Evidence of the slowing market is visible locally as a walk through the Par Development project will readily attest. Many of the finished units are vacant, with signs offering the property for sale or rent. Earlier this year, the contractor developing the former Spiess site had to beg the city for $2 million more to complete the project. His only alternative, he said, was to walk away.

Common in an irrational housing boom are undercapitalized developers selling overpriced homes or condos to undercapitalized buyers. The results are catastrophic and that scenario, while not completely evident yet, is emerging.

The glut of townhomes and condominiums on the market drives the price lower than what each unit holder owes the bank. Rent for the units becomes cheaper because many are not occupied and owners are desperate to offset mortgages, taxes and association fees. The units sit often unoccupied for years until the glut is absorbed.

Now comes a monumental project in downtown Elgin, a 16-story building with offices, condos and retail that will shape the face of downtown Elgin. It may be that Elgin is such a viable and diversified market that these units will quickly be absorbed by the buying public. But mounting evidence tells us that is not so.

We should care because the city council’s proclivity to give away vast sums of money to developers in financial trouble is now established. A half-erected 16-story building halted for lack of financing would almost obligate the city to assist in its completion. (source: Courier 12/10/06)

If only Bailey went to bat for the old GBL building and Civic Center. Now that the Civic Center is being demolished, what’s going to replace it? How long shall the site remain an empty lot?

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