When the Concerto high-rise condominium project opens this year in downtown Los Angeles, developer Hassan "Sonny" Astani will be lucky not to lose his shirt.
With the market for condos in woeful decline, he already knows he won't make much money -- if any.
Progress, at this point, would be to complete the $300-million project while staying out of bankruptcy.
Astani's struggles to keep the project going, his flirtations with disaster and his near-heroic efforts to save a project that is woefully out of time with the market are a painful illustration of the difficulties that face developers when boom goes bust.
Theirs is a business with a long timeline -- it takes years to bring a large project to fruition. But a lively market can go bust in a matter of months. And then what do you do?
"There is a huge inventory of unsold condos in downtown L.A.," said Delores Conway of the USC Lusk Center for Real Estate. "The supply is exceeding demand."
This month, the owners of the nearby Roosevelt Lofts filed for Chapter 11 bankruptcy protection after failing to sell enough condos to open the elaborately renovated office building to residents. Owners of the Brockman Building, another downtown condo project, also recently filed for bankruptcy protection.
Astani, an Iranian immigrant who adopted the nickname Sonny as a boy because he liked the singing duo Sonny and Cher, had a successful track record as an apartment and condo developer before tackling Concerto. It would be the 55-year-old's biggest project, filling a city block in the financial district with three buildings and a park.
But in 2007, after he had invested three years and $10 million, things started to go south. His bank had pulled out, his financial partners in Singapore wanted to walk away, and the once-hot condo market was losing steam. All he had to show for his time and money was a four-story hole in the ground across Figueroa Street from the Original Pantry restaurant.
Astani, who had been broke earlier in his career, was tempted to cut his losses. "People told me to stop," he said.
If the site, once a parking lot bringing in $1.2 million a year, went back to a block of smooth asphalt with painted white stripes, he could at least recoup a little money.
Instead, he pushed on through an exasperating sequence of setbacks and hurdles to build a 30-story condo tower and a six-story loft building, buying out his overseas partners and personally guaranteeing his loan, a risky move developers almost always avoid. He credits his practice of tai chi with teaching him to focus, stay calm and persist.
