by Mark Barrett, courtesy of Asheville Citizen-Times 

The slowdowns in real estate and the economy in general have reduced short-term demand for housing downtown and banks' appetite for lending to create it, people in the field say.

“The economic climate has changed the way developers have to do business,” said local attorney and developer David Payne, part of a group that wants to put several condominium buildings on downtown's south slope. “We basically have to have the fish in the basket (i.e. prospective buyers who have made deposits) before we go to financial institutions. … The days of building and seeing if they will come are over.”

People still want to live downtown, but fewer are ready to buy now, said Jim Privette, developer of a condominium building at 60 N. Market St. that is close to completion.

“There's still plenty of wealth. There's still plenty of people who want to buy, but they're looking for stability” in the economy and real estate prices before pulling the trigger, Privette said.

Banks, he said, appear to be sitting on their hands.

“I would not expect that we're going to see any meaningful development (downtown) next year, principally due to the credit markets,” Privette said.

Several developers, however, say their plans are still moving ahead. An official with a Gainesville, Ga., company that is planning a hotel and parking garage on Biltmore Avenue and another hotel across from the Civic Center said both projects remain viable.

Because contractors are looking for work and should make lower bids, “it's actually the best time to be under construction. We're actually bullish,” said Wes Townson, vice president of acquisitions at McKibbon Hotel Group.

Beginning building in 2009 means a project would come on line when the economy has turned for the better, he said.

“If you can get a project started, I think the timing's great,” Townson said. But, “the real question is financing.”

The number of major development projects submitted to city government has slacked off this fall and winter. But Jessica Bernstein, a city planner who reviews many of the larger projects seeking city approval, said preliminary discussions with developers indicate that there are still proposals in the hopper.

“We expect to see some good projects coming in 2009,” Bernstein said. “The pulse hasn't stopped beating. “It's not that frenzied pace of two years ago, but there are some people who are well into planning projects.”

A further complication for some building proposals is a city rule that says Asheville City Council approval of some projects expires two years later if a developer has not started construction “or otherwise (begun) the permitted use.” The city planning director can extend that time for six months, but after that, a project would have to go through the city approval process again.

It is too soon to say whether a new downtown master plan, scheduled to be adopted next year, will substantially change the rules for approval of downtown development.

Here is a status report on several larger downtown projects:

The Ellington. There has been no advertising for or construction of the luxury, 23-story hotel and condominium project that would be on an L-shaped site adjoining Biltmore Avenue and Aston Street. City Council approved plans in October 2007.

Karen Tessier, the local spokeswoman for the project, says developers “continue to be thoughtful about the economy” but still plan to break ground sometime next year.

“There's no scale-back. Everybody remains terribly excited about it,” she said.

Biltmore Avenue hotel/garage. City government and McKibbon Hotel Group propose partnering on a seven-story hotel with 145 rooms and an adjoining parking garage with more than 430 spaces, more than half of which would be available to the public. The structure would be on what's now a parking lot at the southwestern corner of Biltmore and Aston. McKibbon would own the hotel, the city the garage.

Construction drawings are being worked up, and the partners plan to get construction bids in the summer, said City Engineer Cathy Ball. Council has already approved the building design but would be asked in August whether to go ahead with the project once building and financing costs are known.

Construction could begin a few weeks after that and take 16-18 months, Ball said.

Parkside Condominiums. The state Court of Appeals should decide next year whether to grant developer Stewart Coleman's appeal of a judge's ruling that essentially barred him from putting a condominium building on a site that includes the Hayes & Hopson Building and some parkland near City Hall.

What happens from there is anyone's guess, given the state of the economy and strong opposition to Coleman's plans, but moves by Coleman suggest he is still committed to the project.

Zona Lofts. Excavation for a foundation for the building on Coxe Avenue began this year, but the site has been idle in recent weeks.

Rod Kagy, a manager with developer Alexander Reagan, said initial tests had indicated poor soil in the area, not surprising since much of Coxe sits on fill from an excavation project in the first half of the 20th century that leveled the area where the Grove Arcade and Battery Park Apartments now sit.

But when actual construction got going, workers found the ground more conducive to building than expected, he said. That means developers can save money by changing foundation work, and revised plans are being drawn with construction expected to resume during the first quarter of 2009, Kagy said.

The 15-story building, to contain 161 condominiums, was approved by City Council in August 2007.

Developers also have plans for nearby property, but Kagy said one building there is on hold until Zona Lofts is further along.

Civic Center hotel. McKibbon once had proposed a hotel with a large parking garage and retail space on city-owned property across Haywood Street from the Civic Center. It encountered opposition from people who say the property is better suited for a park.

The company submitted a scaled-back plan to city government a few weeks ago, Townson said. It reduces the number of parking spaces in the garage to only those needed for the hotel itself — the previous proposal called for public spaces also — and cuts the amount of retail space and number of hotel rooms, he said.

McKibbon is waiting for a response from the city, he said.

Ravenscroft project. Asheville City Council in April approved plans for four seven-story buildings and one six-story one around the southern end of Ravenscroft Drive in downtown's south slope area. They would house 150 condominiums and some retail and office space.

Payne, a member of the development group planning the project, said work has taken a back seat so far to developers' renovation of the former Biltmore Garden Apartments. Marketing will begin next year, and its success will help determine the timing of construction, he said.

“We're conscious of the economic realities, but at the same time we're conscious of the fact that people need a place to live and they want to live in Asheville,” Payne said.

Hotel Indigo. Anyone who drives Interstate 240 through downtown regularly can see that construction of the hotel and condominium building on the former Asheville Area Chamber of Commerce property on Haywood Street is continuing apace.

It is supposed to be completed in September, said Dennis Goodwin, principal with the Pennsylvania-based group that is developing the project. The 13-level building, including one level of underground parking, will contain 100 hotel rooms and 12 condominiums.

The condos are priced between about $910,000 and $1.45 million and have yet to sell, Goodwin said.

60 North Market. Developer Privette said construction should be completed toward the end of January. As of a few days ago, sales of 20 of the 66 units had closed and “a bunch” more were planned to close in late December or next month.

Sales slowed down in the fall of 2007, and some buyers have backed out, probably because of economic concerns or drops in their personal wealth, Privette said, but he said sales have still been “steady.”

Privette said he has had some inquiries from people expecting dramatic price reductions but that there has been enough demand that he has been able to actually raise prices as building proceeds.

Haywood Park. Developer Tony Fraga shelved his plans for two tall buildings between Page Avenue and Haywood Street this fall, citing opposition from City Council and the faltering economy. He is now focusing on upgrading the Haywood Park Hotel and leasing empty retail and office space in the complex, spokesman Dave Tomsky said.