Bankers don‘t foresee more construction shutdowns

Bankers don‘t foresee more construction shutdowns
Daily Courier Staff
2008-10-17

One of the larger condo projects in Kelowna was shut down Wednesday, but local bankers aren‘t predicting doom for the construction industry.

Workers at Lucaya, which was to be a 21-storey highrise on Sunset Drive, were told to go home after it was reported that the builder couldn‘t raise money to complete the project.

Canadian ICI Capital was said to have put $17 million into the planned 93-unit building, although no one could be reached from the company for comment Thursday.

Bob Peressini, vice-president of credit for Interior Savings Credit Union, said construction has slowed, but there is still money available to be borrowed.

“It‘s not as busy and robust as it was, but we haven‘t made any major changes in our (credit) policies,” said Peressini. “We‘re still seeing some quality applications. We still have quality projects on the go.”

Peressini said the credit problem is primarily in the U.S., but “people‘s mindsets are that if they feel it‘s affecting them, they‘ll be cautious.”

David Trask, regional manager of commercial banking for Valley First Credit Union, said the Lucaya downfall might be unique to that development.

“My understanding from what I‘ve heard is that Lucaya didn‘t meet the criteria that was set by their lender going in,” said Trask.

Most of the major projects in Kelowna have been financed by companies in Vancouver or Calgary.

“From a local standpoint, we tend to focus on the smaller projects,” said Trask.

“There has been a slowdown in the marketplace in terms of absorption. A lot of our clients are taking a look at the market and saying maybe it‘s time to hold off and see what the market is going to do over the next six months or so.

“There‘s definitely reason for caution, but most of what‘s underway seems to be pretty well committed. I don‘t suspect there are going to be too many surprises.”

The Lucaya sales centre has remained open, although its website has been shut down.

There were no condo starts in Kelowna in August or September.