Posted on Sat, Jan. 19, 2008 Developer suspends bold condo project 40-story One Charlotte was to begin construction this summer DOUG SMITH
Portman Holdings targeted a site next to the Westin Charlotte for 40-story One Charlotte. The 99-unit condo tower was planned to be the most lavish in the center city. (RENDERING COURTESY OF PORTMAN HOLDINGS)

Portman Holdings, citing an uncertain economy, is postponing development of One Charlotte, a high-end, 40-story condo tower planned uptown next to the Westin Charlotte.

The Atlanta developer had planned to start construction this summer of the project, which includes 99 "urban estate homes" priced from $1.5 million to $10 million and amenities ranging from a personal chef to indoor and outdoor retreats.

The news sounds ominous for an uptown market that's generating speculation about overbuilding. Eight high-rise residential projects are under way and seven are proposed or are being considered.

But housing analysts and condo developers believe this situation might be unique to One Charlotte, which was extremely ambitious in size and price.

Portman announced the project in May and opened a sales gallery in September.

"The timing of our sales launch coincided with the subprime lending crisis and unstable credit markets," said Portman senior vice president Roger Zampell. "Fortunately, Portman is a global firm with a track record exceeding 50 years, and the resources, strength and staying power to bring the project back when the capital markets stabilize."

He wouldn't speculate on how soon that might be.

Because Portman owns its site and hasn't started construction, Zampell said, it can afford to wait.

Developers generally have brushed off concerns about the high-end housing market, saying that wealthy buyers typically are immune from economic downturns.

But Charlotte multi-family housing analyst Emma Littlejohn of The Littlejohn Group said One Charlotte's $1-million-plus target buyers -- like people in the broader residential market -- are having difficulty selling homes and can't easily move up to a luxury condo.

"Their values have eroded and they, therefore, are not buying at the top of the market," she said.

One Charlotte was the only center city project with such a high concentration of $1 million plus units, Littlejohn said, making it the most vulnerable.

The uptown market seems OK, she said, because some of the largest projects have secured financing and developers are offering a range of prices for a variety of buyers.

Charlotte 's Jim Donnelly is involved in developing two smaller, $1-million-plus range projects, The Trust on South Tryon Street and Encore on North Tryon Street .

One Charlotte 's decision to delay "is a function of their project, not the high-end product," he said. "I think it was over-priced and didn't have the best location or the things that would make you say, `Hey, this is a no-brainer.' "

Encore, the 20-story addition to the Carolina Theatre, for example, has something special he said: a car elevator that lifts vehicles to upper floor condos.

He said buyers have committed to eight of 20 units there. At The Trust, the conversion of the old Home Federal building, seven of eight condos are sold in a building that emphasizes privacy in a boutique condo setting.

"I'm as bullish as ever on this concept," Donnelly said.

Zampell said potential buyers were enthusiastic about $150 million One Charlotte.

He declined to say how many had committed and how much Portman spent preliminarily on One Charlotte because it's against company policy to disclose those numbers.

Uptown has been a hot spot for high-rise condo projects over the past four years.

Four are finished and occupied -- 13-story 230 South Tryon , 17-story Courtside, 28-story TradeMark and 36-story Avenue. All the projects under way and proposed could produce more than 3,000 residential units and push the center city population from about 10,000 today to more than 21,000 by 2012.

One Charlotte was personally designed by internationally renowned architect and company founder John Portman, with condos ranging from 2,000 to 8,000 square feet. Portman also designed and developed the Westin Charlotte.

Charlotte often is cited as one of the healthiest housing markets nationally under the current economic conditions.

"We have the utmost confidence in Charlotte , a vibrant city that enjoys tremendous growth and an energetic business and civic community," Zampell said.

DEVELOPMENT Doug Smith