Suites on a new top floor quickly sold out
Derrick Penner
Sun
Costs on the Shangri-La project are up “tens of millions” of dollars from when it was first proposed as a $250-million tower. Developers have been able to recoup some of the losses. Photograph by : Peter Battistoni, Vancouver Sun
The Shangri-La tower in Vancouver’s West End is breaking its own records as the city’s tallest structure even before it begins taking shape above ground.
Ian Gillespie, head of project co-developer Westbank Projects, said his firm quietly added a 61st floor to the building’s plan several months ago, squeezing in seven extra suites driven a little by demand and a bit by necessity.
Gillespie said the additional units were easy to sell. The developer simply put word out to potential buyers who were unsuccessful during the first rounds of sales.
Plus, Gillespie added, “[the] extra floor was a fairly cost-effective floor to add.”
And with its suites ranging in price from $900,000 to $1.7 million, the additional space gives Westbank several million dollars in additional revenue to help balance escalating construction costs.
Gillespie did not specify the exact amount, just that costs on the mega project are up “tens of millions” of dollars from when it was first proposed as a $250-million tower.
Gillespie said developers have been able to recoup about one-third of the additional costs from increasing prices on the 40 per cent of units that were not sold in the first round of pre-sales.
Another third is being made up from contingency funds in the building’s existing budget, with the remainder coming “out of [our] pockets, quite frankly, and the margins aren’t what [we] expected them to be when we started.”
Gillespie said his firm can absorb the costs rather than having to “value-engineer” by cutting elements out of the project to reduce costs.
Shangri-La is now planned to be a 61-storey, 648-foot tall luxury hotel and deluxe condominium tower, and Gillespie said he and his partners aren’t interested in “sacrificing quality.”
“If you cut corners, people are going to see that,” he added.
Gillespie, and partner Ben Yuen of the Peterson Investment Group, hired James Cheng to design the iconic tower that will form the ceiling of Vancouver’s skyline.
Right now, however, the project is still a hole in the ground.
Since pouring the Shangri-La’s core foundation footing last October, a 100-foot by 100-foot by 12-foot deep block of steel-reinforced concrete, Ledcor Construction Ltd. has built the first three of what will be seven underground levels.
Bruce Dale, the project’s construction manager, said planning is key to making sure the job runs efficiently.
Planning has gone as far as contemplating putting a cafeteria for workers into the building half way up to ease demands on vertical transportation.
Dale added that contractors are also building mock ups of hotel suites and condominiums, from studs down to finishes, so designers can work out details and workers will know how to build a room before they’ve even built a room.
“You want to be out of reaction [mode],” Dale said. “You want to be as proactive as you can.”
Gillespie said that so far, the project is only a few days off its initial schedule, which will still see Shangri-La completed between the spring and summer of 2008.
© The Vancouver Sun 2006
