His isn’t the only big commercial project in the city on hold. So is an $80 million, 25-story downtown hotel-condo tower. Developer Ted Reynolds, CEO of The Reynolds Cos., says he had a handshake agreement last fall with a banker who had financed a previous project. In January, the banker told Reynolds he couldn’t follow through. In mid-August, Reynolds still was trying to line up financing, which he hoped to have settled within a couple of months. “The financial markets are in a state of shock,” he says. “They’re all scared to death. You still have some banks that are strongperformers, but even the strong performers are saying, ‘Right now we don’t have an appetite for commercial and residential construction.’”
With many banks struggling to contain loan losses in the wake of a national mortgage meltdown, the ones that are willing to lend want developers to put up more equity — at least 45%, compared with 25% in years past, Reynolds says. “You have to come to the deal with a lot more cash, and you have to put the bank in a zero-exposure position. Whatever you borrow from them, you’ve got to prove to them that at the end of construction, it’s either going to be sold or you have the wherewithal to take them out and pay what’s due.”
Reynolds says the Triangle is in a better position than some other markets because its population is growing, its economy is strong and it’s not overbuilt. He’s confident things will get better soon, and he’ll be happy to put the last eight months behind him. “This has been really ugly. I’ve gone through several of these things, and I’ve got banker friends who have been in the business 35 and 40 years scratching their heads and saying, ‘I’ve never seen anything like this before.’”
RALEIGH — HCL Technologies plans to open an office that will employ more than 500 in Wake County within five years. The technology consultant, based in Noida, India, hasn’t picked a location.
HOLLY SPRINGS — Winston-Salem-based Novant Health wants to build a 46-bed, $110 million hospital that would employ more than 200. But it must win state approval before it can begin construction, and other hospital systems likely will oppose it.
RALEIGH — N.C. State University is reviewing more than 800 employment contracts because it misunderstood a UNC system policy on raises. The system must approve raises of more than 15% and $10,000. An 88% raise given to N.C. State instructor Mary Easley, wife of Gov. Mike Easley, prompted the review.
MONCURE — Uniboard Canada plans to spend $120 million to build a fiberboard factory that will employ more than 100. The Laval, Quebec-based manufacturer also bought a particleboard plant that employs nearly 160 here. No layoffs are planned. Terms were not disclosed.
RESEARCH TRIANGLE PARK — IBM will spend $360 million to build a data center as part of its cloud-computing effort, which uses a scattered network of computers to process data. In an unrelated development, the Armonk, N.Y.-based computer company laid off 30 workers here as part of a companywide layoff of 150 employees. It still employs more than 11,000 here.
YOUNGSVILLE — Eaton opened a plant that employs about 100. The Cleveland-based electrical-equipment maker occupies part of a factory once used by Flextronics International, which closed last year.
ZEBULON — GlaxoSmithKline will lay off 90 workers by October — leaving about 875 — as part of a companywide cost-cutting measure. The British drug maker employs about 5,500 in the Triangle.
MORRISVILLE — Bob Thomas, 60, resigned as CEO and chairman of Charles & Colvard. The maker of moissanite gemstones saw first-quarter sales drop more than 41% in 2008. President Dennis Reed will lead the company while it searches for a CEO.
MORRISVILLE — Eugene Jennings, 54, resigned after a year as CEO of etrials Worldwide. The software developer says Jennings left for family reasons. Its first-quarter loss doubled to $2 million this year.
DURHAM — Addrenex Pharmaceuticals reached a development deal potentially worth more than $200 million with Atlanta-based Sciele Pharma. Addrenex is working on treatments for hypertension and hot flashes caused by menopause.
RALEIGH — Sensus Metering Systems, which makes electric meters, is expanding its headquarters here and plans to add 40 workers, nearly doubling employment. The expansion was expected to be completed this month, and the new workers should be in place by March.
DURHAM — Nextreme, which is developing devices to cool electronic parts, raised $13 million in a round of financing led by Chart Venture Partners of New York. It employs about 40. Other investors include Research Triangle Institute, which spun off Nextreme in 2004.
RALEIGH — Capitol Broadcasting plans to buy six radio stations in Wilmington from Greenwood Village, Colo.-based NextMedia Group for $12 million. It still needs regulatory approval.
SILER CITY — UNC Health Care System purchased Chatham Hospital for $11.3 million. It has managed the 25-bed hospital since 2006.
MORRISVILLE — ChannelAdvisor, which helps businesses sell products online, purchased New York-based software developer RichFX for about $3 million. RichFX customers include Wal-Mart, Brooks Brothers and Saks.
MORRISVILLE — Midwest Airlines will end service from Raleigh-Durham International Airport this month when it scraps two daily flights to Milwaukee. It blamed high fuel costs.
DURHAM — Slate Pharmaceuticalsraised $5 million to boost sales of a testosterone pellet that can be planted under the skin. It will require fewer doctor visits than other treatments.