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Globe on Holdouts + Big Box on Queen West
When David stood up to Goliath
Holdout properties are almost a thing of the past in our high-rolling town
BERT ARCHER
Special to The Globe and Mail
To most people, the southwest corner of Queen and Portland is just a parking lot. But to RioCan Real Estate Investment Trust, it's a prize: a huge development site in the heart of downtown Toronto, currently a parking lot, which it is reportedly planning to fill with either a big-box Home Depot or a Sobey's, plus condos or apartments.
If, that is, it gets the neighbours to play along.
At Ali Baba's next door, there are a couple of guys who've decided not to play by the big boys' rules.
A parking lot is not usually one of the more challenging kinds of real estate to develop. But running through the centre of this one is a four-metre-wide right of way, which is shared with the Papaconstantinou brothers, Lambros and Elias, owners since 1981 of 607, 607A and 607B Queen St. W., a single trisected building that abuts the lot.
The right-of-way is a "holdout," one of the very few left in a city that doesn't hold out long to developers. After 12 bullish years in the Toronto real-estate market, pickings are getting slim for developers looking to assemble properties. According to real-estate agent and property assembler Brad J. Lamb, "Downtown Toronto does not have any really big sites any more; you've generally got to put together bits and pieces."
Most of the holdout houses and shops left in the Greater Toronto Area are hanging on, on principle, rather than in the hopes of getting huge payouts. The Papaconstantinou story may be a case in point.
While sitting across the street in Herbie's Herbs, a store he owns with his brother, Lambros says the RioCan representatives "came to me and asked me to sign a piece of paper to give them the rights to my driveway." The Papaconstantinous didn't sign. RioCan also offered to buy the building, but their offer was "ridiculous," says Elias, not elaborating further. (RioCan did not respond to The Globe and Mail's request for an interview.)
After turning down RioCan's offers, Lambros awoke one morning a month ago -- he lives above Ali Baba's, at 607 -- to find a shiny metal fence creatively installed at the boundary of his property, with an approximately two-metre opening onto the area he and his tenants use for parking. He assumes RioCan put it there. "We used to have 14 feet," he says, "now we have seven."
For now, RioCan and the Papaconstantinous are in a stand-off. The brothers want the direct access from the street to their building that they've always enjoyed, and RioCan would probably have difficulty building a big box with a four-metre laneway running through the middle of it. "Will I fight with RioCan and the lawyers?" Lambros says. "I have no choice."
But anyone currently thinking about holding out for a bigger payday would do well to remember the tailor who tried to fight giants 40 years ago. In 1965, Lucio Casaccio refused to sell his shop at the corner of Parliament and Wellesley -- which his family had owned since the early 1900s -- to a big investment firm that was developing his neighbourhood, St. James Town, into a vertical haven for swinging singles. Howard Investments Ltd. had at first offered Mr. Casaccio $45,000, reportedly twice the value of the property. Ultimately, they offered him more than double that, but still he refused, holding out for an even better offer.
The offer never came, and a 24-storey apartment building went up in a V-shape around his property, rendering it a good deal less valuable than it had been. Mr. Casaccio sued Howard Investments and ended up losing even more money. The property, now the New World Coin Laundry, is no longer in the Casaccio family.
But times have changed, and even big corporations seem aware that coming across as big-spending, V-shape-building ogres can put them in a lose-lose situation.
Bob Ross, owner of The Rex Hotel Jazz and Blues Bar on Queen Street just west of University Avenue, is another well-known holdout. About five years ago, Canada Life expressed an interest in buying the venerable property to get more room to build the office tower that now looms overhead. The buyers were so enthusiastic that they gallantly offered to fly Mr. Ross to the best jazz clubs in North America to study their designs, which he could incorporate into a new jazz club that they would build for him.
"I was too busy," Mr. Ross says. "It would have been nice."
He adds that though there was never any "untoward" pressure, "they did come at me in many and sundry ways, and they made me more than a reasonable offer. It wasn't wild, but it was certainly more than reasonable." He declined, and The Rex continues apace, the Canada Life building large but not bullying The Rex's airspace. (Canada Life did not return The Globe's request for an interview.)
From large scale to small scale, then, to West Queen West. Two years ago, agents working for Jeff Stober, owner of the Drake Hotel, approached Rose Vuong, owner for 20 years of the Saigon Flower Vietnamese restaurant four doors east of the Drake. Mr. Stober had already bought the three buildings between his and hers, as well as the building on the other side of hers.
Mrs. Vuong, a widow who wants to pass the restaurant in the increasingly profitable neighbourhood to her two enthusiastic daughters, refused what she says was an offer of $750,000 for the building she paid $120,000 for in 1986.
"I've been here so long, everybody knows me," she says of her desire to stay (she lives upstairs with her daughters). "I know the father, the mother, and now the kids become my customers as well. Anyway," she adds cannily, "right now, from Ossington to Gladstone, nothing's going for under $1-million."
Mr. Stober, who is using the second-floor spaces in the buildings he did buy to house the Drake's artists-in-residence, expresses no hard feelings. "I wish her very well," he says.
He has no current development plans for the block, V-shaped or otherwise.
