John Myers, Jr.Business Reporter

A group of students walks by the Victoria Palace apartment complex in the South Camp Road area of Kingston on Monday, September 24. The development was delayed because of cash flow difficulties but is back under construction. - Rudolph Brown/Chief Photographer

The transformation of a dilapidated commercial complex near the heart of downtown Kingston into apartments is taking longer than expected, triggering concerns from some investors who bought into the development.

A representative of the developer told Sunday Business that the builder had run out of cash and had to refinance the project.

Capital Holdings Limited had initially conceptualised the Victoria Palace apartment complex - located in the South Camp Road/Windward Road area - to capitalise on the expected demand for accommodation during the Cricket World Cup 2007 in March.

"It's not that we didn't make the Cricket World Cup, but we realised we weren't going to get any benefits from it and we sort of toned down and reconsolidated because we were borrowing money left, right and centre," said George Plummer of Remax Island Estates, a real-estate agency working alongside Capital Holdings.

Plummer, however, refused to comment on the value of the investment.

One returning resident complained to Sunday Business that he had been unable to make contact with the developer several months after he should have been handed the keys to the apartment he had bought.

Sunday Business visited the site on Victoria Avenue on Monday where construction was still ongoing almost a year after the expected completion date.

Units to be completed

Plummer said the first set of apartments, comprising 37 units on the ground floor of the three-storey complex, should be completed in October, the second-floor units in November and the top-floor or penthouse units by December.

The December completion date would be met, he said.

The Real Estate Board, in the meantime, has acknowledged that it received several complaints from concerned investors about the delay on Victoria Palace, but general manager, Sonia Graham, dismissed reports that the Board had locked down the development.

The board, she said, had simply initiated discussions with Capital Holdings to help remedy its troubles.

Plummer said that activity had ceased temporarily on the project for two months because of financial difficulties.

"The development was closed for a few weeks awaiting approval of funding from a commercial bank for completion of the project," he said.

"The funding was approved and partial disbursement effected in July. The work restarted five weeks ago," he explained in an emailed response to queries from Sunday Business.

Plummer said 80 per cent of the 30 units that were placed on offer last year were sold within three weeks. Seven more units have since been added, along with facilities for "gymnasium, aftercare, laundry area, and helpers' area," Plummer noted.

For the units sold prior to the delay, the price remains the same.

But the price on units being marketed now will escalate.

The studio, a 300-square-foot unit, that was priced last year at $1.5 million, will now sell for $1.75 million.

The two-bedroom, measuring 600 square feet, is now $2.95 million, up from $2.6 million.

"The only change is we have increased the price for units we are now advertising," said Plummer.

"That is what we have done to make up for whatever increases that we might have incurred in terms of labour."

Plummer said the units are targeted at professional groups such as teachers and the police.

john.myers@gleanerjm.com