ST. PETERSBURG Moss Construction has finished work on ICON Central, a 15-story luxury apartment building at 855 Central Ave. in downtown St. Petersburg.

Developed by Miami-based The Related Group, construction of the 368-unit project included the total renovation of the 1926 Union Trust Bank building. The buildings residential units range in size from 542 to 1,470 square feet.

According to a press release, the developer and builder also added 15,000 square feet of street-level retail space to the landmark buildings footprint, bringing its total retail capacity to 19,000 square feet.

We took a previously underserved site that housed the stunning and historic Union Trust Bank building and transformed it into the catalyst for the neighborhoods transformation into a vibrant and walkable community, states Jessica Melendez, vice president of development for The Related Group, in the release. Not only are we seeing impressive leasing activity, but there is also significant interest in the retail space that we look forward to debuting soon.

To maintain the building's historical look and feel, the release states, the project design called for a contemporary federal architecture style that wraps around the structure.

This project was not only about creating and delivering the luxury experience that the ICON brand is known for, but also preserving and incorporating St. Petersburgs historical architecture, Moss Senior Vice President John Bowden states in the release. We are proud to have been able to bring Mosss years of industry experience to ICON Central, and we could not have done it without our great team, our subcontractors and suppliers.

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Builder completes work on 15-story luxury apartment building - Business Observer

The warning from the New York City building inspector was blunt. The facade of the apartment building in the Bronx was crumbling and a corner was separating. The playground outside a day care center in the building had to close immediately.

That was in 2001. Nineteen years later there is still a three-foot gap in the brick facade and the playground, for the centers 50 children between 2 and 4 years old, is still off limits.

The buildings owner has ignored at least 19 violations, failed to pay $49,000 in fines and has not shown up for seven hearings on the dangerous conditions.

Yet the city has been unable to force the owner to make any repairs.

Instead, a 150-foot stretch of scaffolding that envelops the front of the building was put up in 2011 to protect pedestrians and remains there today.

Across the city, about 1,400 buildings are wrapped in wood-and-steel sidewalk sheds not for construction, but because their facades are a serious safety threat. The sites have major structural problems, including corroded masonry and fractured terra cotta, which could come loose and hurt or kill people on the ground.

[The addresses of the 1,400 buildings are at the end of this article.]

Many line the citys most heavily trafficked sidewalks, from luxury condo towers near Central Park to office buildings in Midtown Manhattan.

Others are miles from Manhattan, tucked on impoverished and overlooked streets.

Nobody pays attention. Nobody does anything about it, said Alexander Perez, who lives next to the Bronx day care and whose two daughters attended the center, a half-mile from Yankee Stadium.

Scaffolding in New York often stays up for years without any repairs being done.

Despite rigorous city building laws and a string of high-profile accidents, including the death of a woman killed by falling terra cotta in December, an examination by The New York Times found that building owners routinely flout rules and enforcement actions with no repercussions.

Over the past decade, landlords have ignored more than $31 million in fines over unsafe facades, according to an analysis by The Times. Repairs at buildings have been slow-walked or not started at all. During that period, more than 6,000 buildings higher than six floors did not inspect their facades or failed to file their findings, as required by law.

One building, the Esplanade Manhattan, reported to the city in 2011 that its facade was safe, even though the site was never inspected. Four years later a 2-year-old girl was killed by falling terra cotta from the building.

Critics call the fines too small and say the city does not aggressively deploy the tools it has to impose financial consequences, such as threatening a landlords credit.

The citys building inspectors charged with enforcing the rules can impose fines of $1,000 a year for missing facade inspections and $1,000 for each month that an unsafe building goes unrepaired.

The most powerful tools in their arsenal, such as emergency orders to vacate, are applied only in extreme cases.

City officials acknowledged the shortcomings but said they were moving rapidly to beef up the fines, punish negligent landlords, including charging them criminally in court and adding more facade inspectors.

Were taking aggressive action, Melanie E. La Rocca, the buildings commissioner, said, so that these owners make the needed repairs to their buildings, so that these sheds can be taken down.

