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Originally published Thursday, May 22, 2008 at 12:00 AM

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Bellevue condo project, European Tower, put on hold

The housing slowdown has claimed another local high-rise, high-end condo project. The developer of 16-story European Tower, a downtown Bellevue...

Seattle Times business reporter

The housing slowdown has claimed another local high-rise, high-end condo project.

The developer of 16-story European Tower, a downtown Bellevue project whose design features just one unit on each floor, said Wednesday that it won't start construction until the market turns around.

Eugene Gershman, chief operating officer of Bellevue-based GIS International Group, attributed the delay to reticence among prospective buyers whose current homes are taking longer to sell.

He said buyers indicated that if construction started now, the tower might be finished sooner than they could close on their units.

European Tower has all its permits, Gershman said, and construction will take 14 or 15 months once ground is broken.

Buyers have reserved six of the project's 16 units, he said. Prices at the complex, at Northeast 10th Street and 110th Avenue Northeast, range from $2 million to $5 million.

Gershman said he hopes construction can start this fall.

"European Tower is our cornerstone project — and it will happen," Gershman said.

European Tower's delay is the latest in a string of postponements. The Insignia Towers project in Seattle's Belltown neighborhood recently announced a delay, citing the market slowdown.

And earlier this year, work on the luxury 1 Hotel & Residences in downtown Seattle was postponed until at least late summer while developers redesign the project to make it more appealing to lenders.

Gershman said availability of financing was not a major reason for European Tower's delay. But Dean Jones, of the Seattle marketing firm Realogics, said tight credit is taking its toll on a number of downtown Seattle and Bellevue condo projects.

"If they're not under construction now, with a few exceptions, I would doubt we'll see any break ground this year," Jones said.

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Lenders require a higher percentage of pre-sales while prospective buyers are holding back, he said. So, rather than reduce prices, developers are choosing to wait.

On another project, Gershman said GIS has made no decisions about how to develop a site it owns in Seattle's Denny Triangle, at Minor Avenue and Stewart Street.

Last year the firm proposed a 400-foot hotel-condo tower there. But last week, the city Department of Planning and Development approved a 440-foot apartment tower next door. City rules for the area ban towers that tall that close together.

Records show that GIS representatives told a city design-review board in October that the developer would look at reducing its building to 160 feet if the tower next door were approved. But Gershman said nothing has been decided.

"We still have ways to achieve what we want to achieve there," he said.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

Copyright © 2008 The Seattle Times Company

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