Greg Paquette hopes to hit a home run with Ballpark Skylofts, which is yet to be built on 15th Street between Market and Island.

The number of residential buildings bursting from Downtown has slowed to a near halt this year. Many are still coming, albeit later than planned and often changed to include more types of uses, including hotel rooms. But because big investment money is tight, a dozen or so projects planned and approved by the Centre City Development Corp. hang somewhere between the drawing board and groundbreaking. Of those that once had projected a December 2007 groundbreaking – 15th & Island (617 units), Cosmopolitan Square (290 units), Embassy 1414 (97 units) and Library Tower (174 units) – all are delayed.

But most, in some form, are still coming, says Russ Valone of Marketpointe Realty Advisors. “To dig a hole might be a little optimistic right now,” Valone says. “But the demand is going to return.”

Not all the projects are stalled. Bosa Developments, the Godzilla of Downtown builders, continues to lumber along. And small projects, like the Ballpark Skylofts and the Olde Cracker Factory, continue because they aren’t counting on the equity market for capital. “We’re starting construction on our mixed use project,” says Cracker Factory co-owner Caryl Chabot. “We own the land – it’s been in the family since my grandfather bought it for $85,000. We didn’t come in as investors who have to try to make the project pencil out.”

The Cracker Factory, in a historically significant building, will yield office and retail space with four penthouse lofts atop. Construction is under way.

Similarly, Greg Paquette, a partner in Ballpark Skylofts, says the development is moving forward. The seven-story, 16-unit building is planned for 15th Street, between Market and Island.

“We’re still in the quagmire of city planning because we lost both the planners who signed off on our project,” Paquette says. “But we expect to have our permits in 45 to 90 days and we’ll break ground as soon as we do.”

Paquette’s been watching other developments stall and flounder, with the exception of the privately funded projects or those planned by companies that specialize in urban high-rises. He says it all comes down to financing. “We’ve got our financing dialed in,” Paquette says. “We’re a tiny outfit and we don’t have to have huge profit margins. But we see the monster companies lumbering forward, too.”

Bosa, for example, continues to plan to break ground on its Pacific Highway at E project that will bring 473 new condominiums to market in 2011, according to Dennis Serraglio.

“We planned to be able to ride this out,” Serraglio says. “We’ve seen real estate cycles in many markets many times – it’s part of a reasonable balance, but we have a lot of confidence in the Downtown market and we have established relationships with our lenders.

“We’re building. We’re not worried,” he adds.

As Valone sees it, the people who continue to build are seeing the market clearly. “We’ve got 1,800 units in unsold new product coming between now and 2009, and between 400 and 600 resale units on the market, and to some people that signals saturation,” he adds. “But we know the market absorbs 500 to 600 units a year, so by the time a developer who breaks ground now completes his, it will be the only game in town.”

Since 2000, developers have built several dozen new residential and mixed-use projects bringing nearly 8,000 new condos, hundreds of hotel rooms and many square miles of retail space to the once sleepy Downtown. More than 20,000 people have moved in, creating an overnight residential neighborhood. Investors and flippers have come and gone, helping to boost prices and create a buzz as well as an unrealistic perception of demand.

Now, with construction financing tight and tepid interest from buyers, the market has changed to a slow and thoughtful one.

“There are at least a dozen projects that have been entitled and are on hold – some developers are waiting patiently, some projects are being changed to hotels or to add hotel rooms, some are being redesigned to have office components or to be mixed use,” says Sherman Harmer, a principal with Urban Housing Partners. “Mixed use and particularly hotel rooms are easier to get financing for,” he says. “With the slowdown, people have the time to be innovative and creative in what they plan.”

For example, Harmer points to Avion Developments, on 16th and G streets, which began its life on paper as a 500-unit residential tower. The developer now plans to combine retail, commercial, condominiums and apartments in one building.

“Mixed use projects and better designs reduce risk,” Harmer says.

The former Elle project at Columbia and A streets, now called the Columbia Tower, has added a hotel component and the Celagio condo project has been completely redone into Hotel Indigo. The Embassy 1414 project on Columbia and Ash streets is also adding hotel rooms, says Donna Alm of the CCDC.

The Cosmopolitan Tower, planned for Seventh and Island avenues by Simplon, also has added hotel rooms. The second phase of the Solara Towers will include office and retail and is now adding hotel rooms.

Some projects are becoming rentals for the time being, and others are being sold.

The McMillin Co. is looking to sell its property at 14th and K streets, where it planned to build 222 condominiums, 9,000 square feet of retail space and 300 parking spaces, and there are offers for it, insiders say.

In September, KB Home sold its fully permitted project at 10th and B streets to CCDC and Silverwood, which has switched the plans to affordable apartments.

A DR Horton project at 16th and Island is on hold. T.C. Holdings, which has an approved condo project at 11th and B streets, seems to be holding on and waiting, observers say. The developer did not return phone calls for this story.

The publicly held companies that specialize in suburban homes, like KB Home and DR Horton, seem to be on their way out of Downtown.

“They came in because they saw a unique opportunity that took them away from their core business. It’s a big commitment to build a 300-unit building that can’t be sold in phases the way a tract of homes can be,” Harmer observes. “They came and built good projects — Acqua Vista and Cortez Blu, Gaslamp Square — but they are controlled by short-term results. For them to make a three-year commitment to get units to market is very difficult.”

But, Harmer points out, there’s plenty of interest in urban living – renters are coming in droves even though rents are up 15 percent to 20 percent. And, he says, the traffic through sales offices remains high, signaling plenty of interest even if people don’t feel safe to buy right away.

“Breeza and Bayside, and other more expensive projects, are selling easily to more experienced and sophisticated buyers,” Harmer says.

Some developers, including CityMark and Pinnacle, plan to build once they secure financing. CityMark has approval for Pier, a 228-unit project on the west side of Kettner between Fir and Date streets, that was scheduled to break ground in December.

While CityMark will miss its December groundbreaking target for the 228-unit Pier project in Little Italy, company executive Russ Haley expects construction will begin in 2008.

“We’re hoping to break ground next year,” says Russ Haley, vice president of CityMark, which built Aperture nearby. “We think Pier is one of the best projects in one of the best locations and we’re going to be here to deliver on the promise.”

While the enormous Pinnacle Development project at 15th and J, with 617 condominium units and 20,000 square feet of commercial space, is on hold, the company is submitting plans for the adjacent 60,000-square-foot park on the west side of the megablock.

And Bosa may not be the only large condo developer to start construction on a tower in the next 12 months. Doug Austin is redesigning Library Tower to add some type of commercial space, and has said the 16th & G Gateway project, planned by Avion Development to include 525 condominiums, offices and additional retail space, has secured financing on the preliminary plans and should break ground in mid-2008.

The larger developers with product on the market today appear to be weathering the slow down well.

“Doug Wilson and Bosa planned for some carry,” Valone says. “They know they can’t replicate the last five years of sales but they also know their units will sell. That’s good for the owners and prospective buyers, because the developers will maintain the integrity of their projects.”