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Construction on The Vue, a 51-story uptown condo tower that kept on building as others stalled, will be stopped because the developer hasn't paid its bills, according to an email sent Monday by the project's general contractor.
It's the latest sign of trouble in the center city condo market, where sales have plunged in recent years. The delay also illustrates the real estate market's lingering weakness as lenders scrutinize projects more closely than in the past.
The email to subcontractors, signed by contractor R.J. Griffin & Co.'s senior project manager and obtained by the Observer, said Griffin had not been paid for work done in July and, while it has been working with the owner and lenders to resolve the matter, “to date we have been unable to reach a resolution.”
As a result, the contractor directed subcontractors to stop all work on the $275-million-plus project effective 12:01 a.m. Tuesday, according to the email. Calls to R.J. Griffin's Charlotte office were not returned. The Vue's owner, Chicago-based MCL Cos., declined to talk with the Observer.
At the worksite, at Fifth and Pine streets, workers streamed out of the tower at the shift's end Monday, carrying an assortment of items, such as ladders, buckets and drills, which workers often leave overnight. Workers with four subcontractors, along with half a dozen Griffin employees, said they had been told that work may stop because of unpaid bills. Employees also removed R.J. Griffin signs from fences and used cranes to hoist portable toilets and other heavy equipment to the ground from The Vue's upper floors.
Michael Smith, president of Charlotte Center City Partners, said MCL's president and CEO, Dan McLean, told him the project is not shutting down and that it is “working through issues with lenders right now.” Smith said he spoke to McLean Monday afternoon, after the Observer called to ask about The Vue.
The condo tower is an important project for Charlotte, Smith said, adding McLean is an “experienced developer” and “I have confidence he'll be able to work with his partners to bring a great product to our center city.”
Two years ago, uptown Charlotte seemed to burst with high-rise housing. Plans were announced for up to 20 projects.
Today, half a dozen high-rise residential projects have been completed inside the Interstate 277 loop. A 50-story tower planned for the EpiCentre has been halted by legal problems. The hulking, rusting skeleton of The Park, a proposed 21-story luxury condo tower that went into foreclosure before being finished, has become an unwelcome landmark.
As projects faltered, uptown promoters have pointed to work continuing on The Vue's glass façade as proof that the uptown condo market, while weakened, has promising bright spots. Between 55 and 60 percent of the tower's 409 units are under contract, the developer has said. The units are listed for between $319,000 and $2 million-plus. The company still plans to celebrate the building's topping out in September, Smith said.
The developer had said that purchasers were expected to start moving in next summer. The building's amenities include a 3,000 square-foot workout area and a 1,000-bottle wine cellar. An outdoor deck will include a heated pool, tennis court and dog-walking area.
In the Charlotte region, home sales are starting to stabilize, but it's mostly lower-priced houses and condos that are selling. Developers, meanwhile, are struggling to refinance as loans come due. Lenders have become more strict in how much money they will lend.
At The Vue's uptown sales center Monday, sales associate Rob McCrorey said he was told to “stand pat” and that his team was continuing to sell units.
“We're in no worries as of yet,” he said.
One subcontractor told the Observer he was due more than $100,000 for two months of work. He said he went to the site Friday to pick up his paycheck only to be told there wasn't any money. Workers said they did not want their names used because they didn't want to lose future work with the contractor.
Some subcontractors said they haven't noticed problems. Plumbing contractor Mitchell Mechanical, for example, has been paid regularly, company vice president Jeff Jones said. As of late Monday afternoon, he said he was optimistic about the work being finished.
Based in Atlanta, R.J. Griffin has built nearly 26 million square feet of multifamily residential space in the Southeast since 1992, according to the company's Web site. It is also building a $138-million, 50-story tower in Atlanta.
MCL specializes in developing, building and marketing residential and retail centers in urban markets and has projects from New York to Las Vegas.
A work stoppage at The Vue would not be MCL's first project to hit snags. In June, the developer said an Atlanta condo project, the 21-story Skyline at Lindbergh, was being put on hold until financing could be secured. Staff writer Kirsten Valle and staff researcher Maria David contributed.
