91ÊÓƵ

In a move that TMT Development called "unprecedented," the firm has postponed construction on its Park Avenue West tower in downtown Portland until the first quarter of 2010.

The news comes four months after Portland's largest law firm, Stoel Rives, announced its plans to move its offices into the building once completed in 2011. That lease of 157,000 square feet was considered to be the largest and most lucrative in Portland's history, and it signified to most real estate analysts that the $200 million project was on sound financial footing.

The development, though 55 percent pre-leased, has in recent months had trouble securing bank financing. Pension funds and insurance companies have redirected their money from stocks to less risky corporate bonds. Ultimately, this has left less money available for investments.

Stoel Rives made an announcement to its partners about the construction postponement Friday morning, and the firm plans to "review the situation in the coming weeks," according to a release.

Vanessa Sturgeon, president of TMT Development, said the nine-month construction delay is expected to push back Stoel Rives' move-in date by three months.

"It's difficult," she said, "because something like this wouldn't have happened during any other time."

When construction resumes, Park Avenue West will have a slightly new look. Originally designed to be 32 stories tall – the city's third-tallest building – the project is now being scaled back. It will lose its 10 stories of condominium units, as that market has fallen precipitously in the past year.

The building will now have two stories of retail and 20 stories of office space above.

In the next nine months, architects at TVA Architects will be tweaking the building's design to make the smaller version proportional to its construction footprint, Sturgeon said.

As a result of the setback, about 350 union construction jobs will be lost. Overall, the Park Avenue West project was expected to provide jobs to 2,000 union workers.

Sturgeon remains optimistic about the future of the project and believes Park Avenue West will see a financing turnaround in the next three quarters.

"I see a tempered resurgence of the market (in the next nine months)," Sturgeon said. "We'll come back to market fundamentals."