Global credit crunch could affect 'The Bow'

The developer behind a glass and steel office tower expected to dominate Calgary's downtown skyline has not secured financing for this year's construction activities.

The Bow whose name is drawn from the nearby Bow River and from the tower's curving shape will be 59 storeys high and have an area of 1.7 million square feet. Slated for completion in 2011, the Bow is supposed to be the headquarters of energy giant EnCana Corp.

But the global credit crunch could push that completion date back.

EnCana spokesman Alan Boras said Fridayhis company expects to move into The Bow as planned.

"We have a lease. We expect to move into the building in 2011," he said.

In a third-quarter report, H&R REIT said it mayhave to sell off part of The Bow or the Bell Phase III project in Mississauga, Ont.

"REIT has committed to incurring additional construction and development costs for these projects of approximately $1.1 billion over a four year period of which approximately $390 million is expected to be incurred during the next 12 months," reads the report.

"At present there are no financing arrangements in place on any of the REITs development projects, and the current difficult economic conditions have impacted H&Rs financing strategy. H&R is actively exploring the following alternatives to finance its commitments."

Whether that snag will slow or even halt construction on the Bow isn't clear. H&R REIT's president Thomas J. Hofstedter had little to say on a conference call Friday.

"We can't discuss The Bow at this time. We'll just keep you posted. We don't want to get involved in that discussion right now."

Sheryl Purdy of independent investment firm Leede Financial Markets Inc. said the company must at least be considering suspending construction.

If not, nervous workers and suppliers in Calgary mightimpact the project, she said.

"In my opinion they will be the ones that look at it and say 'I am at risk of not getting paid and if I am not going to get paid, why the hell would I work on this project?'," she said.

"That in itself, I would think would grind things to a halt pretty soon."