On Tuesday, the City of Mission announced construction on the Mission Gateway project will not resume this summer as expected, citing inadequate funding sources.
The announcement comes after the project was expected to resume this summer, after closing down in March from COVID-19.
Due to the direct and continued impact of the pandemic on the financial markets, two components of the funding required to complete the Mission Gateway are now temporarily on hold while the financial markets adjust to the reopening of the nation’s economy.
The project was relying on multiple funding sources to be fully capitalized; including developer investments, senior and secondary (mezzanine) lenders and proceeds from a bond financing - with bonds repaid entirely from revenues generated by the project.
"Over the past fifteen years, there has been a number of circumstances that we’ve had to overcome. Despite the fact a pandemic was unforeseen, we remain fully committed to seeing this project through," said Andy Ashwal vice president, sr. asset manager of GFI Management Services, Inc., which is co-developing Mission Gateway with The Cameron Group.
Although construction will be paused, the development team will continue to advance the project via leasing and design efforts.
Construction on the site to date has included a multifamily residential complex, small retail units, the 90,000 SF Cinergy Cinema & Entertainment dine-in movie theater, bowling and family entertainment center and a large multi-level parking structure.
The construction of the 200+ room Element Hotel, the 103,000 SF office building and the Tom Colicchio Food Hall will commence upon approval to resume construction.
"We have worked closely with both elected leaders and staff in the City of Mission to collaborate where we can and to be transparent with respect to the challenges we face. We believe in the fortitude of the American people and our ability to recover from adversity, so we are still very hopeful for a speedy economic recovery," Ashwal said.
Construction equipment will be removed from the Mission Gateway site as the delay continues.
The development team will continue with leasing and design efforts despite the delay, and work is underway to find replacement funding to finish the project in a timely manner.
The City (of Mission) nor developers have an anticipated date for the resumption of work on the site, but both remain hopeful it will happen this year.
"We look forward to construction starting in late Q3/Q4 2020, anticipating that the financial markets will heal," Ashwal said.