BusinessReport.com

Around this time a year ago, Atlanta developer Marc Blumberg was going ahead with plans to redevelop the site of the former Prince Murat Inn with a mix of apartments and retail space on the Nicholson Drive property. But the project has been delayed by the ongoing financial crisis, which has dried up money for developments across the country.

“We had planned on using Wall Street financing, but with the change in the credit markets, that money was no longer there,” Blumberg says. “They were no longer willing to make the types of loans they had been willing to propose.”

The credit crunch forced Blumberg to find alternative ways of paying for the redevelopment, including financing from the U.S. Department of Housing and Urban Development and New Market Tax Credits. But using the government-backed programs caused a total remaking of the financial model. “It’s just more complicated to work with these programs instead of borrowing money,” he says. This has led to a delay of more than a year for the project, called 1480 Nicholson.

IN THE MONEY: Developer Tommy Spinosa currently is looking to get money for Rouzan, his 119-acre TND on Perkins Road east of College Drive that will include 750 homes, retail space and a library.

Despite the changes in financing, plans for 1480 Nicholson remain the same from what they were a year ago: a 208-unit apartment complex between downtown and LSU, along with retail amenities such as a coffee shop and a pharmacy. Blumberg hopes to start work in February or March.

Developer Tommy Spinosa says he’s heard “numerous” stories of some projects being shelved in the Capital Region because of the financial crisis, which has caused such major national lenders as Washington Mutual and Countrywide to shut down. “Some of it is hearsay, but you hear about problems with financing, problems with the market,” Spinosa says.

Some banks have gotten out of the market of loaning money for real estate projects, he says. Other banks aren’t lending money unless they have a longstanding relationship with the borrower, and he or she is willing to put up a lot of money. “They’ve pulled in the reins for a lot of new-type lending,” Spinosa says.

Spinosa currently is looking to get money for Rouzan, his 119-acre TND on Perkins Road east of College Drive that will include 750 homes, retail space and a library. He doesn’t expect any problems borrowing the money, mainly because the project has been broken up into pieces that can be handled by several community banks. “You need to dot the I’s and cross the T’s,” Spinosa says. “Equity is a lot more of a requirement, and the loan-to-value ratios are stricter.”

Pinnacle Entertainment

CLOUDY: The lending picture has become a bit cloudier for large projects such as Pinnacle Entertainment’s $250 million Riviere casino resort planned for River Road.

Chad Ortte, an agent with Donnie Jarreau Companies, which is developing several projects around town, says banks are still lending money for smaller projects that are $10 million or less. “They’ve kept us in check, but they’re still aggressive on owner-occupied buildings,” he says.

But for projects that are a bit bigger, such as the $250 million Riviere casino development, the lending picture is a bit cloudier.

“It’s unprecedented,” says Pauline Yoshihashi, a spokeswoman for Pinnacle Entertainment, which plans to develop the casino resort. “We’re waiting for a little more clarity and focus from the market.”

Yoshihashi says Pinnacle still plans to build its resort on River Road, but the company is waiting for new riverboat regulations to come from the Louisiana Gaming Control Board. While Riviere is on track to open in late 2010 or early 2011, Pinnacle has changed its plans in two other states because of what is going on with banks.

The company pulled the plug on a bid to manage a state-run casino in Kansas and has delayed going ahead with building a resort in Atlantic City, N.J. “There are global issues for everybody,” she says.