(Source: The Globe and Mail)

If developer H&R fails in raising another $175-million in construction financing it may run out of money – a prospect that Blackmont Capital analyst Gail Mifsud calls “unfathomable.”

CALGARY — The developer building the symbol of Calgary’s economic resurgence is scaling back its plans in the wake of the city’s suddenly declining fortunes.The $1.5-billion Bow tower was designed as a landmark that would add new spark to the Calgary skyline and prominence to its contracted tenant, oil and gas giant EnCana Corp.

But amid the credit crunch and wave of oil-induced misfortune washing over the city, H&R Real Estate Investment Trust is delaying construction of a secondary building on the project. In an annual information filing this week, H&R said it is delaying construction of the south tower, a 200,000-square-foot building originally meant to house a mix of retail and cultural arts space.

The 58-storey Bow, which, as the largest office tower west of Toronto will house EnCana, is still being built, H&R said, and analysts said the disappearance of the secondary building is not a material concern.

But H&R said problems related to financing the main tower could force it to further reduce unitholder distributions, unload other assets or sell part of its interest in the Bow tower. In a separate document, it said it wants to auction off 50 per cent to a joint venture partner.

Read Nathan Vanderklippe’s full article “Cash crunch rescales Calgary’s Bow tower” in the Globe and Mail (April 2, 2009)

Further Reading:

Encana Tower scaled back” The Calgary Sun (April 2 2009)

Developer delays construction on South block of Encana project” Metronews.ca Calgary (April 2 2009)

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