1 Bloor East, DEAD AND BURIED (Bazis, -2s, Varacalli)

[s100]

CIS Funds to Toronto?

^Hmm sounds like a money laundering scheme to me....

If so, then,

1. I would be very interested to see what goes into each party's tax return for the years 2005 through 2008. I wonder who they deal with at CRA?
2. Is the other part of the equation CIS (Commonwealth of Independent States) funds?
3. How does this affect Canada's economy? Is anyone aware of other CIS investments here?

 

[s100]

Altus, Bazis and Robins Appleby Taub

As I mentioned previously, its on hold as per Altus Group who consults and appraises for Bazis on their properties. Nothing about it being cancelled yet.

If this is a fact, then maybe someone can help me to understand how Altus Group is independently valuating One Bloor Street East when, according to the Robins, Appleby & Taub website, they are also clients of counsel for Bazis?

Here's a chart showing the relationships

 

[emacs]

how Altus Group is independently valuating One Bloor Street East when, according to the Robins, Appleby & Taub website, they are also clients of counsel for Bazis?

perhaps it's due diligence; tin-foil hats not required

 

[s100]

perhaps it's due diligence; tin-foil hats not required

Yes. That's funny ... are you saying that in Toronto, specifically at Yonge and Bloor, the duty of care increases proportionately to the number of related parties doing business with each other?

Direct me to which wiki you found that definition in .. please.

 

[emacs]

Direct me to which wiki you found that definition in .. please.

such a wiki does not exist.

 

[urbandreamer]

s100, just curious: Why the interest in these details? Do you work under cover?

 

[cdr108]

s100, just curious: Why the interest in these details? Do you work under cover?

Maybe they're trying to find the money trail and access the actual value of the lands instead of the shell companies flipping it every several months for double the previous value.

 

[oreoshack]

if this site does turn into a parking lot (knock on wood), then my tour of bloor street for foreign visitors will have to end at bay st. and when they ask me what's past bay st on bloor, i'll hush them up and say "look! the CN Tower!"

 

[bar1967]

I don't get why so many people don't want this building to be built???

 

[archetype]

I don't get why so many people don't want this building to be built???

The reason is simple. This building was marketed (and a bit hyped) during the condo craze at the end of 2007. Prices were high, and then raised while people were lining up to put deposits. People are cynical, spiteful creatures sometimes, and they love to see failure to make themselves feel better.

Personally, I think the Varacalli design is pretty slick, and the location is awesome. The fact this building sold so well at those high prices shows many others agreed. If it wasn't for the current global recession/financial crisis, we wouldn't be questioning 'if' this was going to be built. Still, I think it's only a matter of time. The sales office is 'by appointment only' now, so you can't easily view the gorgeous model of the building, but check out their website and you'll see a pretty good looking plan.

 

[wcy]

There are quite a few vehicles, a backhoe, and about 10 workers on the site today. It looks like they are starting to dig around the perimeter.

I am glad to see some activity after so long with no one to be seen.

 

[khris]

For real? Wow finally SOMETHING!

 

[Observer Walt]

Maybe they're trying to find the money trail and access the actual value of the lands instead of the shell companies flipping it every several months for double the previous value.

This ill-informed comment is typical of some of the misinformation which seems to be rampant in this thread especially.

Fact: I am not aware of any "shell companies" flipping this land every several months. Land transfers are a matter of public record.

Facts: The majority of the site was assembled over a period of years by a subsidiary of Kolter Property, which was once a prominent developer in Toronto (not a shell). For whatever reasons, Kolter decided to leave Toronto and concentrate efforts in Florida. They sold their holding (40,500 square feet of site area) to Bazis, in December 2006, at a price of $62,812,670. This parcel included Roy's Square.

The Bank of Nova Scotia had owned the northeast corner of Yonge Street and Hayden Street, for many years. There were two buildings on this property, one of which had been a bank branch at one time in the past. The bank left years ago, but continued to own it. They sold the site (9,288 square feet of site area) to Bazis in December 2007 at a price of $13,750,000.

The other part required by Bazis to complete the deal was a small dead-end lane, owned by the City, running north from Hayden Street, behind the former bank branch. I understand the City sold it to Bazis recently, reportedly for about $1 million (I can't find the exact figure). In total, Bazis has made three purchases at a total price of about $77 million.

There you go: three perfectly normal transactions, involving entities which are not "shell companies" (Bazis, Kolter, Bank of Nova Scotia, City of Toronto). No "flipping every several months", no shady deals.

