It’s business as usual at the Spire condominium project, despite the closure of the project’s Chicago-based lender.
The project was scheduled for just one more drawdown of funding from Corus Bank before federal regulators shut the bank down Friday, said Randy Nichols, president of the development firm Nichols Partnership.
The bank’s failure doesn’t come close to wreaking the havoc that former lender Hypo Real Estate Capital Corp. did when it pulled out of the project two years ago, forcing Nichols to halt construction for four months.
Corus entered the picture Jan. 23, 2008, with a $118 million financing deal, allowing construction to restart on the 41-story tower at 14th and Champa streets. Nichols said the bank’s failure shouldn’t be an issue.
“We don’t anticipate there being any disruption,” Nichols said. “If this had happened nine months ago, it would have been a bit of an issue. The size of the draws are so small now, it’s not anywhere near the issue it might have been if we still had $40 million of outstanding money to be drawn on the project.”
Despite the hiccups, Spire is on track to open in November. It has contracts on 90 of its 496 units.
There has been widespread speculation that the building would be converted into apartments if enough units weren’t sold by a certain date, but Nichols said that’s unlikely.
“It looks like we’re probably fine with the way we’re going because no one in their right mind would demand we go apartment if we’ve got $50 million in condo sales,” he said. “Those close and pay you back in the next 60 days.”
On the other hand, an apartment project would have to be rented, then the building would have to be sold before a lender could be repaid.
“If I were a betting man, I’d say it’s going to be condos because condos make more sense in terms of payback,” Nichols said.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
