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

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Observer Walt

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Observer Walt

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... What isn't correct is that if/when the existing land loan goes into default, the property will be subject to foreclosure by the lender like so many projects in the US and BC have. Once that happens, all bets are off as to if/when Bazis gets to build this project.

It's also not the land loan holding this process up - typically land lenders get paid back through construction financing which IS the hold-up - there simply is nobody in the world today willing to finance a $500 million residential tower no matter how well it is sold. The previous lenders have not gone "belly-up" as you put it - they simply do not want to lend on residential projects anymore - all loans are ALWAYS subject to bank approvals and they simply can't get it done today.

Digging, I didn't specifically spell it out, but you are correct of course. This loan, as with any other, could hypothetically go into default. If that's not corrected, or the terms renegotiated, foreclosure could happen. Will it? I hope not; this project is too important to fail (echoes of GM!)

The lender who went belly-up was Lehman Brothers. I realize others are in the picture.

If this deal can't get financed, and Bazis bowed out, I'm afraid we might be in for several years of this site sitting vacant, before someone else would get up the nerve to do something. It's too good to sit vacant forever, though.
 

Solaris

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that could very well be a possibility .... if not now for sure we'll hear by June 15th ~
 

cdr108

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I've heard through some well placed sources that purchaser deposits are being returned.. Can anyone confirm this?


I hope that's not true ... I want this project to go ahead.
I'd hate to see that lot empty for the next 10 years until the next RE boom cycle, if things fell through.
 

dt_toronto_geek

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Drum did you notice if the flatbed is still parked on Yonge Street in front of the 1BE site? I slipped down Balmuto Street and along Charles and forgot to look up as I passed today.

The flatbed was parked in front of this sign where I stood, presumably unloading the materials that are being assembled on the south end of the 1BE site and presumably moving them over to Blu and/or Uptown. Presumably.

Click on the thumbnail to enlarge, then click again on the image for full size.

 
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wyliepoon

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May 14

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3532850152_e64d3d9bb6_b.jpg
 

Mark M

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1 Bloor

Whatever our personal opinions are about 1 Bloor, it seems everyone I have talked to are actually hoping it will fail. What better way to put a bookend on the shear madness that we witnessed. Fights, overnight line ups to get in, paying homeless people to stand in line. Baker did a great job at building the hype for the sales process but failed to put proper proceedures in place. The media picked up on the three ring circus that ensued. The developer, driven by greed, was raising the prices by $100K per floor. The whole thing started to go sideways from there. Our own little Dubai at Yonge and Bloor.
It's the kind of bad publicity Bazis is not likely to walk away from. The site will be a reminder to excess and greed for years to come. I get a bad vibe everytime I drive by. Hopefully someone else can rescue the site and build something pleasant, sustainable and enjoyable.
 

androiduk

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I'm sure Bazis has been working feverishly behind the scenes for a long time to get something going here. Although they are associated with 3 other projects in Toronto, unless they get something up on this site, their name will be forever tarnished in this city.
 

androiduk

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Thought I would Google Lehman Brothers and see what's up. This looks promising for Bazis but won't happen until next year. This is from the WSJ of May 14.


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WASHINGTON (AFP) - Lehman Brothers, the failed US investment bank, is considering spinning off its remaining assets to investors who feel their value will rise in an economic upturn, US news media reported.
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Internal calculations by Lehman Brothers Holdings Inc., whose assets consist of crippled real-estate and private equity holdings, have estimated their fair market value at about 45 billion dollars, The Wall Street Journal said.

That amount is more than half what it was in September when Lehman's collapse sent the global financial system into turmoil.

Lehman, according to the newspaper, puts the value of the assets at 400 billion dollars at non-distressed prices, including 300 billion dollars in assets servicing.

Some Lehman executives have named the division Lamco, or Legacy Asset Management Co., but the bank itself has yet to determine if that name will be used in a spinoff.

Despite continuing troubles in the real estate market, Lehman officials "say they want to be prepared for a rebound in asset values," the newspaper said.

According to a plan under consideration, the asset-holding company would first be legally separated from the bankruptcy estate by early 2010, after which it would sell shares to the public.

"This would be a bridge to a better time. Today's market is an aberration. We don't think it will stay like this," said Lehman chief restructuring officer Bryan Marsal, a co-CEO of advisory firm Alvarez and Marsal.

The new entity could invest in battered commercial real-estate debt, which would make the company "much more active than current bankruptcy law permits," the Journal noted.

The company could namely participate in federal programs, namely the Public-Private Partnership Investment Program, an effort to buy toxic assets off the balance sheets of troubled banks, the newspaper said, noting the plan was still preliminary and needs approval from Lehman's board, creditors and a US bankruptcy judge.

According to Lehman finance chief William Fox, Lamco has garnered about eight billion dollars in positive cash flow since Lehman's bankruptcy filing eight months ago, which amounts to most of the company's 11 billion dollars balance in cash.

The spinoff, the Journal said, would produce one of the biggest real-estate operators, with a portfolio of 20 billion dollars in equity and loan positions.

Lehman filed for bankruptcy in September as it buckled under the weight of the collapse in US sub-prime mortgages, and the resulting credit crunch. It still owes creditors about 200 billion dollars.
 

gregv

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Toronto Life article about 1BE quoting posts from UrbanToronto:

http://www.torontolife.com/features/whole-lot-nothing/?pageno=1

"Real estate blogs are rife with scuttlebutt on the seeming complexity of the project’s financing. “We’re freaking here. What’s going on?” wrote one person on the UrbanToronto forum. “We’ve waited for decades for something to replace the eyesores on that corner,” wrote another. “If this doesn’t get off the ground, it could be a decade before anything gets built there.” One poster, bemoaning the lack of com*munication from Bazis, said they’d written the local councillor instead. “It’s better than nothing.” To date, there are at least 3,550 posts related to One Bloor East."
 
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