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The Ibiza condo project in the Short North has faced numerous delays since its announcement in 2006, and the lack of communication over the course of the past year have left many wondering if that dirt lot at High & Hubbard would ever see progress on construction.
The veil of silence has just been lifted, and condo pre-buyers were informed via email that the project will now be moving forward as an apartment building instead. The developers are saying that there will be minimal design changes to the project, and that buyers would receive refunds on their investment in due time.
The full email can be found below:
As you know, we have spent a year and tens of thousands of dollars to procure financing for the construction of IBIZA. The meltdown of the mortgage market has placed our primary lender in the position of being unable to take on new real estate loans at this time. (We had already begun construction with the assurance that our loan from that lender was in place.) Other lenders have reviewed the project and have even tentatively agreed to proceed, only to find out that they, too, were restrained by their liquidity and other issues unrelated to the economic viability of the project. (One of the reasons the lenders were so interested was that the loan-to-value ratio of the project would be 61%.) On the other hand, a number of lenders have indicated to us that they are ready and willing to proceed promptly with the necessary funding of the project as an apartment project. (Ironically, the rules for individual condominium unit loans have also changed, making it problematic for our buyers to obtain loans which, just a short while ago, were readily available.)
The probable impossibility of proceeding as a condominium is forcing us, reluctantly, to shift our focus to obtain financing for the construction of IBIZA as an apartment project. Millions have been spent through and including the commencement of construction, and only minor changes in layout and design will be required to make the project appropriate for apartments. (We will try to maintain the flexibility of keeping the option open for conversion at a later date when the market and lending rules permit.) We will be working with each buyer to refund their deposit. This will require a period of time to accomplish. We truly regret this complication.
We are diligently working with our lenders, architect, and legal team to accomplish this end. Once the project is funded, we will refund all of your deposits and statutorily required interest.
We are truly sorry for this turn of events, but it has been out of our control.
Thanks for understanding and working with us to make this a successful transition.
Sincerely,
APEX Realty Enterprises, LLC
[quote]We will be working with each buyer to refund their deposit. This will require a period of time to accomplish. We truly regret this complication.[/quote]
How long have they been holding on to other’s money?
I like the concept of apartments for this area better anyway. I like the Short North a lot but there is something to the flexibility of renting in a trendy hotspot with the ability to move on when your needs change. I am glad to see something being built.
“Millions have been spent through and including the commencement of construction…”
does demolition of the AAA renting building count as ‘construction.’ because otherwise, there is just a weed filled whole in the ground.
hope this goes through. Victorian Gate and some other projects show that you can move rental to ownership over time should the market be there to sustain it.
Will there be a shift in ownership or financial responsibility that is tied to the previous concept?
While I understand that the developer would rather just sell, get his money, and get out, I think this will end up being a successful apartment development. It’s going to have top-flight amenities and a fantastic location, and there are actually already a surprising number of condos compared with the number of apartments that are right on High itself. The demographics of the Short North should hopefully be fairly rental-friendly, too.
I think they will have to cut back on some of the amenities. I don’t think the rental market will bear much more then $900 – $1600 for 1 and 2 bedrooms even in the Short North. ARMS will be paying interest on tens of millions of dollars on construction loans.
Actually, unless they make some drastic cutbacks I don’t see it being solvent.
I have no problem with seeing these built as apartments. I think the Short North is lacking in available apartments anyway. I’m glad to finally here something on this. I do wish they would have said when groundbreaking was going to be. It sounds like it would be soon but who knows.
Wonder what their timeline is for building? The sooner the better for that vacant lot and people who had made deposits
“Actually, unless they make some drastic cutbacks I don’t see it being solvent.”
Which amenities do you think they should cut out to make it solvent?
I am not sure but I think an 11 floor, $45 million apartment building is a pretty risky venture in a city that ranks in the top 10 lowest rents. The interest payments would cut heavily into the rent proceeds and there would be no condo fees to subsidize upkeep.
Basically, I think they need to redesign.
Give it up. Ain’t gonna happen. Just another excuse. They’re just stalling again. They spent a lot of other people’s monies and now they’re looking for someone elses’ money So they can pay everybody back.
How is this NOT a panzi scheme? Or, in this case, should we simply call it a pansy scheme?
nm
I always thought this was being developed by ARMS Properties – who is this new Apex player that signed the email?
I am glad this project is moving forward one way or another.
More information at business first
http://columbus.bizjournals.com/columbus/stories/2010/01/25/daily10.html
This is a strange move. I am sure that they are going to be cutting some costs (to make the project solvent.) They may keep the overall design, but I bet that some of the materials used, and wall thickness will be cheaper. On the other hand, if they do cheapen some costs it would make it harder to turn them into quality condos later. I hope they keep that in mind when they look at the redesign.
Last, I’m very surprised that they are not going to keep a portion of the units as condos. However, it is interesting that they claim it is easier to get financing as a 100 percent rental building than relying on available loans for mortgages.
Okay, I know this will bring up a whole lot of attacks, but as a community, we need to think of the following:
1. These are the same guys who told one of our fellow-bloggers that they were “Really close” to making the condo project happen.
2.) Okay, so let’s think about reality. I’m making an assumption that if banks aren’t willing to loan them money on a condo project, we would be fools to believe this farce that all of a sudden banks are willing to loan money on an apartment building.
3.) So let’s say a miracle happens and a bank is dumb enough to loan these guys money, I’m seriously doubting that they will be able to build what is on that rotting buildboard. Which means, and correct me if I’m wrong, but it’ll have to go through a whole redesign and then get approval from whoever approves it for the Short North. I mean, we’ll be looking at a dirt hole for years.
4.) And considering the way they mishandled this whole project, I shudder to think how these guys would manage a rental property of this size. I believe these guys about as far as I could throw them.
Fool me once, shame on you. Fool me twice, shame on me.
What millions of dollars have they spent? Buying the property and knocking down a building isn’t construction.What a mess! Shame on you Ibiza! Shame!!
It’s hard to question how much something has cost if you’ve never taken part in such a thing. I bet for starters you wouldn’t even be close to the demolition cost of the old building alone. Those millions went to purchasing a property, demolishing it, paying an architect, paying the taxes, paying the fees, paying the employees involved, purchasing the demo equipment for the office, fencing, and billboards along with the rest of the marketing. This is a small list of what goes into a project like this. It’s not cheap to get to where they currently are.
They have to be optimistic when talking to the project. Up until the press release today they were most likely trying to get this thing going. There’s no way they wanted to see it fail like they did. I’m sure the works been done. Sometimes it takes one wrong turn to trash a project of this size.
It honestly does not take too long to push something through the neighborhood reviews and get it moving. They have their original plan approved. Now they’ll just alter a few things and go before the board again. It’s a very small step at this point since the dirty work is done on that end.
Again, say what you want about this project but don’t forget the other projects they’ve taken part in within the short north area. Some of their other projects had minor flaws too but they still pulled it off and helped shape the neighborhood.
Will the pool still be on the roof? Because if not, I’m going to make lots of loud angry noises.
At least there’s a time line set.. we’ll see if it actually sticks though..
He said the project should get under construction within 90 days with a completion expected in late 2011 or early 2012.
I’m more interested in seeing what businesses get added to the SN with this project since i’m pretty sure I won’t be able to afford to rent there…………………………
Okay, well they have until April 25th.