Construction has ground to a halt on a new high-end condominium tower project in the Beltline.

The developer blames rising construction costs for suspending the development.

The decision affects more than five hundred buyers.

Workers are finishing up at the Gateway Midtown construction site. The developer, Resiance Corporation, is suspending construction because of rising costs.

Spokesman Shael Gelfand says, "It's with deep regret we announce, at least temporarily, Gateway Midtown has gone into suspension. It's primarily due to rising costs for labour and for materials. It's just made it too expensive."

The decision affects a lot of buyers and investors. More than 500 of the 650 units have been sold. Their deposits are now being held in trust at a lawyer's office until a decision is made whether to proceed with the project.

Gelfand says, "I can't speculate on how long it'll be suspended, but there's a lot invested in it, in time and effort and people don't just want a hole in the ground. So you would think people would be motivated to get some action on it."

Resiance is informing contractors and suppliers, and at least 41 staff members will lose their jobs. The news comes at a time when the number of new condos under construction in Calgary is at a near record level.

The head of the Home Builders Association for the Calgary region says this is not the sign of an alarming trend. Norm Mross says business decisions like this are made all the time. "There are other projects that have not even gotten off the ground, they have all their development approvals and they could proceed quickly and they make the decision to stop because the conditions are not current."

Even as large home builders like Jayman layoff workers, Mross calls it "right-sizing" not down-sizing.

"With the decrease in demand for housing units, all builders, just as other prudent businessmen, are looking at their current model that they're operating in and if they have too many staff, they're right sizing their staff."

Meantime, Resiance is sending letters to all Gateway Midtown purchasers advising them of the situation.

Anyone looking for more information about the construction suspension can phone Resiance Corporation at 403-278-2388.