Some building owners have not even taken the basic step of putting up sidewalk sheds or netting, leading to deadly consequences.

In April, city inspectors told the owner of 729 Seventh Avenue, a 17-story building just north of Times Square, that terra cotta pieces were missing from its facade and ordered the owner, Himmel + Meringoff Properties, to pay a $1,250 fine and put up a sidewalk shed.

It didnt and eight months later, Erica L. Tishman, 60, an architect, was killed when she was hit by a falling piece.

A sidewalk shed was installed hours after Ms. Tishman died, and the company plans to remove all of the decorative terra cotta. A spokesman for Himmel + Meringoff said repairs were not made earlier because the severity of the April violation had been downgraded by a judge who determined that the facade was not unsafe.

The vast number of faulty facades reflects, in part, the citys successful effort to systematically assess the condition of building facades prompted by the death of a Barnard student in the early 1980s from falling concrete. Eleven other cities, including Chicago and San Francisco, have adopted similar facade rules.

But the proliferation of sidewalk sheds illustrates the weakness in enforcement.

[You can find more information about violations in New York City by searching this Department of Buildings website.]

In New York, sheds around unsafe buildings stretch for a total of 81 miles eyesores that obscure first-floor businesses, collect trash and, according to Mayor Bill de Blasio, are great for criminals as a place to hide.

Even one of the most notorious buildings, a 12-story apartment tower at 601 West 115th Street owned by Columbia University, still has had problems.

In 1979, Grace Gold, a freshman at Barnard, was killed by a falling 1-by-2-foot piece of concrete from that building. Nearly four decades later, an inspection in 2017 found that there were still cracking and crumbling bricks. A sidewalk shed was installed and the university paid $4,150 in fines.

There is no sense of urgency, and the fines are a joke, said Ms. Golds sister, Lori Gold, who has advocated for safer buildings since her sisters death.

A spokeswoman for Columbia University said the facade was fixed in November and that the university would ask the city to sign off on the repairs so the sidewalk shed could be taken down.

In addition to lax enforcement, inspectors have been accused of not acting swiftly enough to inspect facades when there are clear warnings. A city investigation after the death of Greta Greene, the 2-year-old killed outside the Esplanade Manhattan, faulted the Buildings Department for not acting on a tip eight months earlier that the facade had a scary crack that warranted getting someone over pretty quick on this.

In recent months, however, the Buildings Department has stepped up its targeting of negligent building owners.

In October, the department filed misdemeanor charges of noncompliance in Criminal Court in Manhattan against the owners of the seven buildings with sidewalk sheds older than a decade, which includes those used for construction and to shield against unsafe facades. A guilty verdict could bring a one-year jail sentence and fines up to $25,000.

Sidewalk sheds are a critical tool for protecting the public against the dangers of falling debris, said Ms. La Rocca, who was appointed commissioner last May. They can also be a nuisance when building owners let repair work languish, keeping their sheds up far longer than necessary.

The department has also brought charges against individual tenants, including the board president at 409 Edgecombe in Upper Manhattan, a 13-story apartment building, whose shed has been up for 14 years, longer than any other in the city.

Days later, building officials told the city that the facade would be fixed.

Now the department plans to press criminal charges against owners of all buildings with sheds older than three years, a list that includes about 570 properties, according to two people familiar with the agencys actions. The agency is doubling the size of its facade inspection team to 22 members and will soon enact significantly higher fines for facade conditions.

In the days after Ms. Tishman was killed, the department also conducted surprise inspections of roughly 1,330 buildings previously deemed unsafe and found that 220 of them had no pedestrian protections.

The building commissioner is not messing around, said Ben Kallos, a Councilman who has urged the department to do far more to take on negligent building owners. Regardless of who owns the building, they have to keep it safe and the city should be helping out.

Yet sidewalk sheds remain a common sight across the city.