When David stood up to Goliath
Holdout properties are almost a thing of the past in our high-rolling town
BERT ARCHER
Special to The Globe and Mail
To most people, the southwest corner of Queen and Portland is just a parking lot. But to RioCan Real Estate Investment Trust, it's a prize: a huge development site in the heart of downtown Toronto, currently a parking lot, which it is reportedly planning to fill with either a big-box Home Depot or a Sobey's, plus condos or apartments.
If, that is, it gets the neighbours to play along.
At Ali Baba's next door, there are a couple of guys who've decided not to play by the big boys' rules.
A parking lot is not usually one of the more challenging kinds of real estate to develop. But running through the centre of this one is a four-metre-wide right of way, which is shared with the Papaconstantinou brothers, Lambros and Elias, owners since 1981 of 607, 607A and 607B Queen St. W., a single trisected building that abuts the lot.
The right-of-way is a "holdout," one of the very few left in a city that doesn't hold out long to developers. After 12 bullish years in the Toronto real-estate market, pickings are getting slim for developers looking to assemble properties. According to real-estate agent and property assembler Brad J. Lamb, "Downtown Toronto does not have any really big sites any more; you've generally got to put together bits and pieces."
Most of the holdout houses and shops left in the Greater Toronto Area are hanging on, on principle, rather than in the hopes of getting huge payouts. The Papaconstantinou story may be a case in point.
While sitting across the street in Herbie's Herbs, a store he owns with his brother, Lambros says the RioCan representatives "came to me and asked me to sign a piece of paper to give them the rights to my driveway." The Papaconstantinous didn't sign. RioCan also offered to buy the building, but their offer was "ridiculous," says Elias, not elaborating further. (RioCan did not respond to The Globe and Mail's request for an interview.)
After turning down RioCan's offers, Lambros awoke one morning a month ago -- he lives above Ali Baba's, at 607 -- to find a shiny metal fence creatively installed at the boundary of his property, with an approximately two-metre opening onto the area he and his tenants use for parking. He assumes RioCan put it there. "We used to have 14 feet," he says, "now we have seven."
For now, RioCan and the Papaconstantinous are in a stand-off. The brothers want the direct access from the street to their building that they've always enjoyed, and RioCan would probably have difficulty building a big box with a four-metre laneway running through the middle of it. "Will I fight with RioCan and the lawyers?" Lambros says. "I have no choice."
But anyone currently thinking about holding out for a bigger payday would do well to remember the tailor who tried to fight giants 40 years ago. In 1965, Lucio Casaccio refused to sell his shop at the corner of Parliament and Wellesley -- which his family had owned since the early 1900s -- to a big investment firm that was developing his neighbourhood, St. James Town, into a vertical haven for swinging singles. Howard Investments Ltd. had at first offered Mr. Casaccio $45,000, reportedly twice the value of the property. Ultimately, they offered him more than double that, but still he refused, holding out for an even better offer.
The offer never came, and a 24-storey apartment building went up in a V-shape around his property, rendering it a good deal less valuable than it had been. Mr. Casaccio sued Howard Investments and ended up losing even more money. The property, now the New World Coin Laundry, is no longer in the Casaccio family.
But times have changed, and even big corporations seem aware that coming across as big-spending, V-shape-building ogres can put them in a lose-lose situation.
Bob Ross, owner of The Rex Hotel Jazz and Blues Bar on Queen Street just west of University Avenue, is another well-known holdout. About five years ago, Canada Life expressed an interest in buying the venerable property to get more room to build the office tower that now looms overhead. The buyers were so enthusiastic that they gallantly offered to fly Mr. Ross to the best jazz clubs in North America to study their designs, which he could incorporate into a new jazz club that they would build for him.
"I was too busy," Mr. Ross says. "It would have been nice."
He adds that though there was never any "untoward" pressure, "they did come at me in many and sundry ways, and they made me more than a reasonable offer. It wasn't wild, but it was certainly more than reasonable." He declined, and The Rex continues apace, the Canada Life building large but not bullying The Rex's airspace. (Canada Life did not return The Globe's request for an interview.)
From large scale to small scale, then, to West Queen West. Two years ago, agents working for Jeff Stober, owner of the Drake Hotel, approached Rose Vuong, owner for 20 years of the Saigon Flower Vietnamese restaurant four doors east of the Drake. Mr. Stober had already bought the three buildings between his and hers, as well as the building on the other side of hers.
Mrs. Vuong, a widow who wants to pass the restaurant in the increasingly profitable neighbourhood to her two enthusiastic daughters, refused what she says was an offer of $750,000 for the building she paid $120,000 for in 1986.
"I've been here so long, everybody knows me," she says of her desire to stay (she lives upstairs with her daughters). "I know the father, the mother, and now the kids become my customers as well. Anyway," she adds cannily, "right now, from Ossington to Gladstone, nothing's going for under $1-million."
Mr. Stober, who is using the second-floor spaces in the buildings he did buy to house the Drake's artists-in-residence, expresses no hard feelings. "I wish her very well," he says.
He has no current development plans for the block, V-shaped or otherwise.
