. “The Griffintown project for us is not closed. It’s not a file we’re abandoning.”
Meanwhile, Benoit Labonté, opposition city councillor and borough mayor of Ville-Marie, blasted the Tremblay administration for its lack of long-term economic vision, and its willingness to put all its eggs in the baskets of real-estate megaprojects, in a press release:
“Alors que l’horizon économique s’assombrit, l’administration Tremblay demeure encore une fois impuissante à agir avec fermeté et audace, afin de préserver le développement de l’économie montréalaise, comme elle a été impuissante à la faire progresser au cours des sept dernières années”, a exprimé le maire Labonté. “Il est vrai que les conditions économiques actuelles rendent le développement de tels projets plus difficile. Cependant, une administration responsable, possédant un minimum de vision, aurait, depuis des mois, mis en place une stratégie de développement pouvant répondre efficacement à l’adversité et ne se serait pas uniquement fié aux grands projets immobiliers ou commerciaux”, a déclaré le chef de l’Opposition officielle.
More news and links, including some reaction from property owners:
Le Devoir: Un autre clou dans le cerceuil…
Journal de Montreal: Des propriétaires excédés
Journal de Montreal: Le mégaprojet se dégonfle
La Presse: Le projet Griffintown se fera par étapes
Radio-Canada: Griffintown: Comme un peau de chagrin
Interesting WSJ article, from the US bubble meltdown perspective:
The condominium market is about to get worse as many cities brace for a flood of new supply this year — the result of construction started at the height of the housing boom.
More than 4,000 new units will be completed in both Atlanta and Phoenix by the end of the year. Developers in Miami and Fort Lauderdale, Fla., are readying nearly 10,000 total new units in a market already struggling with canyons of unsold condos. San Diego, another hard-hit region, will add 2,500 units, according to estimates provided by Reis Inc., a New York-based real-estate-research firm. […]
Regulators have been sounding the alarm for weeks about the exposure of small and mid-size banks to commercial real estate, which mostly means construction loans to developers of condos and single-family housing.
Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months — between the third and fourth quarters of last year — the delinquency rate rose to 10% from 5.9%, says the Oakland, Calif., research firm.
When the US financial meltdown eventually affects Canada, we may find ourselves in the same situation. Anecdotally, real estate professionals we’ve talked to feel that there is already a glut of unsold condos on the market in Montreal, and that the next wave of demand (generation Y kids buying their first home) isn’t set to come for a few years yet. This gives more credence to Jean-Claude Marsan’s observation that there’s still plenty of room for commercial real estate and new residential construction in downtown proper, so to create a second downtown that may be subject to a financial collapse seems like a riskier proposition.
If the economy tanks and we go into a years-long depression before that, then I think people will be thinking more about staying home with Mom and Dad a while longer. The idea of converting McMansions into proper extended-family dwellings, or changing zoning laws to permit outbuildings, granny flats, etc. will probably come back into vogue.
by A.J. Kandy
Henry Aubin, writing in The Gazette, covers an interesting article from the Urban Land Institute. At least one firm echoed the feelings of many when they said that, if given $1 trillion to play with, they’d spend it de-automobilizing North America:
“We would spend less time fixing and more time dismantling America’s infrastructure,” say Dan Wood and Amale Andraos, of WORK Architecture in New York. “The 50-year suburban experiment in car culture is untenable in the face of climate change and peak oil.”
They would spend the money on, among other things, a “study of the suburbs to identify those that can be densified as new cities and those that can be returned to farmland.” They foresee a day when energy costs make long-distance food transport very costly, and more food will have to be locally grown.
That day might come sooner rather than later — most oil geologists believe that the “peak” in peak oil is now; we’re now going down the jagged, uneven slope of depletion. By 2012-2019 (when the Devimco project is due to be finished) spot shortages — or longer outages — in the supply of fossil fuels will start to be commonplace. Consider this graph, “The Growing Gap,” which I adapted from a recent ExxonMobil annual report, comparing diminished future discovery with escalating demand (production). I placed the estimated completion date of Projet Griffintown on the timeline, for comparison.
Seeing as how we’re not going to have the same one-time bonanza of fossil fuel energy going into the 2nd half of the 21st century, it’s a project we should have started on yesterday. (Places like Thornhill, ON will be the first to go — if you’re not already on a farm, that is.)
A simpler thing that almost all cities with dead areas / downtowns can do is change their zoning codes and tax codes. It should be cheaper to build in the middle of cities (encouraging infill and density), and more expensive to build far-flung exurbs which require enormous infrastructure outlays for very little density in return. Encouraging mixed-use, dense neighborhoods is the smartest thing any city can do right now; emphasis on neighborhood, not “Delta City.”
Forgive my jabs at the Gazette yesterday. I have to remember the sterling work of their investigative and city reporters, like William Marsden (whose Stupid To The Last Drop should be read by every Canadian) and of course Henry Aubin, who’s been watching the Griffintown proposal with a skeptical eye.
In this Gazette column, Aubin examines how two projects will inevitably encourage and increase car use (and thus, greenhouse gas emissions) in the city — the Notre-Dame East lane expansion, and the Village Griffintown’s big-box stores, which will depend on car traffic.