In the Bronx, parents of children at the Mid-Bronx CCRP Early Childhood Center, the first-floor day care in the building where scaffolding has been up for over eight years, said they had not been told the facade was unsafe and believed that the shed was there for construction.

In fact, more than 18 years after a building inspector first noted the walls separating at the corner of the buildings exterior, another inspector, in Nov. 2019, cited the same problem during a review. SUBSTANTIAL VERTICAL CRACKS, the inspector wrote in a citation carrying a $6,250 fine, which has not yet been paid. A partial vacate order, prohibiting access to the playground, was taped to the day care door.

Olga Toledo, who had worked at the day care for 17 years, including as the director, said she quit in 2014 in part because of the landlords refusal to fix the property.

You could see the stuff coming off and falling on the ground, Ms. Toledo said.

Walter Puryear, an administrator at Mid-Bronx Senior Citizens Council, a nonprofit that owns and operates the building, blamed the city for the faulty facade.

The building, he said, was not in a very good condition when the city gave the property to Mid-Bronx in 1993 as part of former Mayor Edward I. Kochs affordable-housing plan to convert city property into residential units.

The nonprofit has wanted to fix the facade, Mr. Puryear said, but could not afford it without financial aid from the city.

They are taking us to court like we are landlords who dont want to do repairs, Mr. Puryear said. The city is aware of that but instead of taking a more proactive initiative of how we can work together, the city instead fines us continually.

An official at the citys Housing and Preservation Department said it had no records showing that Mid-Bronx had sought help.

Two days after The Times started inquiring about the buildings facade, Mid-Bronx hired a contractor to start repairs, at an estimated cost of $659,000.

The nonprofit, Mr. Puryear said, was taking out a loan to help pay for it.

Susan C. Beachy contributed research.

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Facades on 1,400 Buildings in New York Are a Threat to Pedestrians - The New York Times

Theres a whole lot more housing heading for the booming Western Avenue corridor of Allston, this time on the site of the Boston Skating Club.

The Davis Cos. on Friday filed initial plans with the city for a 535-unit apartment building on the site of the Skating Club, along with a hotel and condominium project on the site of a hotel Davis owns next door. It would be the latest, and at 22 stories by far the largest, new building on a stretch of Western Ave. that has exploded with new development in recent years, where apartment and increasingly lab buildings are replacing old gas stations and auto shops from Barrys Corner near Harvard Stadium to the Arsenal Street bridge to Watertown.

Theres a lot of really exciting developments going on to the east, and to the south of here, said Stephen Davis, managing director of The Davis Cos. We thought this was the best time to move forward.

Davis Cos., which built and recently opened the Telford 180 condo building next door, bought the Skating Club site in 2018 for $26.25 million. Eighteen months prior, it had paid $14.2 million for the old Days Hotel next door. The two properties combined give it more than three acres to work with on a site along Soldiers Field Road overlooking the Charles River.

After the Skating Club moves to its new complex in Norwood which is expected to be finished this summer Davis wants to build a 535-unit apartment building, with a 220-space underground garage, on the site. In the projects second phase, Davis would knock down the Days Hotel which it revamped last year as the bright and arts-themed Studio Allston and replace it with a new building with 255-room hotel and 120 condos. In between the buildings would be a large strip of open space that Davis said is designed to improve connections between Western Avenue and the Telford Street overpass to Herter Park and the riverfront.

The way were laying out the buildings has a very specific pedestrian connection to the bridge, Davis said. Youll be able to access the river, as a pedestrian, in a better way.

The filing on Friday was was the first step in what will likely be months of review, and Stephen Davis said he wasnt yet sure when they might start construction. More detailed plans will be filed in the coming weeks, followed by community meetings. Its a part of town thats undergoing massive change, and some residents worry about the impact of new commercial development on rents for existing older housing, and on traffic and bus service along ever-busier Western Avenue.

Last fall, the Boston Planning & Development Agency kicked off a planning study that could ultimately rezone much of the corridor.

