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  #81  
Old Posted Aug 5, 2008, 4:00 PM
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Builder puts lien on Waterfront Pearl developer
Hoffman Construction seeks $15.8 million, saying it hasn't been paid in two months
Tuesday, August 05, 2008
JEFF MANNING
The Oregonian Staff

Hoffman Construction has slapped developers of the Waterfront Pearl condominium project with a $15.8 million construction lien.

Bart Eberwein, Hoffman vice president, said Monday that the Portland construction company filed the lien in late July because it has not been paid in more than two months.

The developer of the two buildings on the west bank of the Willamette River near the Broadway Bridge said that the project is on track and that the lien is a momentary glitch.

Paul Mayer, of Vancouver, B.C.-based Pemcorp Development, said the building's rising price tag has forced developers to restructure their loan agreement with their lenders. While negotiations continue, the developers have not taken any draws from their constructions loans, which meant that Hoffman didn't get paid.

Design changes and other factors pushed the building's price tag from slightly more than $80 million to about $91 million, Mayer said.

"This is a nine-figure financing package," he said. "It's not the kind of thing you can amend with a phone call."

Condos have become a tough sell in Portland. Declining demand has forced some condo developers to convert buildings under construction to apartments.

Mayer said sales at Waterfront Pearl are going well, given the slowdown. About half the project's 194 condominiums have been sold. The condos range in price from $449,000 for a 921-square-foot one-bedroom unit to $2.8 million for a 3,300-square-foot, three-bedroom suite.

Hoffman broke ground on the building in October 2005. Sales began in earnest in mid-2006.

Early on, water was a problem at the site. Hoffman crews spent a lot of time pumping Willamette River water off the property, Eberwein said.

The "unexpected site conditions," combined with the building's complex design and changes requested by the developer drove up the price to beyond $90 million, Mayer said.

Hoffman last got paid in the spring. "There were a few late payments, then it went to zero payments," Eberwein said.

Mayer said he expects the problem to be resolved shortly, when the lenders agree to restructure the loan.

Waterfront Pearl's main lender is CPDQ Mortgage, an affiliate of a large Quebec pension fund. A subsidiary of Australia-based MacQuarie Group furnished additional financing.

U.S. banks have written off billions of bad residential development loans and are retreating from the market to limit further losses.

While Portland's real estate market remains one of the strongest in the country, it too has seen declining prices and slack demand. The condo market has been particularly weak.

Mayer said Waterfront Pearl's lenders remain committed to the project.

"Our lenders are extremely sophisticated," Mayer said. "They are international players. They have a broad perspective."

Jeff Manning: 503-294-7606; jmanning@news.oregonian.com.
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  #82  
Old Posted Aug 5, 2008, 4:56 PM
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"Our lenders are extremely sophisticated," Mayer said. "They are international players. They have a broad perspective."

Yes, quite sophisticated, unlike those country bumpkins at Bear Stearns... Any pension fund manager would be seriously remiss if they did not question their committment to real-estate investments at this time.

I like these buildings, but they are quite literally on the wrong side of the tracks, without offering an appropriate price discount.
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  #83  
Old Posted Aug 5, 2008, 5:37 PM
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1/2 sold.... I don't know whether to jeer or cheer.


I expected a lower number in this market, but at the same time, this isn't awful. Bad, but not catastrophic I would say.


I like the looks of the units, but I really don't think the buildings came out as anything but a hodgepodge of similar colors, textures and weird angles and curves.

Not like my opinion matters much, but I agree with above poster as well, these things are in a weird spot to command such a premium price.
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  #84  
Old Posted Aug 6, 2008, 5:17 AM
philopdx philopdx is offline
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Hmm, you know I had a funny feeling about the financial state of things given those extended periods of inactivity when the buildings had their bright teal insulation exposed. Guess my spidey sense was right again...
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  #85  
Old Posted Aug 6, 2008, 7:49 AM
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They did offer to buy me an electric Smart car if I would buy. Maybe they should have paid the construction company instead.
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  #86  
Old Posted Aug 12, 2008, 2:42 AM
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I took a jet boat down the willamette recently. sorry for the size zilf. more here: http://forum.skyscraperpage.com/showthread.php?t=155593


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  #87  
Old Posted Aug 22, 2008, 8:44 PM
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I just rode over the Broadway Bridge and couldn't help but notice that no one is working down there -- and the waterfront is barely half done.

I'm guessing this means that the developers have so far not been able to renegotiate the terms of their loan.

Anyone here with a financial background know what the various scenarios are if they fail to get the loan changed and can't pay Hoffman?
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  #88  
Old Posted Aug 22, 2008, 9:36 PM
PDX City-State PDX City-State is offline
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I don't think it's any cause for concern. They've probably cut back a bit as the funds have gone dry. Once the funding is restructured, I'm sure a full schedule will resume. This type of stuff happens all the time with big projects in changing economies.
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  #89  
Old Posted Aug 27, 2008, 6:43 AM
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Castillonis Castillonis is offline
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360 panorama between Azure and Mistral

There is a 360 panorama taken between the Azure and Mistral

http://portland.360cities.net/fs.htm...ureMistral.p36
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  #90  
Old Posted Aug 28, 2008, 11:15 PM
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thanks Castillonis

curious, what camera/set-up do you use to shoot these 360s?
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  #91  
Old Posted Aug 29, 2008, 4:21 AM
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thanks for the panorama Castillonis!
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  #92  
Old Posted Sep 23, 2008, 3:51 AM
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^any word if construction has resumed? What is it going to be, condo? apartments? Seems like with the Encore and these guys, we've got a bit of a distressed corner.
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  #93  
Old Posted Sep 23, 2008, 4:06 PM
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Originally Posted by MarkDaMan View Post
^any word if construction has resumed? What is it going to be, condo? apartments? Seems like with the Encore and these guys, we've got a bit of a distressed corner.
As far as I know, Waterfront Pearl is still condo. They've sold a hand full of units. 25-50% I think. I have a few friends that live in there and they haven't heard anything about construction last I checked.

