Will the economy stop local construction?

With seven high-rise towers, each containing residential and commercial units, slated to be built within blocks of the Downtown Mall, some city officials and developers are suggesting that the slumping economy could doom at least part of the proposed residential construction.

“It’s safe to say that [developers] are not quite in the hurry that they were about 18 months ago,” city planner Brian Haluska said.

None of the developers has formally halted planned construction.

“Most of what we’ve heard is anecdotal at best,” said Haluska, referring to project slowdowns.

The newest project is the Station, with plans submitted to the city in late April. Developer Charley Lewis said the mixed-use undertaking would be built on Garrett Street, but he did not want to give project details until plans are more finalized.

Progress on many of the other units has been slower than desired, and many developers acknowledge that times have been rough between tight financing and the stagnating residential market. Bill Atwood, the architect and developer of the 57-unit Waterhouse at 218 Water St., said the process to move his project along has become increasingly complicated.

“The economic environment in the development business, particularly residential condominiums, is probably at an all-time low,” Atwood said.

The Waterhouse was the first tower of the bunch to break ground, but Atwood said he has had to split the project into phases because of residential real-estate market slowdowns.

“When we started this project, banks thought that condominiums were the greatest things since the stars in the sky,” he said.

The Gleason on Garrett Street — a 44-unit, six-story tower — is under construction after getting its permit in June. But construction was originally slated to begin in March.

“It did take a little longer to get the project under way, but that’s the nature of the market these days,” developer J.P. Williamson said. “Everything just takes a little longer in periods of uncertainty.”

Waterhouse and the Gleason are the only projects to have begun construction. Others are not as far along, either marketing pre-sales — at least 50 percent need to be sold before banks and developers proceed — or are going through the multi-layered city approval process.

“It’s moved about at the speed we thought it would,” said Jim Grigg, the lead architect for the 10-unit development at 600 E. Water St. Grigg said he hopes to pre-sell half the units, designed to be large and fairly expensive, which would garner about $6 million.

“Fundamentally, downtown is very desirable for this type of project,” he said.

Others are not as optimistic. Oliver Kuttner, who sold the Coal Tower property to Coran Capshaw in 2003, suspects that some of the projects are bound to fall off the map — especially those that got a later start.

“The ones that ran out of the gate when times were good, they’ll probably happen sometime,” Kuttner said.

Haluska said the project at 201 Avon has been deferred for quite some time. The project originally required a special-use permit for increasing density to 100 units, but that has expired, as all special-use permits do after 18 months. The architect of 201 Avon did not return phone calls.

The status of the Coal Tower development — which, with 315 units spread out over 62 townhouses and four buildings, is the largest in the works — is also unknown. Calls to co-developer Dillon Baynes were not returned, but construction was supposed to begin this year.

Daphne Berkowitz, one of the partners for the 301 West Main project, said the developers are focusing on getting full approval to build. The nine-story tower on the corner of West Main and Ridge-McIntire won conditional approval from the city’s Board of Architectural Review last month. Originally set at 79 units, the number has been bumped down to 60, but Berkowitz said that was not a result of economic concerns.

“It’s a very complex project with a lot of moving parts,” she said.

Officials have questioned whether downtown could handle such an influx of residential units. Haluska said when it comes to the planning process, supply and demand cannot be considered very much. However, he said, “the rules of supply and demand are in the back of your head as you receive multiple condominium projects in a row.”

Developers say the demand to live downtown is still soaring.

“The demand has always been strong,” Williamson said. Referring to mixed-use, infill development, he added, “That tends to be what the market desires these days.”

But with recent proposed density changes that would allow more units by special-use permit and fewer by right, Kuttner said he thinks downtown development is headed in the wrong direction.

“While there is a strong demand for a lot of condominiums downtown, it’s not easy to live here,” Kuttner said.

“I would prefer to see downtown Charlottesville be a very mixed downtown,” he added. But less by-right density in mixed-use developments means bigger units, and would therefore cost more.

“In the process of doing that, they’re cutting out half their customers,” Kuttner said.

But for now — economic woes or no — developers seem to agree that they can only move forward. As volatile as the markets are, Berkowitz said, they’re not driving project decisions.

“It’s anybody’s guess for what happens in the financial markets,” Berkowitz said. “It too will change, it’s just a matter of when.”