EnCana, developer defer key part of Bow building

Construction of the south tower of the Bow office complex in downtown Calgary,billed as a symbol ofCanada's economic power shift to thewest,has been deferred.

H&R Real Estate Investment Trust, which is developing the new 58-storey headquarters for EnCana Corp., released the scaled-back plans in an annual information form filed this week.

Instead of a previously planned 200,000 square feet of retail, office and cultural space, the south block will now only be an underground parking garage.

It was supposed to be a seven-storey project built with bricks from the demolished York Hotel that once stood in its place.

"The REIT and EnCana have agreed to defer the development of the above-grade part of the south block. EnCana has agreed to reimburse the REIT for certain development costs incurred to date in respect to the south block," the information form states.

'I still think it may end up being a bold symbol of Calgary when it's done, but it's also going to be a symbol of financial prudence.' Ald. Ric McIvor

"The REIT is currently bearing the risk for construction overruns and project delays as the REIT does not have a fixed price contract on this project."

Alan Boras, a spokesman for EnCana, said the decision isdirectly related to thestate of the economy.

"From time to time in economic conditions, as we all know, construction projects have a change in their schedule. But as for the main feature of the Bow project, which is the 58-storey tower, that's underway and continues on," he told CBC News on Wednesday.

Thefirst phase of the north block is estimated to be finished in late 2011, with plans for the whole tower to be completed in 2012.

Skyscraper budgeted at $1.5 billion

The Bow complex, located on two blocks of Centre Street and 5th and 6th avenues S.E., was budgeted to cost about $1.5 billion.

Thetrusthad invested about $402 million in the Bow project as of Dec. 31, 2008.

Named after the nearby Bow River and the tower's curving shape, the glass and steel building was billed by EnCana's CEO as a symbol of the westward shift of economic power in Canada when plans were unveiled in 2006.

"Istill think it may end up being a bold symbol ofCalgary when it's done, but it's also going to be a symbol of financial prudence," said Ald. Ric McIvor.

"There's some corporate giants right now inNorth Americaright now that are in big trouble, partially because of a lack of financial prudence.I think it's a great example that one of the biggest players in the oil and gas industry is being cautious with their money."

Boras said the company is still committedtoproviding a cultural space for Calgarians.

"We continue to work on that. As to the form of that or what it entails remains to be determined, but we remain committed to seeing that comes to fruition," he said.

David Jefferies, the project's architect from Zeidler Partnership, said the bulk of the skyscraper remains unchanged.

"This is a great opportunity to see other things come forward, other alternatives that might go on the site. And at the same time, the basic tower itself, the integrity of the office space, this will still be the finest office space in Calgary."

Progress on north tower

In an update of progress, the information form reveals that the steel has been erected for the northbuilding's first tier, or three floors, excluding the atrium.

"All three tower cranes are now erected and operational. The main ground floor slab has been poured and has opened to trucks for steel erection and other logistics. Steel fabrication is ongoing in many plants across Canada from Quebec through to British Columbia," the form says.

The 1,361 parking spaces beneath the north and south blocks have been pre-leased to EnCana for 25 years, it adds.

"I think this is a good news. An empty hole in the ground would be bad news," said McIvor. "Construction completed to a stage where it can be responsibly delayed until the market turns well, that's good planning."