Delays plague condo builders.

Delays plague condo builders.Location, location, location used to be the mantra in real estate.

But in the condo market, there's a new truism: Delay, delay, delay.

High construction costs. Lack of labor. Picky lenders. Government red tape. Oh yeah, and those pesky hurricanes.

For people holding reservation contracts on condo units, it all adds up to one thing: a wait.

Nowhere is that more evident than in downtown West Palm Beach, where a large cluster of new condominiums is planned.

The biggest questions have surrounded the timing of Opera Place, the largest condo project planned for downtown. The massive, 26-story twin tower is being developed by BAP of Miami.

The 556-unit Opera Place, like many projects, is behind schedule. It was supposed to be done by the end of next year, but it hasn't broken ground yet. But progress is being made: KM-Plaza Construction Services has been chosen to be general contractor, according to an e-mail sent to "The Palm Beach Post" by Willy Bermello, BAP president. Groundbreaking is now set for April 6, and the project is expected to be completed by the end of 2008 or spring 2009, Bermello wrote.

Bermello said the project's delay was because of a change in theater companies occupying the premises. Florida Stage was to have occupied the project, but now DramaWorks will be calling Opera Place home. The delay means higher construction costs, and Bermello said buyers converting reservations into hard contracts are being charged a "construction surcharge" to account for increased construction costs that have hit industrywide. (The surcharge doesn't affect sales already under contract.) Most importantly, Bermello denied reports from real estate sources that he is exploring selling the entire project. "The answer is no," Bermello wrote unequivocally. "From time to time, we receive unsolicited offers from investors. ... As business people, we consider serious offers, but we are developers and not 'flippers.' "

Meanwhile, BAP's other West Palm Beach project, 610 Clematis, just opened -- two years behind schedule. Bermello said all 246 units will be closed by the end of March.

In an e-mail sent in December, Bermello said, "I am never happy with delays because they cost us interest... and affect our bottom line. But in fairness to the (general contractor), the community went through three hurricanes in 24 months, plus a concrete crisis."

Construction costs are forcing some developers to redesign their projects so they can add more units to boost profits. That's the case with Clarkes Hotel.

The five-story condo-hotel project was first pitched in 2003 for downtown West Palm Beach, and early buyers bought in for as low as $82,000. But now it's three years later, and the hurricanes have jacked up construction prices so high that developer James Clarke is seeking the city's OK to add three more floors to the project. That'll allow Clarke to sell more units at higher prices, up to $270,000 a unit.

Building plans now are being revised "at great expense," Clarke said. Then the project has to be rebid. But there's no other way. Without the extra floors "it would have become a dead issue. Costs are through the roof," Clarke said.

It's a similar story at The Place Via Clematis condo. A redesign will mean the project won't be ready until spring 2008, instead of spring 2007.

Developer Gabriel Tarrau said the project is being redrawn to add two more floors. It's the result of a deal worked out with the city, which needed a sliver of Tarrau's land for a parking garage. In exchange, Tarrau will be allowed to make the project taller and boost the number of units to 296 from 253.

That's important, because without those extra units, the project's future was iffy.

Units started selling in June 2004 for $160,000, which sounds like bargain basement in today's market. New units will cost more, of course, and with that, "we're going to make our profits," Tarrau said.

Meanwhile, Palladio Terrace in West Palm Beach's Northwood section is delayed because of a design redo and lender paperwork.

"We are behind in our construction schedule because we value-engineered the building to make it more efficient," said Homero Meruelo of the Merco Group. Put another way, the property's foundation was redesigned to make it work better at a lower cost.

The permit to build the rest of Palladio Terrace hasn't been issued yet, Meruelo said, so construction can't commence beyond the foundation. Meruelo expects the delay to last a couple of months more, because city staffers are backlogged due to Hurricane Wilma.

Unfortunately, without the permit, Merco can't close on its construction loan. Meruelo said his company is providing "temporary funding" until the loan closes. Meanwhile, Meruelo's lender, whom he wouldn't name, is requiring Merco to go back to contract holders and obtain signatures on certain HUD documents that weren't filled out prior to sales.

Meruelo said, however, that the 338-unit, 18-story project should be completed by the spring of 2008.

And what of Barcelona Square in Northwood? That project once was hailed for its potential to revive the northern part of the city. But it has languished in recent months, with little to no activity.

Parkland Companies recently sold the project to Lane Company of Atlanta. A statement said sales will start next month.

Finally, if you're waiting around for The Madison on Flagler Drive, keep waiting. Sources say the WCI Communities project is on ice while the city and WCI negotiate a land swap.

WCI wants to build a 5-story, 30-unit luxury condo on the site of the former Helen Wilkes Hotel. Units would go for as high as $5 million. But the city wants the land for a park. Reportedly, city officials have indicated to WCI that constructing The Madison might be, say, difficult, if the city doesn't get its way.