Strategic Group has paused the conversion of Calgary’s historic Barron Building to residential from office.

Calgary-based Strategic cited higher than expected costs as the reason for its decision in a statement issued to local media outlets. The company hit the paused button even though the city committed $8.5 million through its Downtown Incentives Program.

“It’s just a sign of the times — it’s not just unique to them,” Greg Kwong, Alberta region managing director at CBRE, told the Calgary Herald, referring to high construction costs.

According to the Alberta government’s major project’s website, the project’s original cost was expected to be $100 million.Strategic broke ground on the redevelopment to considerable fanfare in March 2023. Mayor Jyoti Gondek and George Chahal, a Calgary MP, were among dignitaries who attended the launch.

Built in 1951, the Barron Building was Calgary’s first skyscraper at a time when Alberta’s oil and gas industry was in its infancy.

Plans called for the conversion of the property at 610 8th Avenue S.W. to be completed this year. The Barron Building is slated to have 118 modern residential rental suites spanning 100,688 square feet. Retail units comprising 8,580 sf would be included in the project.

Strategic has pledged to put the project through a value-engineering process, compensate builders in full when construction resumes and, ultimately, complete the project.