Dec. 4--The 80Dodge condos are a no-go.

Developers who had planned a high-rise condominium project at 80th Street and West Dodge Road instead plan to build a four-story, extended-stay hotel and two single-story retail buildings.

"It's just too hard in this climate to do a condominium," said Jerry Slusky, attorney for the development team and part owner of the project.

A hotel franchise approached the developers about three months ago, Slusky said. He declined to name the hotel because the parties have not signed a licensing agreement but characterized it as "one of the top two brand names in the country."

The hotel's demographic studies showed a need for an extended-stay hotel in the Dodge Street corridor from 72nd to 102nd Street to accommodate nearby employers and hospitals, Slusky said.

That need, combined with slow condo sales and the changing financial environment, led the developers to conclude that a hotel was a wiser choice, Slusky said.

"First of all, the construction financing for a large high-rise building with a substantial condominium component is very difficult, if not impossible, because you need at least 50 percent with binding contracts."

Only 14 of 56 condos had been reserved. Reservations are not the same as signed sales contracts.

A typical financing arrangement requires the developer to sell a certain percentage of units -- measured in revenue -- before the bank will release money for construction. Some lenders are requiring a higher percentage of pre-sales.

Slower sales of the condos -- which were priced from $260,000 to $3.7 million -- delayed construction start dates, leaving developers in a lurch with people who put money down or who considered buying into a new project.

"People want to be assured of a delivery date. You run into a bit of a Catch-22 there," Slusky said.

"There was uncertainty of so many people about their lives and their situation.

"You have to think about the wisdom in these times of developing a condo project in light of people's ability to buy and own them, financing, etc."

Original plans called for a high-rise building with one floor of retail, two floors of office space and seven or eight floors of condos. Later phases had included a row of town houses, a parking garage and two more towers.

The hotel will be directly behind, or north of, Beverly Hills Plaza, a retail strip center undergoing a $2 million exterior facelift.

The new plans call for two single-story retail buildings west of the existing strip center and planned hotel. Slusky said they would be an extension of the plaza with multiple tenants, not stand-alone single-tenant retailers.

The new plans call for slightly more retail space at 19,000 square feet, compared with the original plans of 16,000 square feet.

The plans come at a time when some national retailers are shuttering stores and halting plans for national expansion.

Slusky said the success of Beverly Hills Plaza and other Dodge Street businesses shows the market there is healthy. Construction on the retail buildings will not start until developers have lease commitments for 50 percent of the space, he said.

"If it were probably anywhere else in town, this most likely wouldn't be going forward," Slusky said. "But there is demand in this area."

He expects construction on the retail buildings to start in late 2009.

The hotel requires city approval for zoning changes. The Planning Commission is scheduled to vote on the plans in January and the City Council in February. If approved, construction would start in spring, he said.

He said he expects to be able to announce the hotel brand by February.

Financing for hotel construction also has tightened, but Slusky said he hasn't encountered problems.

"There still seems to be good financing available for branded and well-located hotels," he said.

Hotel plans call for 104 studio and suite units equipped with kitchenettes. Amenities will include a fitness center, swimming pool and business center.

People who had reserved condos were notified and will receive full refunds of their deposits, Slusky said.

Another multiuse project in the area, which included condos, remains in limbo after the death of developer Ed Boesen of Des Moines. Boesen, who had planned the $6 million Piccolo's Pointe at 77th and Dodge Streets, committed suicide, according to official records.

Since Boesen's death July 15, banks, private lenders and other businesses have sued his estate for more than $50 million.

Slusky said the uncertainty of that development played no role in the decision regarding 80Dodge.

--Contact the writer: 444-1183, christine.laue@owh.com

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