The "actual value" of the lands? Probably somewhat less now, thanks to the current market. That is true of just about any property in Toronto now. This does not indicate any dishonesty or anything which is less than straightforward. It's just how the market works, at this time. Will the said "actual value" have any effect at all on this deal? Not unless Bazis decides to bail out and sell, which I suggest is pretty unlikely at this stage.

I have commented before about the wild rumours which seem to have surrounded this proposal. It's discouraging to read. It's one thing to not like the building, or maybe not even to like Bazis, although I don't see reasons for the latter attitude. It's another thing to spread completely false stories, which I have read more than once in this thread.

 

[cdr108]

Here's a chart I made ... it shows some of the transactions with the 1 Bloor Street East property since 2005, when the City sold it. The dotted lines show a relationship and I arranged it in rough chronological order. I am a bit confused about the 2 wk mortgage in 2006 for $32.7 million involving Bazis, prior to the transfer of the property to them??

Update: The City transaction is related to "Roy's Lane", as it was termed prior to the wrecking ball.

Here is a breakdown of the items in the chart:

Land at the south east corner of Yonge and Bloor streets, in the City of Toronto, is valued at $31 million in 2005.

Nastapoka Holdings Inc., who has been involved in these lands since 1990, and is related to Canada Square Management Ltd., mortgages the land for $8.2 million to CIBC in March 2005.

They duplicate this mortgage in April 2006, for $8.2 million again. These CIBC mortgages, totalling $16.4 million, are discharged in November 2006. Six days after their discharge, Nastapoka mortgages the lands to Bazis International Inc., a Kazakh company (more on Bazis later), for $32.7 million.

This Bazis mortgage is discharged two weeks later, at the same time as the "sale" of the lands to One Bloor Street East Limited, for $62.8 million. Also that same day, One Bloor Street East Limited mortgages the lands to Canada Square Management Ltd., for $15 million, and Societe General, for $35 million.

About one year later, One Bloor Street East Limited mortgages the lands to the Bank of Nova Scotia, for $13.75 million, and Societe General, for $50 million.

Thus, One Bloor Street East gave a total of $100 million of mortgages in one year, to December 2007.

Further, the statement on the Robins, Appleby & Taub LLP website, already quoted in this forum, that,

"One Bloor Street East Limited purchased the property on behalf of a limited partnership representing the interests of our client, Bazis International Inc., and Lehman Brothers."

is confusing for me: how did One Bloor Street East Limited purchase any property on behalf of anyone without there being any indication, on title, of a transfer "in trust"? And, if Lehman Brothers have an "interest" in the property, how do they have such interest, and how much exposure does One Bloor Street East have to Lehman Brothers?

*

 

[Observer Walt]

cdr: I'm not sure what point you are trying to make.

For the purpose of buying and developing this land, Bazis is operating as One Bloor Street East Limited. Where you see this name, take it as "Bazis". It is common for a developer with more than one property, such as Bazis, to incorporate a separate company for each project. It's not unusual, and not a secret. It can be easily traced and is known by anyone who pays attention to the larger real estate deals.

Likewise, wherever you see "Nastapoka Holdings Inc.", that's Kolter Property, the previous owner of most of this property. Same story, same usual procedure.

As for the mortgages, I don't know what the point of this discussion is. Part of the post by s100 refers to a series of mortgages which had been done by Kolter, prior to 2006 when the sale to Bazis occurred. Remember that Kolter (Nastapoka) had purchased the property in stages (usually called a land assembly). Without getting too bogged down in technicalities, there were actually seven properties assembled by Kolter, over a period of many years. It would not be surprising at all that there would be a number of mortgage transactions, probably involving various parts of the property, not all of it.

This would answer a number of the questions asked by s100, including the question in his last paragraph, asking how One Bloor Street East Limited purchased the property. This company is actually Bazis, and once you understand that, it's pretty clear. As I described previously, they purchased most of the property from Kolter in December 2006.

As for Lehman Brothers, they initially provided much of the financing to Bazis. At the time, they were active in financing large transactions like this. I'm sure you know what happened to Lehman, subsequently (Google it if you don't).

There have been a number of mortgage transactions, going back a number of years. That is hardly surprising considering all of the circumstances (the number of properties involved in the original land assembly, the subsequent purchases by Bazis, and the exit of Lehman Brothers).

As a further comment, looking ahead, once construction starts, there will almost certainly be at least one further mortgage or construction loan. Again, perfectly routine procedure and not the least bit surprising.

These transactions may seem very technical and perhaps nit-picky, but the point is, I repeat, this is a large transaction, but not at all an unusual one otherwise. No evidence at all of any "flipping", any "shell companies", or other shady-sounding deals.