I was approached a few years ago to appraise that site for a lender that was contemplating financing the project. It took me all of about 2 hours to figure out that at the then prevailing retail prices of the resulting units the project was a long shot. Once I passed that information along to this bank they withdrew.
The combination of site engineering necessary to max out the density, the shape of the lot, vehicular ingress/egress, the prevailaing price structure (at the time) and the number of hurdles the developers faced at the time were going to cost big bucks in pre-development and holding costs. It takes a long time to resolve these problems, and time is money in the development game.
Obviously this developer has stuck with it and they did find a lender (and an appraiser) who came to a more optimistic conclusion. The prices have come up enough to economically justify the development at some point, so to that extent I was wrong about the feasibility. But as for the holding costs and engineering and risks they were taking it looks like I was right. Had it taken them 2 years less to do this they would have made out okay. But the tale of the red tape has turned out to be a killer. I wouldn’t want to be in their shoes now.
