Bankers donâ€˜t foresee more construction shutdowns
Daily Courier Staff
One of the larger condo projects in Kelowna was shut down Wednesday, but local bankers arenâ€˜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 couldnâ€˜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.
â€œItâ€˜s not as busy and robust as it was, but we havenâ€˜t made any major changes in our (credit) policies,â€ said Peressini. â€œWeâ€˜re still seeing some quality applications. We still have quality projects on the go.â€
Peressini said the credit problem is primarily in the U.S., but â€œpeopleâ€˜s mindsets are that if they feel itâ€˜s affecting them, theyâ€˜ll be cautious.â€
David Trask, regional manager of commercial banking for Valley First Credit Union, said the Lucaya downfall might be unique to that development.
â€œMy understanding from what Iâ€˜ve heard is that Lucaya didnâ€˜t meet the criteria that was set by their lender going in,â€ said Trask.
Most of the major projects in Kelowna have been financed by companies in Vancouver or Calgary.
â€œFrom a local standpoint, we tend to focus on the smaller projects,â€ said Trask.
â€œThere 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 itâ€˜s time to hold off and see what the market is going to do over the next six months or so.
â€œThereâ€˜s definitely reason for caution, but most of whatâ€˜s underway seems to be pretty well committed. I donâ€˜t suspect there are going to be too many surprises.â€
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.