DUBAI An 81-year-old mother's timely intervention saved a small-time Dubai developer from doom after banks refused to lend him money to complete his maiden project.
When Ashok J. Galgotia, 56-year-old chief executive of first-time developer Triveni Builders and Promoters Ltd, faced a Dh10 million bill from about a dozen contractors in late 2009 for his dream six-storey project La Fontana di Trevi — an Italian-inspired building in Arjan, off Dubai's Umm Suqeim Road — he felt there was nowhere to turn.
"The banks — 11 of them — slammed their doors in my face. There was a real possibility of the building not going up, of power not being available indefinitely. I had several sleepless nights," he said.
Mum to the rescue
When his mother Sudha heard about Galgotia's woes, she agreed to sell their ancestral land in India's Haryana state to pay the Dubai contractors. "When my son told me he was facing a big problem," Sudha told XPRESS (in Hindi), "I immediately consented to the idea [of selling the ancestral property]. It was out of a mother's concern. What else would it be?"
The Dh9 million proceeds from the sale of half of the 20-acre Haryana plot of land allowed Galgotia to keep construction activity going. "I had zero knowledge of the real estate industry. Friends and family told me: ‘Don't bring money from India to Dubai … people do it the other way around'. But I had no choice."
Galgotia, a mechanical engineer, first came to Dubai in 1986 to work as a manager with a car dealership. Triveni Builders is a subsidiary of Triveni Trading Group, a UAE-based cable management manufacturer he founded in 1993 and employs about 100 people today.
Galgotia made a foray into real estate when he brought a plot in Arjan in 2006 from developer Mizin. La Fontana had a smooth start in February 2008.
"In 17 days, all our units were sold off plan. Investors from China, Iran and Dubai were buying like crazy. The building was supposed to be completed in 17 months," said Galgotia, whose family is from Haryana's Sohna district.
When he started building the 120-unit low-rise in December 2008, the US sub-prime mess was already unravelling with the collapse of Lehman Brothers. That's when things turned sour. As the credit crunch unleashed its full might, 30 out of the 90 investors in the property were never heard from again. Galgotia said they tried selling units during 2009-2010 at cost or even below cost in order to close La Fontana's books, but even that did not work due to the community's deserted look, with no street lights and greenery. "At that time, we had already spent Dh3 million to lay the foundation. By law, the big hole on the ground must be refilled within six months if construction is stalled."
But the clouds slowly started to clear: The master developer, Dubai Properties Group, helped Galgotia by allowing a delay in final payment for the land. "The project director assured me when I was at my lowest that our building will be connected to the next-door Dubiotec's power substation." Power was finally connected on December 9, 2011.
By the end of January 2012 — 37 months after ground-breaking — the Dh80 million building was ready for occupancy.
"I lost a lot of my hair but I also learnt that when all else fails, my mother came to my rescue," he said, while citing Dubai's marking of 2012 as the year of felicitating mothers.
Today, La Fontana is the only completed project in the sprawling 60-hectare Arjan development and investors are getting the keys to their apartments.
Maxine, from the UK, was one of the first residents who moved into a one-bedroom unit rented for Dh28,000 on February 16. "We like the building and the unit. It's fabulous, affordable and not far from my son Craig's garage in Al Quoz," said Maxine.