Davis said his company has been participating in those conversations and decided to push ahead now before the rezoning is complete in part to meet the plans likely objectives, such as more open space and housing. And while the building will reach 22 stories along Soldiers Field Road, Davis said he envisions it being about the same height as other, shorter, buildings in the works along Western Avenue. Regardless, when its done, he expects there will be a lot of interest in living there.

Increasingly, this is a neighborhood that appeals not only to the traditional Allston-Brighton renter base but to young families and people who want easy commuting access to the city of Boston, he said. We want to create a meaningful option for them."

Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan.

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Developer wants to build 535 apartments on the Boston Skating Club site in Allston - The Boston Globe

The first pieces of the new residential project and urban grocery on Ellicott Street are starting to take shape as Ciminelli Real Estate Corp. moves forward with environmental cleanup of the site and the structural work.

The Buffalo-based developer said Tuesday that all of the urban fill soil has been removed from the site at 201 Ellicott St. as part of a state-supervised remediation. That effort will eventually see the 2.5-acre site bounded by Ellicott, Clinton, Oak and Eagle streets readied for construction into a 220,000-square-foot development after decades as a city-owned parking lot.

Crews have also started work on the primary residential building, with the foundation frame, stair towers and elevator shafts. That building, which will contain 201 affordable apartments, will take longer to build than the single-story Braymiller Market grocery alongside it, on which construction will begin in early spring.

Plans call for the market to be completed in spring 2021, followed by the apartment building in early summer 2021.

Ciminelli is working with CannonDesign, Arc Building Partners and C&S Companies on the project. Other partners include M&T Bank, Evans Bank, Citigroup, Red Stone Equity Partners, Belmont Housing Resources for Western New York and GOBike Buffalo.

Despite parking concerns, 201 Ellicott project gains latest approval

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Foundation of downtown grocery, apartments taking shape - Buffalo News

Carlsbad approved an additional $4 million this week to build 50 affordable apartments in the downtown Barrio neighborhood for homeless and low-income veterans, their families and homeless people with mental illness.

This is affordable housing done right, said John Nguyen-Cleary, a member of Carlsbads Housing Commission, to the Carlsbad City Council before its unanimous approval of the project Tuesday. It will lift people out of poverty and reduce recidivism.

The City Council approved $4.25 million in 2017 as a 55-year loan to buy property for the development at two separate sites, one on Harding Street and the other on Oak Avenue, both just west of Interstate 5. The developer, Affirmed Housing, has been working on construction financing since then, and has also secured a $10 million, zero-interest loan through San Diego Countys No Place Like Home program.

California voters in November 2018 approved funding for the No Place Like Home program, which helps develop permanent supportive housing for people who need mental health services and are homeless or at risk of becoming homeless.

Some downtown residents have expressed concerns that the apartments will house people with severe mental illness.

Im not objecting to the project ... but I have questions about the severe mental illness, said one long-time Barrio homeowner.

If this were my neighborhood, I would share the same concerns, said Councilman Keith Blackburn. However, Affirmed officials assured the council and residents that there are programs in place to help the mentally ill.

Each of the two apartment buildings will have a live-in manager, with supportive services for occupants and oversight from multiple agencies. Applicants are assessed before they move in to determine whether they can live independently.

Its a housing team, said Heather Pollock, director of housing services for Affirmed. It will be a very robust group working together to ensure the stability of those residents.

Representatives of the agencies involved will work with the apartment residents and managers to monitor the needs of individual residents, including those with mental health issues. Residents with a bipolar disorder or schizophrenia, for example, could be treated with prescription medicines.

Construction could begin by the end of the year, said Jimmy Silverwood, executive vice president of Affirmed, the company that will develop, own and operate the housing.

In all, the development has an estimated total cost of $33 million, said David de Cordova, the citys principal planner, at the council meeting. That includes about $8.2 million to cover things such as the design and architecture of the buildings, and $5.7 million for capitalized reserves to help with the subsidized rents.

The cost of the project averages out to $663,000 per unit, de Cordova said, and the amount is reasonable compared to other developments in the area.

