Claridge cancels planned Hintonburg highrise

A planned highrise condo tower that would have redefined the Hintonburg skyline has been cancelled.

The 30-storey Claridge Hintonburg was supposed to be built at 1040 Somerset Street West, a short walk from the Bayview O-Train station.

It was to boast unobstructed views of the surroundings, including the Ottawa River. The building would combine “luxurious, sophisticated design with convenience in the heart of one of Ottawa’s trendiest spots,” its website said.

But developer Claridge is cancelling the project, a victim of high interest rates, inflation and rising construction costs.

“The economics are not working on the project after a year and a half of trying to sell it,” Claridge CFO Neil Malhotra told CTV News. “Interest rates have made the costs too high for us to be able to sell the remainder of the units, which is the majority of the building.”

Roughly 20 per cent of the building’s 262 units were sold since the project opened in June 2021.

The Claridge Hintonburg, a 30-storey tower that had been planned for Somerset Street West, has been cancelled. (Claridge)

“With the rising inflationary pressures and the interest rates, it’s to the point where you can’t reasonably make the project work,” Malhotra said.

Claridge is the developer behind the Icon at Carling Avenue and Preston Street--Ottawa’s tallest building at 45 storeys—as well as the upcoming Claridge Moon downtown and Claridge Royale in the ByWard Market.

Malhotra said this is the first time the company has cancelled such a project.

“For us, it’s pretty unprecedented. I don’t recall having this situation. Not in the 20 years I’ve been working in the business,” he said. “We pride ourselves on our track record in completing projects. That’s been a big part of our success.”

Less demand for downtown living

Malhotra cited other issues involved in the lack of demand, including less desire to live downtown due to people’s ability to work from home.

“The reality is in the current hybrid work models, there is less pull for people to pay a premium to live downtown,” he said. Although new home sales are way up, condominium sales have been sliding since the pandemic started, he said.

“We used to sell 500 to 1,000 in a good year. Over the two and a half years of COVID restrictions, we’ve been selling on average about 300 condos a year. That’s in a time when the overall housing market is up.”

Malhotra stressed this is not a situation where a project is cancelled only to be resurrected with higher prices. Late last year, a Richmond Hill-based developer cancelled agreements with about 70 condo buyers in Barrie, Ont. unless they pay $100,000 more.

 “It’s not us going back to people and asking for more money,” he said. “It’s not going to come through as a condominium. If we can figure out another thing to do with it, we will.”

Malhotra said there is no immediate plan for what could go on the land, a prime piece of real estate just west of downtown that Claridge bought in 2014.

 “We’ve got to do back to the drawing board a little bit. Maybe it works as a different kind of project later on. I’m not sure yet, to be honest,” he said. “We have to find a way that’s feasible that the market accepts.”

He also expressed concern about rising costs—such as a new parkland bylaw that increases a developer charge for parkland dedication to 25 per cent of the land value for highrises, instead of 10 per cent.

Council passed that bylaw on Wednesday. Malhotra said it’s an example of the city not creating proper incentives for transit-oriented development.

“I’m scared for the future of the city when we’re already having a hard enough time building stuff, and there’s new fee after new fee after new fee being tacked on,” he said.

“We need to figure out … how we can actually deliver affordable units and not just view development as the solution to every infrastructure cost that the city can’t afford.”