Regina | Capital Pointe | 29F | 11F | 91M | ?M | Cancelled

[brithgob]

A much smaller scale, of course, but I believe shares were sold in a similar manner in the retail development at Vic and Prince of Wales (the one with Sleep Country and Tim Hortons/Cold Stone)

[jlousa]

In a normal development the development company will put up most of the property purchase price out of pocket. Marketing would begin on the project (after rezoning if needed). The Marketer won't charge the developer at that time but would wait for completion to be paid in full. Once sales reach ~70% the developer will be able to get conventional financing for the project from a bank. The only time a developer would need unconventional financing is if they have gotten themselves into trouble or if they can't meet the sales target.
I have never seen a project go out and get unconventional financing in this manner. This appears that they would only get the money defendant on investors first stepping up to provide it to the finance company. Seems like the finance company either doesn't have 20-30M lying around or they aren't willing to use their own money. I'd hate to see how much they will be charging the developer.
A real shame as this would've been a huge positive for Regina. Even if this one still makes it, the next developer is going to be that much more cautious.

[TechnicalRecession]

Originally Posted by DowntownRiderFan

First, it is not the developer themselves 'selling shares to regular joes'. It appears the developer is getting a mortgage from Fortress Real Capital who then offer investment opportunities to 'regular joes', not shares.

I don't think it is all that uncommon for similar commercial/residential large projects to secure funding in this manner. There is a list of past, current and future projects Fortress Real Capital has done this for. And I know several other investment firms offer similar opportunities (ROI Capital being one).

Your comments about missed dates and poor management are still be valid but I don't see this as a negative towards the project. As for throwing your money down the toilet, there are obvious risks with any investment but the mortgage Fortress would provide the developers appears to be secured with the property as collateral so there is some risk management in place.

I will admit I am far from an expert on how these big construction projects work and could be wrong on my understanding of the above. I have just started looking into some less-than conventional (not stocks, bonds or mutual funds) investment opportunities and was looking at similar products through other companies.

Well my question would be why are they going this route to line up some financing, which seems to be for specific things like demolition costs, sales center etc. Why are they not using more traditional financing like via a financial institution? I am not an expert on these things either, but it seems to me that this is something else that could delay start dates if it is specifically for demolition costs. As each delay passes the project gets to be a tougher sell. We'll see what happens by the end of the month, but if they need this money in place before demolition starts I forsee more delays as that is a short period to raise millions of dollars.

[osmo]

Originally Posted by jlousa

In a normal development the development company will put up most of the property purchase price out of pocket. Marketing would begin on the project (after rezoning if needed). The Marketer won't charge the developer at that time but would wait for completion to be paid in full. Once sales reach ~70% the developer will be able to get conventional financing for the project from a bank. The only time a developer would need unconventional financing is if they have gotten themselves into trouble or if they can't meet the sales target.
I have never seen a project go out and get unconventional financing in this manner. This appears that they would only get the money defendant on investors first stepping up to provide it to the finance company. Seems like the finance company either doesn't have 20-30M lying around or they aren't willing to use their own money. I'd hate to see how much they will be charging the developer.
A real shame as this would've been a huge positive for Regina. Even if this one still makes it, the next developer is going to be that much more cautious.

Great breakdown. Thanks.

[jw6969]

With all the stuff thats been going on with this tower. Should I open the floods gates and asked anything about the weather sign/tower thingy.

[MadMax]

This Fortress media release posted this morning sounds encouraging, not only for Capital Pointe to finally get started but for other possible projects in Regina as well.

The latest numbers certainly back him up. Urbanation's latest report showed a record breaking quarter (2011 Q2) for sales in Toronto, the largest market for Fortress projects. Several new developments are slated for Ottawa and Calgary as the roster of sites expands out of the GTA. The first ever Fortress project outside of Ontario, Capital Pointe in Regina, is now underway and off to an excellent start; Regina's resource base has Fortress looking at several other sites to capitalise on the housing boom needed to support Canada's fastest growing economy. Between municipal incentives such as no development fees or property taxes for purchasers, the market in Saskatchewan's capital shows tremendous upside.

Read more: http://www.sys-con.com/node/1956138

[TechnicalRecession]

Originally Posted by MadMax

This Fortress media release posted this morning sounds encouraging, not only for Capital Pointe to finally get started but for other possible projects in Regina as well.



Read more: http://www.sys-con.com/node/1956138

Haha, 'off to an excellent start'! I'd hate to see what they consider a poor start.. I'd be happy if they'd just 'start' demolition.

[radam_22]

double post sorry.

[radam_22]

I spoke with one of the men working on the City Square project. He told me that it will be finished no later than mid-month.

