A year after Trump Tower Tampa was announced, its developers acknowledge project costs have gone up 50 percent and they've passed along a $40 million increase to buyers with reservations.
TAMPA - A year after Trump Tower Tampa was announced, its developers acknowledge project costs have gone up 50 percent and they've passed along a $40 million increase to buyers with reservations.
Even so, they say, 80 percent of the 192 units are spoken for, meaning the majority of those buyers have contracts and have put down 20 percent nonrefundable deposits to live in the 600-foot tall building. The city also says initial permits to start vertical construction should be approved in a few weeks.
Getting to this point has been a roller coaster ride for developers, potential buyers and contractors during the past 12 months. Some buyers backed out, construction deadlines lapsed and the project has been the focus of rumors that the tower is in trouble. Developers said Thursday that even though they had to take a $35 million cut in profit, the tower is on track and will be better than dozens of other condos planned for downtown.
"We did have people fall out because of prices," said Frank Dagostino, chief executive officer of SIMDAG LLC, the Tampa-based developers of the project. "But those people were replaced within hours. We're not going away. We're absolutely going to build this building.”
Developers plan to begin driving pilings within two weeks, Dagostino said. That will take four months, followed by another 28 months of vertical construction on the $225 million building.
The higher costs and tedious soil testing - to ascertain the ground can support the 52- story skyscraper - has pushed the estimated completion date back until at least December 2008. That is a year after the original completion date.
The on-again, off-again appearance of work at the site, along the Hillsborough River at Ashley Drive and Brorein Street, has fueled rumors that the tower won't be built. Some other condominium projects have had trouble filling vacancies after raising sales prices, but the prestige of Donald Trump's name seems to be driving its success.
"The Trump name is associated with the best possible quality in everything from the carpet and glass to the construction," said Patrick Berman, a commercial real estate broker with Cushman & Wakefield in Tampa. “And 80 percent means break even. Your risk is zero. What this means to me is that this project will move forward.”
Dagostino said that's why his group sought out Trump: They knew the power the Trump name would have. “That's why we're not in the trouble of some of the other condos in the area.”
When the project was announced this time last year, it was reserved almost immediately. Potential buyers put down a 10 percent refundable deposit to hold a unit. The original prices ranged from $700,000 to $6 million. Last fall, many of those buyers were informed they had to pay hundreds of thousands of dollars more to keep their condos.
For several months, developers have converted reservations to “hard contract,” meaning buyers fork over another deposit, for a total of 20 percent. Buyers who back out now won't get a refund.
One buyer, Clearwater developer Stephen Page, didn't hesitate to pay more for the 2- bedroom condo he wants on the 34th floor. He said he'll pay just under $1 million.
Page, who has built small condo projects along Pinellas County beaches, said he knows what rising construction costs can do to overall building prices. Still, he said, if it were another condominium developer, he'd be more leery of the increased sales price. However, for the Trump name, he said, he's willing to pay.
"I feel that no matter what, that will be the top tower in Tampa and the quality of his name will ensure the value of the investment,” said Page, who plans to use the condo on weekends. "If any condo is going to go in downtown Tampa that will be a safe bet, I feel it will be Trump."
Observers haven't seen much work going on at the Trump site, but Bob Lyons, president of SIMDAG, said that's because much of the work isn't plainly seen. First, the seawall had to be reinforced to support the massive tower and the city's riverwalk.
Then, Dagostino said, drilling began to test whether the ground can support the pilings. In typical condo projects, he said, three or four pilings are tested this way, but he doesn't want to take chances.
"I don't want to be in the paper 15 years from now about the Trump tower leaning,” Dagostino said. "This isn't a 15-story building. We have to make sure we test enough.”
The developers say they plan to release 19 units for sale later this month or in early March. Those units will cost between $1 million and $1.7 million, Dagostino said.
To make up for the construction cost increases, he said, another 19 units will be sold at completion when they can charge more.