Encore on the other hand...... when I went in to inquire about prices (out of curiosity). They handed me a 4-5 page document with every unit listed. Needless to say, they have a lot of openings. Hopefully it will start to sell when the park gets underway.
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  #94  
Old Posted Sep 24, 2008, 2:55 AM
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^thanks for the info...I'd be pissed if I put down money for a unit and wasn't getting weekly updates leading up to the move in date and then daily updates when they were delayed after I was suposed to be in the unit. Maybe the Waterfront Pearl 'owners' could instead snap up some Encore units? Then Waterfront Pearl can go apartment for a few years.
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  #95  
Old Posted Sep 24, 2008, 4:21 AM
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Originally Posted by pdxcrow View Post
"As far as I know, Waterfront Pearl is still condo. They've sold a hand full of units. 25-50% I think. I have a few friends that live..."
... So, there are people who are actually living/occupying units in the Waterfront Pearl? I prefer the WF Pearl compared to the Encore...personal opinion.
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  #96  
Old Posted Oct 13, 2008, 9:10 PM
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Hoffman presses forward on Waterfront Pearl lien

Initial motion asks for $15 million in construction costs from Pemcorp
Development and its lending partners CPDQ Mortgage and MacQuarie Bank

POSTED: 04:00 AM PDT Tuesday, October 14, 2008
BY TYLER GRAF

A lien filed by Hoffman Construction against the developers of the Waterfront Pearl condominiums in July has yet to be settled, resulting in the general contractor filing paperwork to ask for a jury trial to settle the issue.

In July, Hoffman filed an initial lien against project developer Pemcorp Development and its lending partners CDPQ Mortgage Co. and MacQuarie Bank Limited, requesting $15 million in construction costs.

Bart Eberwein, a vice president for Hoffman Construction, said the lien was filed after Pemcorp fell behind in payments to Hoffman for work the company had already done to the project, which Eberwein says has seen significant financial overruns since ground broke.

“We are making our position clear by filing the lien,” Eberwein said.

Paul Mayer, president of Vancouver, B.C.-based Pemcorp, admits his company hasn’t paid Hoffman. But the development company has taken a financial blow, too, as it hasn’t taken a draw from its loans in months, Mayer said.

Cost overruns have dogged the development. The overall cost, for example, climbed from $80 million to $90 million. The increase was caused by a range of factors, from changing materials in mid-stream to what Mayer calls a “high-water event” during excavation, which set the project back.

The delay coupled with the increased costs forced Pemcorp to restructure its loan agreements with its lenders. The process, however, has become increasingly difficult given the current state of the economy, Mayer said.

“(But) There’s no way the lender will let Hoffman gain control of the (building),” Mayer said.

Eberwein fears the tardy payments are a result of the collapse of the international lending industry. Although Mayer agreed, he said the current economic situation for CDPQ Mortgage is less about a loss in capital and more about a loss in focus.

“They can’t just focus on one situation in Oregon,” Mayer said.

CDPQ Mortgage has $160 billion in assets and is the largest pension fund in Canada.

The company’s focus, given the downturn in the economy, has shifted sharply to protecting its pensioners’ money, Mayer said.

CDPQ Mortgage has the money, but the terms of the loan need reworking, he said

The situation would not have been the same six months ago, he added, when the lending industry was not as tightly wound.

But the situation hasn’t changed much in three months, when Mayer promised a speedy reconciliation to the lien. And Hoffman Construction has reason to be concerned about its ability to recoup its losses, Eberwein said.

“It would be hard for me to believe that this is not somehow tied to what’s happening with the lending industry,” he added. “I think we have entered some un-chartered waters.”

On Friday, Mayer had a conference call with the project’s lenders, and he remains optimistic that he can refocus the lenders’ attention on reaching a solution that would pay Hoffman Construction.

However, the lenders may feel compelled to stake their arguments against the lien in court, in which case no end is in sight.

If Hoffman won its case, it would be allowed to take ownership of the building. But this would bring up another major point of contention, Mayer said: the development cost $90 million to build; Hoffman Construction is owed only $15 million.

“Mainly, this is an issue between the lender and the developer,” Eberwein said, “and we just kind of got caught in the crossfire.”
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  #97  
Old Posted Oct 14, 2008, 6:16 PM
IgnoranceIsNotBliss IgnoranceIsNotBliss is offline
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Originally Posted by PacificNW View Post
... So, there are people who are actually living/occupying units in the Waterfront Pearl? I prefer the WF Pearl compared to the Encore...personal opinion.

Last time I visited, they indicated 52 had closed escrow and another handful (maybe 30-ish?) pending. I've seen lights at night!
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  #98  
Old Posted Feb 24, 2009, 9:51 AM
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Still no work on the water feature and waterfront path. I wonder what's going on behind the scenes, and I wonder what the residents are thinking. Seems like a news story to me... but nothing. I guess they're too busy feasting on Sam.
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  #99  
Old Posted Feb 25, 2009, 4:21 AM
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A few lights are on

A few lights are on in the buildings. Click on the image if you want to see more.


Last edited by Castillonis; Mar 19, 2009 at 7:54 PM. Reason: need to touch up zoomify media so you cannot see people
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  #100  
Old Posted Feb 25, 2009, 5:44 AM
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WestCoast WestCoast is offline
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dude, what a cool photo from a flattering angle!

you don't see the ugly glass or weird textures.

beautiful shot
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