A real estate developer purchased a large vacant piece of property along the waterfront of a mid-size southern city, about 10 miles from the current downtown area. The developer’s idea was to transform the property into a commercial center that would attract both businesses and residential tenants. After two meetings with the developer and members of the city’s chamber of commerce and several banking institutions (all of whom had worked together before on successful projects), it was decided that the developer would build several high rise buildings, a park and recreational areas, and a retail shopping center, that the city would extend its transportation system to the new center, and the banks would provide the financing. After the project started, interest from potential tenants was much less than expected and the city did not build the transportation system as quickly as expected. Nevertheless, the developer proceeded with the project as originally planned and asked for additional financing from the banks.
a. Identify at least three problems that occurred in the decision to begin and continue with the project?
b. What were the probable causes of these problems?