On June 29, the Arizona Republic asked, "What’s up with the Elevation Chandler project?"

In a city bustling with construction, there is one site notable for its silence: Elevation Chandler, just south of Chandler Fashion Center. No construction workers, no trucks, no buzz of saws or slam of air hammers are in evidence. Just a chain-link fence and a high-rise concrete shell. (all emphasis mine)

In spite of the absence of equipment or workers, developer Jeff Cline in an interview with the Republic,  assured readers and the city that all is well on his project. But as reported by Luci Scott in "The Chandler Republic," Cline has not filed necessary paperwork with the state Department of Real Estate for the condominiums.

Moving forward to July 6, the Republic, in an editorial by Andrew J. Schwartzberg, updates the story- and the plot thickens:  Sure, construction on the city’s biggest ever hotel/condo project suddenly ceased without explanation two months ago. Sure, five different subcontractors have filed millions of dollars in liens against the property because they haven’t been properly paid. Sure, thousands of people exiting Chandler Fashion Center from the south are now greeted by a gigantic, concrete eyesore that has become the most convenient source of shade for scorpions and geckos in the Southwest.


On July 22 the AZ Republic again reported on the troubled, and still silent Chandler Elevation project, this time noting that the state Department of Real Estate was investigating the project.  They were trying to determine is state statutes were violated, as apparently the project had begun marketing condominiums before being granted a report. Cline told the Republic that he was unaware of the violation.

The Republic continues-

On Friday, Cline asked the city for an extension to pay for city permits that expire Monday. The permits, which would have cost $691,970, would allow electrical, heating and air-conditioning work to proceed. They were issued six months ago.
 
Cline has previously said he would pick up the permits that expire Monday. Even though he asked for the extension, he said Friday there are no financing problems with the project.

As of today, work still has not resumed and East Valley residents are left wondering why the workers are still absent.

There’s another condominium project that has ground to a halt- this one in the city of Las Vegas Nevada.  This is the Spanish View Towers project.  While generally we don’t see Chandler and Las Vegas written in the same sentence, there may be something to be learned from a comparison of these two projects.

The headline of an article in today’s Las Vegas Review-Journal stated Owners Frustrated as Work Halted on High-Rise Condos.  Some owners at Spanish View Towers high-rise condominium in southwest Las Vegas Valley are getting antsy as construction of the $800 million project has been halted for the past three weeks.

In a press release dated 12/5/04 developer Rodney C. Yanke stated he expects to break ground for the first tower in the first quarter 2005 with completion in late Spring 2006.  He said the entire project is expected to be completed by Spring 2007.

However, according to a press release dated 4/04/06, Future residents at Spanish View Towers will move into a tantalizingly luxurious lifestyle when the first tower opens in Spring 2007.

Like the Chandler Elevation project, the project seems plagued by financing woes.  According to the Review-Journal, David Berg, broker for Prudential Americana Group, said on July 14 that new financing would be in place within a week and liens placed against the property by subcontractors who hadn’t been paid would be released at that time. Ledcor Construction is general contractor for the job.

Developer Rod Yanke of Tower Homes is scrambling to get financing for the project. He paid $8.5 million for the 15-acre site near the Las Vegas Beltway and Buffalo Drive. He said the project was being financed by hedge funds from New York investors. A spokesman for the developer said Friday they’re about to close on a $320 million construction loan, though he would not divulge the name of the lending company.

David Pourbaba, the developer of Sky Las Vegas on the Strip, offers the Review-Journal a possible explanation:  "One thing about people that start construction, and this is the old (sic)trick in the book, some of these guys start construction with their own money, but they don’t do much. They just start some work toward this and that so they can get more buyers in because most of the banks ask for a particular percentage of presold units before they release funds," Pourbaba said. "If you need 60 percent and you’re only at 48 percent, you take the chance of starting and hoping you get the other 12 percent right away. It happens sometimes and it can backfire as it has in other cases where lawsuits are filed, mechanics liens and this and that."

Another possible explanation was given to the Review-Journal by Mandy Shavinsky, an attorney with Snell and Wilmer in Las Vegas.

"I think what we’re seeing now is a shakeout between experienced developers that have built relationships over the years and less experienced developers," she said. "It sounds like they got short-term funding done at a certain time and those loans come due in a relatively short time frame."

The explanation coming out of Las Vegas is a more convincing one that Cline’s assurances that all is well and financing is in place.  Maybe Chandler and Las Vegas have more in common than we thought.