The public benefits include ... providing urgently needed housing to the most vulnerable, hard-to-house populations, de Cordova said. The project also helps Carlsbad meet its housing goals for extremely low and very low income households.

More than half the apartments would be studios, and the rest would have one, two or three bedrooms. Rents would range from $280 a month for a studio to $1,600 a month for three bedrooms.

Founded in 1992, Affirmed has built low-income housing projects in 45 communities across California, including the four-building, 56-apartment Cassia Heights completed in 2007 on Cassia Road just east of El Camino Real in Carlsbad.

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Carlsbad to build 50 apartments for homeless and low-income vets - The San Diego Union-Tribune

CLEVELAND The 18-month public battle to build a 44-unit apartment complex in Cleveland's historic Little Italy neighborhood will reach a crescendo during the upcoming Cleveland Board of Zoning Appeals meeting on Feb. 3.

The board is expected to vote on two key zoning variances which would allow the project to move forward, but some residents living near the Cornell Road building site maintain the project will be too large a disruption in their classic east side neighborhood.

Mark Singer said the project needs to be scaled back even further, even though developer Michael Panzica reduced the number of units from 60 to just 44 last summer.

The building is a monstrosity, it is almost the size of football field," Singer said. "Its like sticking a cruise ship in Shaker Lakes. There needs to be at this time a moratorium. There are so many rentals in this area and no one has done a study yet on how many are occupied or not occupied."

Other homeowners, like Lucy Anne Columbus, believe the project will detract from the historic significance of the area and set-up some potential safety concerns.

Were concerned about the emergency vehicles which come down Cornell now on a regular basis, what are they going to do now, how are they going to be redirected," Columbus said. It not only detracts from the three homes that surround this 44 suite building that theyre going to put up, but it also impacts the atmosphere on the neighborhood. Just dont ruin the character of it. There are not enough historical spots, so please preserve the ones that are here."

Michael Panzica, President of M. Panzica Development, said he's been extremely receptive to the needs of the neighborhood, scaling back the project and earning Cleveland Landmarks Commission approval in August.

Panzica said his effort to reach out to the Little Italy community has included four public meetings, allowing residents to express their concerns.

I think weve shown a very strong willingness to work with this community, Panzica said. I think weve come a long way in pleasing the majority and we think it will ultimately bring bodies and residents to this neighborhood to support a lot of the restaurants and shops.

Ray Kristosik, Executive Director of Little Italy Redevelopment, said the project is a better fit than it was when it was first proposed more than two years ago.

Cleveland Councilman Blaine Griffin said he's watching the process carefully and is holding on making final judgment, as the zoning board goes over the development proposal.

Still, residents like Chris Rander who are living near the construction site believe the project is clearly a detriment to the quality of life in that neighborhood.

"It's right in the middle, taking up all this space, its going to dwarf anything around it and we think its too much," Rander said. Please do not grant the variances, its too big, it needs to be rethought.

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Cleveland's Little Italy apartment project battle heading to zoning board - News 5 Cleveland

A local developer has broken ground on a retail complex across the street from Ikea, a project that has been in the works for more than two years.

Construction crews started site work recently for The Bend, an eatery-heavy project that would also include a movie theater, after developer J Dapper said he redesigned the underground garage and made other changes to the planned complex in the southwest Las Vegas Valley.

Grading and other site work are scheduled to finish by June 1, he said, though it isnt clear yet when the project will open.

Cost of $65-70M

Dapper, whose project is estimated to cost $65 million to $70 million and will feature 170,000 square feet of retail space, said Thursday he expects to hire a general contractor by the end of February to build The Bend.

Current estimates call for vertical construction to last 12 to 14 months, he added.

Dapper who also reached a deal last year to buy the shuttered Huntridge Theater with the goal of restoring the rundown, 1940s-era venue is building The Bend in a fast-growing part of the valley. Developers have packed the southwest suburbs with housing tracts, apartment complexes and other projects in recent years.

