Bond Center project in Alberta's oilsands capital suffers setbacks but developer presses on.
Recession or not, the developer of a $174-million project that will dramatically alter Fort McMurray's skyline will go ahead with construction.
But when the shovel goes in the ground is still unknown.
It's been about four years since reports of a towering addition to the downtown-the Bond Center-began circulating. Maurice Yusep, senior VP of real estate development and acquisitions for Bond Street Properties Inc., confirmed that the project remains in the works. The project has been plagued with challenges, first as a result of the boom and now because of the credit crunch.
The first two phases of the Bond Center will provide 274 high-end residential units and 13,000 sq. ft of commercial space. The tallest tower-31 storeys-will be built first. A second is planned (26 storeys), depending on sales. Ultimately, the Bond Center may be a four-tower development.
Today, the tallest building downtown is the twin tower (one nine storeys, the other seven) Jubilee Centre on Franklin Avenue. Regional Municipality of Wood Buffalo Mayor Melissa Blake believes the Bond Center is inspirational because Fort McMurray lacks space for development.
The Bond Center will be built at MacDonald Avenue and Morrison Street.
In March 2008, Bond Street Properties applied to the Regional Municipality of Wood Buffalo for a re-issuance of its development permit. At the time it cited an inability to secure a contractor in uber-busy Alberta to get the project off the ground as the reason for delayed construction. The permit was granted and the developer began working with a Quebec-based contractor in a two-phase construction management contract. That contractor has been working on construction drawings with architect Kim Ziola of Edmonton.
Whether Bond Street Properties continues with the Quebec contractor for the entire contract remains uncertain. "That's our option, and we'd certainly prefer to work with an Alberta-based contractor," said Yusep, adding that the economic slowdown may finally make that possible.
But contractors need to see that financing is in place before they commit and tight credit markets have been a problem.
"Everybody has sort of shut down and that's the difficulty we're facing," Yusep said. Bond Street Properties is working with New York investment banks and hopes to complete a financing package soon so construction can begin this summer.
As the recession takes hold, many residential projects in other cities are being put on hold. Some are being cancelled altogether. But in Fort McMurray, where the average price of a singlefamily home was still a sky-high $656,000 at the end of 2008, there continues to be an urgent need for buildings like the Bond Center towers.
"The market hasn't dropped that much," said Colin Hartigan, president of the Fort McMurray Real Estate Board. "With the average price at $656,000 the question is: Is [housing] still affordable?"
While lower oil prices have had an effect on oilsands projects in the area, developers such as Yusep are trying to look beyond the short term.
"We're taking a long-term approach to Fort McMurray," he said. "I realize oil has had this wild swing. But the point is that oil will be the single driving force in the world."