Delays for Grand Avenue

The groundbreaking ceremony is being postponed for the third time, which is bound to raise questions on whether the much-ballyhooed project being developed by Related Cos. is running into financing problems. It wouldn't be surprising, given the scope of the project and the uncertain state of the commercial lending market. Related President Bill Witte offered the Downtown News a muddy explanation for the groundbreaking delay, noting that the equity portion of the financing is in place - that's what Related and its investors are plunking down - but that the company has yet to get a construction loan. And it’s the construction loan that will cover most of the cost. “We are continuing ahead, and we have the wherewithal to do it," Witte said, noting that phase one is still slated for completion in 2011 – but offering no details. The first phase of the development is supposed to include a 48-story Mandarin Oriental Hotel, a 19-story residential tower, and a 250,000-square-foot retail pavilion and 16-acre civic park.

The repeated delays have led some in the real estate industry to speculate that the project is facing financial uncertainty. That comes amid the nationwide credit crunch and a softening of the housing market. "These ceremonies are important on a number of levels," said a Downtown figure experienced in large projects, who asked to remain anonymous because he did not want to publicly criticize another development. "If you're not quite there with your funding, it's often far too risky to state that you're going to start. You don't want to take the financial hit if you have to scale back your project in any way."

Groundbreaking, which had been initially scheduled for last October, is now set for sometime this summer.