The Bend, on Sunset Road at Durango Drive, just north of Ikea, is slated to include such tenants as Mothership Coffee Roasters, Lotus of Siam, Freeds Dessert Shop and Galaxy Theatres. Plans also call for a five-story office building, which would be built by a separate developer.

Dapper, founder of Las Vegas-based Dapper Companies, unveiled plans for The Bend in late 2017. His company later announced it expected to break ground by the end of 2018.

Plan changes made

The project site, however, appeared quiet until recently. Dapper said a combination of factors accounted for the delay.

The underground parking garage initially was supposed to be much larger than it is now, he said. The redesign took eight to 10 months but probably shaved more than $10 million in costs, according to Dapper.

He also said his group added some square footage to a planned brewery at The Bend, reconfigured some space for the movie theater and changed the projects lead architect, switching from a small firm to a larger one.

As for dealing with Clark County officials, design professionals and others, Dapper said, It just doesnt happen overnight.

Meanwhile, The Bend isnt the only new project in the works across from Ikea.

Clark County commissioners recently approved plans by luxury gym operator Life Time for a three-story, 125,500-square-foot facility just east of the Swedish furniture dealer.

The Minnesota-based fitness chain has said it hopes to break ground this year.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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Work begins on The Bend retail complex in southwest Las Vegas - Las Vegas Review-Journal

Plans in the works for another multi-level building in East Hollywood

A developer wants to add to the growing roster of mid-rise apartment complexes sprouting in East Hollywood.

Kenneth Sauder on behalf of Wakeland Wilcox LLC has filed plans for a four-story, 62-unit building at 4904-4920 W. Santa Monica Boulevard, county records show. The building would have a substantial affordable component.

The entity acquired the property, now a 4,850-square-foot office building and adjacent parking lot, for $6.4 million in September.

The applicant is requesting special zoning considerations under Los Angeles Transit Oriented Communities initiative, which encourages the construction of affordable housing near transit stations.

The $35.4 million development to be called The Wilcox is slated for $13.4 million in No Place Like Home Funds state grant funding, awarded through L.A. County, according to Urbanize.

Some of the other East Hollywood mid-level housing developments in the works:

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Developer looks to add to East Hollywoods growing multifamily stock - The Real Deal

In OctoberDecember 2019, YIT started construction of two new apartment buildings in Russia. The projects are located in Yekaterinburg and Tyumen. The total value of the projects is approximately EUR 22 million, with nearly 500 apartments to be completed. The start-ups of the apartments are booked in the order backlog of the fourth quarter of 2019.

In Yekaterinburg, YIT started the construction of a new apartment building called Vektori. The 25-storey building will feature more than 270 apartments and a parking hall with business premises and a roof-top recreational area for residents. The building is located in central Yekaterinburg, in the vicinity of diverse services and good traffic connections. The building is set to be completed in late 2021.

In Tyumen, YIT started the construction of the second phase of the Finskiy zaliv residential area. The 9-storey building is planned to have more than 200 apartments, mainly with 23 rooms. Some of the apartments are Transformer apartments, in which the residents can easily make changes to the floor plan when their needs change. In addition, the building will feature business premises and teaching facilities for 40 preschool children. The park area located near Finskiy zaliv offers excellent opportunities for various outdoor activities. The second phase is due for completion in the last quarter of 2020.

In addition, YIT acquired a new plot near the city centre of St. Petersburg at the end of 2019, with the intention of constructing an apartment building with approximately 100 apartments. The future project is located near many universities and cultural landmarks, such as the Mariinsky Theatre.

Read more:
YIT starts with two new apartment buildings in Russia - Property Magazine International

An interview with Dru McAuley, Assistant Vice President, Commercial Financing, First National on site intensification.

Across Canada, governments at all levels have jumped on the site intensification solution to housing shortages and for good reason. As the countrys population grows, it is economically and environmentally preferable to increase the housing density of existing neighbourhoods than to allow more urban sprawl.