I went on to ask him about the Capital Pointe project because PCL has the contract for that. He told me that the project is really on the rocks and is pretty much dead as funding fell through even before the end of last year.

He went on to tell me that the reason why they brought on BrightStar last March was a last ditch effort to save the project. Well, here we are 6 months later and nothing moving. It looks as this is pretty much dead, hate to admit it.

[A4Regina]

I kind of figured with all the delays that this project might be in the rough. It'd be nice to at least see the hotel portion built though.

[jw6969]

It status be on the diagrams page be changed to on-hold or cancelled.

[BrannyMuffin]

Demolition is "officially" set to begin on September 26.

http://www.cjme.com/story/regina-s-capital-pointe-project-date-delayed-again/22205

[macblaze]

Originally Posted by BrannyMuffin

Demolition is "officially" set to begin on September 26.

http://www.cjme.com/story/regina-s-capital-pointe-project-date-delayed-again/22205

They also said that this was just a verbal agreement still does not sound to rock soild

[Chaps]

Originally Posted by BrannyMuffin

Demolition is "officially" set to begin on September 26.

http://www.cjme.com/story/regina-s-capital-pointe-project-date-delayed-again/22205

Well at least there is an actual date now! Although it's 3 weeks away again after the other 3 weeks has already passed...and the 3 before that...and the 3 before that.......

[Migs]

http://www.leaderpost.com/Capital+Pointe+back+track+Black+says/5373641/story.html

[Joe Kerr]

Originally Posted by Migs

http://www.leaderpost.com/Capital+Pointe+back+track+Black+says/5373641/story.html

Hmmmmm, well this quote from the article is interesting....

"In any event, Westgate is not legally obligated to return the deposits, Black added."

Now why would he say that? To instill a sense of confidence in the people who have made deposits? Well, I guess you pay your money, you take your chances.

Read more: http://www.leaderpost.com/business/Capit...g+Black/5373641/story.html#ixzz1XPxyAa8D

[Migs]

Originally Posted by Joe Kerr

Hmmmmm, well this quote from the article is interesting....

"In any event, Westgate is not legally obligated to return the deposits, Black added."

Now why would he say that? To instill a sense of confidence in the people who have made deposits? Well, I guess you pay your money, you take your chances.

Read more: http://www.leaderpost.com/business/Capit...g+Black/5373641/story.html#ixzz1XPxyAa8D

Maybe a reporter asked him a direct question. Dunno, hope this thing finally gets going.

[radam_22]

Originally Posted by radam_22

I spoke with one of the men working on the City Square project. He told me that it will be finished no later than mid-month.

I went on to ask him about the Capital Pointe project because PCL has the contract for that. He told me that the project is really on the rocks and is pretty much dead as funding fell through even before the end of last year.

He went on to tell me that the reason why they brought on BrightStar last March was a last ditch effort to save the project. Well, here we are 6 months later and nothing moving. It looks as this is pretty much dead, hate to admit it.

wow, just one day ago I ran into a PCL construction worker working on the paving stones in front of the twin towers and he told me this.

A day later I hear this development. I do feel better about it now, but wary. At this point in time, I would just be happy to see that old building gone. But my confidence in this is still shaky. I guess I will only be sure of demolition when I start seeing heavy machinery being moved onto the site.

[radam_22]

Originally Posted by Joe Kerr

Hmmmmm, well this quote from the article is interesting....

"In any event, Westgate is not legally obligated to return the deposits, Black added."

Now why would he say that? To instill a sense of confidence in the people who have made deposits? Well, I guess you pay your money, you take your chances.

Read more: http://www.leaderpost.com/business/Capit...g+Black/5373641/story.html#ixzz1XPxyAa8D

funny, I thought the same thing. When you deposit large sums of money into these things, a refund is not always obligatory by the developer. Many people, like myself, are not usually sure if they should spend money on something until you start seeing construction. But, then again how is a project supposed to get moving without a certain number of units sold.

[Joe Kerr]

Originally Posted by Migs

Maybe a reporter asked him a direct question. Dunno, hope this thing finally gets going.

Well of course, somebody asks you a question and you provide an answer - that's the way it works.

But let's unpack this a little bit more. Mr. Black is supposedly in town to promote this project and alleviate any doubts or fears that investors might have about this project. In other words, he's here to blow a lot of sunshine up our asses about what a wonderful project this is going to be and... don't worry... everything will turn out all right.

And then he goes and says, well we've got your money and we don't really need to return it -- even if the project goes down the crapper.

Now if you were trying to sell people on this project, is that the kind of thing you would say? Of course not.

This project hasn't passed the smell test right from the beginning, and it's only getting farther past it's due date.