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Function employee housing on backburner

Developer looks for increase in cost per square foot to offset rising construction costs



Yet another Whistler project is buckling under the weight of mounting construction costs.

This week developer Don Wensley announced his 30-unit employee housing apartment building in Function Junction, which was approved in July 2005, is now on the backburner.

He had agreed to build the units at $175 per square foot. That number he said is no longer feasible. In order for the project to move ahead he needs council to approve an increase in the cost per square foot, to at least $190. If not, he’s willing to walk away from the deal for the time being.

"This project is stopped dead in its tracks unless RMOW (the Resort Municipality of Whistler) and WHA (the Whistler Housing Authority) gives me a commitment I can rely on that makes sense," said Wensley this week.

He said the red tape and bureaucracy at municipal hall slowed down his project, while construction costs have climbed.

Admittedly the project was not as straightforward as thought to be at the time of rezoning, said RMOW spokesperson Diana Waltmann. However, she said for the project to move from $175 to $190 per square foot it has to go before council for approval.

The WHA had asked Wensley to outline in a letter the detailed construction cost breakdowns as well as the reasons for the delays. But he has balked at that request and is not willing to spend more time, money and energy following up, especially when he’s not convinced the new council will approve the increase at the end of the day.

"I’m not spending another nickel until I know I’ve got a deal cast in stone," he said.

Wensley said he would lose $500,000 if he had to build at $175 per square foot.

He believes it’s more than obvious that construction costs have skyrocketed in the last year. He points to council’s recent decision to increase the library budget more than $1 million to offset those rising construction costs.

"They know what happened to the (Paralympic) arena," said Wensley. "They know what happened to the library. They know what’s happening to the highway. They know what’s happening to the RAV line in Vancouver. Costs are just nuts. And after spending tens of thousands of dollars… I’ve had it. So I’m not killing it. It’s just going on the backburner."

That is disappointing news to WHA General Manager Marla Zucht.

Before the project was rezoned, the WHA canvassed its waitlist to see if there would be interest in the project. Roughly 50 to 60 people on the waitlist said they would be interested in the one-bedroom units in the Whistler industrial park.

"It’s disappointing," said Zucht upon learning Wensley was putting the project on the backburner. "We would definitely like to have the units as soon as possible. There’s a need for them. There’s a desire for them."

The WHA sets a benchmark price for construction and sale of its housing units. At $175 per square foot, a 1,000 square foot unit would sell through the WHA for $175,000. Accordingly, if the construction costs per square foot jumps to $190, the sale price for people on the waitlist will go up too.

Aware of the challenges facing the construction industry, the previous council increased the benchmark development cost specifically for the Nita Lake townhouses. It was one of the last things they did before leaving office.

The Nita Lake developers, who were trying to build the 44 units at the agreed upon price of $175 per square foot, were allowed to build them at $192.

The developers said with that raise they would just recapture their costs of construction and the soft costs, such as the design.

The Nita Lake project was struggling due to a lawsuit against the municipality, which put construction far behind schedule and cost developers millions of dollars.

For the past three years no new units of employee housing have come onto the market. Meanwhile, the waitlist has been steadily growing and is now at its highest ever, with 570 individuals, couples or families waiting for their chance to buy price-restricted housing in Whistler.