However, even though intensification is promoted as good public policy (and Ontarios recently enacted Bill 108 further entrenches such promotion in law) it does not mean owners proposing higher density redevelopments will always find clear sailing at city hall. Indeed, many times the opposite is true.

In this article, Dru McAuley, Assistant Vice President, Commercial Financing at First National and a lending expert who has financed many different types of intensification projects over the years, provides a practical guide to those who are contemplating land use densification.

The Dollars and Sense Benefits of Intensification

McAuleys first observation is that intensification has many clear benefits. When asked to list them, he starts with a basic one: higher density projects provide more housing per hectare. In large cities like Toronto and Vancouver where the shortage of housing options is acute, this is a necessity. Additionally, when an underused urban site is redeveloped, it increases public transit use and creates what city planners call a more complete community featuring healthier patterns of human activity.

For municipalities, intensification reduces the need to build new roads and other infrastructure and brings in sought-after development charges/new property taxes from an increase in the assessment base. For these reasons, provincial governments have given municipalities planning act tools to achieve more compact neighbourhoods. In Ontario, the provinces Growth Plan requires all municipalities to accommodate a minimum of 40 percent of forecast population growth through residential intensification within their urban areas.

Beyond the social benefits, McAuley says there is a compelling economic case in favour of intensification for property owners as higher-density additions yield new sources of cash flow from otherwise underutilized or vacant properties.

The Risks

With seemingly easy, abundant opportunities for intensification present in most urban areas, its a wonder why it doesnt happen more often. A key factor is NYMBYism (Not In My Backyard), which is a general opposition to change for a variety of reasons. NIMBY protests are a common risk factor facing intensification projects.

Another challenge is parkland dedications that generally fall under Section 37 of Ontarios Planning Act. It authorizes municipalities to grant increases in height and density of development in exchange for the provision of facilities, services or matters by the property owner, which are essentially classified as community benefits and commonly referred to as parkland dedications. Toronto has used this to wrest over $300 million in community cash benefits and $212 million in payments and accrued interest from developers since the city was amalgamated in 1998. This is complicated by the fact that there is no commonly applied standard to determine the value of a Section 37 contribution. This makes the cost of the contribution difficult to calculate and can lead to lengthy and substantial project delays.

In Ontario, Bill 108 passed in June seeks to remedy this situation by declaring an upper limit on the charge that can be applied in percentage terms, prescribing a date that valuation takes place (the day before the building permit is issued) and installing a dispute resolution mechanism. Time will tell if these changes make a meaningful difference.

Drus Advice

McAuleys first recommendation to property owners is to informally ask the elected municipal representative in whose ward your project will take place if he/she will support the intensification development as envisioned. You might find the local rep will support the plan, something slightly different or indicate which type of Section 37 benefits will be required to garner support. If there is no support, then it is prudent for an investor to be aware of this from the outset. McAuley said that while gaining councillor backing is not an iron-clad guarantee that the project will make it through the approval process, it is a valuable indicator of how much friction it may encounter.

McAuleys second suggestion is to align yourself with experienced planning consultants, lawyers, architects and builders. A team approach is necessary. Navigating the municipal, provincial and conservation authority approval system takes skilled hands. This might seem obvious, but many investors attempt to go through the process with limited input. For example, a very useful exercise is to engage property tax experts early in the process who will liaise with the local tax authority or MPAC in order to have the increase in property taxes largely agreed upon prior to completion. This simple approach helps avoid tax shock when the reassessment occurs. Generally speaking, a non-fully professional team will not succeed in a site intensification project.

Recommendation three is to seek advice from a mortgage partner early, often and well before building project plans are set in stone. McAuley says First National is regularly invited by clients to run predictive analyses of potential financing strategies using different assumptions. Proactive engagements with an empowered lender like First National lead to better financing decisions, lower risks and lower costs. The benefit here is that financing surprises are avoided, or at least minimized. McAuley has often seen well planned projects fail at the final hurdle because the investors financing assumptions cannot be satisfied. When more equity or debt is required than originally envisioned, it naturally affects investment returns and even the viability of the project.

Recommendation four is to have sufficient contingency funds set aside in a financing to cover extra costs that may arise because of planning and building delays and construction inflation. Lately, First National has seen several project budgets that have had to be revised due to quickly escalating labour and material costs. Contingency amounts in budgets should be realistic. An often used 3% for both hard and soft costs would be considered too low in the current market. Instead, 5% is more realistic. A challenging construction market where booking reliable trades and other service providers is difficult complicates matters because of limited resource availability. Accordingly, investors without sufficient capital to meet cost overruns or supply shortages can get into trouble quickly.

While not a recommendation, McAuley also notes it can pay to be creative about how to achieve intensification. One First National client decided to add three storeys to an existing three-storey, 30-unit apartment building. To make the project work, the owner first approached the city for a soft approval and then worked with a builder, engineering consultants and material suppliers to find a way to construct the addition without asking existing tenants to vacate. The solution was the use of pre-fabricated materials, which reduced the construction window substantially and created much less disruption for existing tenants. There was an obvious concern that if something went wrong with the structure of the existing building during construction, the owner would suffer cash-flow shortages on the existing 30 units. This risk was partly mitigated through proper insurance, thorough investigative work, sound engineering advice and forward planning with regard to adding the necessary additional parking.

Recommendation five is to carefully consider parking. In many communities, particularly suburban centres, providing sufficient parking spaces is a pre-requisite for municipal approval of an intensification project. In the case of the project noted above, the owner had to acquire a vacant lot for surface parking across the street from the apartment building at extra cost. However, for some intensification projects, underground parking is the only acceptable solution and building it can substantially inflate construction costs beyond the point of recovery or reduce the level of density that can be achieved if the owner opts to limit parking capacity. The cost of underground parking in urban areas often a necessity adds tremendously to project costs and should be considered very early in the process. This also underscores the requirement of engaging proper consultants early a parking surprise is one to be avoided.

Overall, site intensification can be challenging, but it can also be rewarding. McAuley noted that First National recently closed a financing for a redevelopment project in north Toronto that was originally conceived six years ago. At first, the property owners proposed building a second apartment tower on a contiguous parcel of vacant land that they owned, which seemed obvious. After lengthy negotiations with city officials, the owner was instead permitted to construct a much smaller rental townhouse complex. The final goal was achieved site intensification and new, high-quality accommodation for local residents even though the preliminary plan could not be realized.

First Nationals Lending Parameters

In determining whether to fund an intensification project, First National applies straightforward thinking. The primary consideration is an obvious one: does the project make economic sense? It does when there is no equity gap. An equity gap exists when an owner asks for a loan of, say, $9 million when the cash flow after development will only support a $6 million financing. As noted above, this might seem obvious. But the importance of engaging a lending partner at the earliest stages of the development planning cannot be emphasized enough.

First National also strives to align itself with owners and developers who have a good level of experience and a proven track record. A borrower who has no high-rise experience, for example, will find limited financing available due to the lack of a track record with this type of asset.

The third consideration is deal size and type. First National typically engages in development or construction financings conventional and CMHC insured of $5 million and up but there are exceptions where smaller loans can be accommodated. The Company also focuses on financing site redevelopments, multi-residential building extensions/additions and new developments, rather than housing infills. An infill occurs when an owner redevelops a site by knocking down an existing structure and puts another building(s) or a larger structure in its place) on an under-used site within an already developed area.

In summary, it pays to recognize when you have a good case for intensification, either because you have excess land that was bought and paid for years ago (as in the case of many Toronto-area apartment sites) or because your existing property has low density. Transforming such properties into multi-unit residential developments that generate new cash flows will take skilled negotiation and committed capital, but is beneficial to you as the owner, your local municipality and the many Canadians whose need for housing is currently unmet.

Should you wish to consult First National on financing your residential intensification project, you can contact Dru McAuley atdru.mcauley@firstnational.caor any member of our Commercial Financingteam.

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Have an intensification project on the books? Read this first. - Real Estate News EXchange