GovernorARNOLD
New Member
V of E where do you stand in all this?
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GovernorARNOLD
New Member
Developer worries he won't be given second chance
Stinson inspected as he removes clothes from hotel after losing control of One King West
JAMES RUSK
August 29, 2007
When Harry Stinson fell last week, the landing was so hard that all he got out of One King West with were the clothes on his back.
Yesterday, his wife was still getting the rest of them from the swish condominium-hotel, out of which he walked for the last time Friday night after a judge granted a request by his former partner, theatre impresario David Mirvish, to appoint a receiver to take over management of the hotel from Mr. Stinson.
"They have to be inspected, one by one, in case I'm smuggling something out. It's pretty childlike," Mr. Stinson said in an interview with The Globe and Mail.
The court-appointed receiver, Ira Smith, said Mr. Stinson can take his personal property from the hotel, but someone from the receiver's staff has to be there when goods are packed to ensure that no hotel items are taken away.
Print Edition - Section Front
Enlarge Image
More National Stories
The journey to acquittal
Acquitted by the courts, but girding for battle over compensation
War being waged against devastating fungus
Criticized Mountie now key to Canada's first war-crimes trial
'It's my name' - and now he has it back
Man found dead two months after wife's killing
Go to the National section
Mr. Stinson - gaunt, haggard and unshaven after two weeks that saw his business empire blown apart by the courts - described what it is like to become a pariah and expressed the hope that he can make a comeback if the city he has helped build will let him.
"It is the most numbing, soul-wrenching experience to suddenly become invisible," Mr. Stinson said in an interview in a coffee shop two blocks from the studio apartment to which he retreated with his wife and six-year-old daughter.
Usually, he gets put on permanent hold when he makes a call, but "if you accidentally make contact with someone, they mumble about how they truly appreciate the struggle as they run off in another direction."
Mr. Stinson said that, while he walked out of One King West and away from everything he accomplished in the past 10 or 11 years, he thinks he could still mount a comeback given a chance.
But he is leery that he will have one.
"There is minimum historic evidence of the opportunity to recover in Canada.
"It's a society that delights in failure. ... If I were in the United States, people would say: 'Next, what?'
"Here, people will say, 'I told you so,' " Mr. Stinson said.
For now, Mr. Stinson is still focused on cleaning the slate by winding down his empire and figuring how to settle his obligations.
He said the hotel operation failed in part because neither the financial nor the legal community understood the nature of the business he was trying to build, and this made it impossible to obtain secure financing.
In a traditional hotel-condo complex, the condo owners buy units, often time-shares that give them access to hotel services, while the hotel owns the units that it rents.
At One King West, the 429 rental units were not owned by the hotel, but were to be leased from unit owners who would let the hotel use them when they were not.
This created a hotel business that owned little property ("a 429-suite hotel would have been financed long ago," Mr. Stinson says) but had an asset - the hotel management contract with the condo corporation - for which lenders would not advance money.
The problems with the hotel eventually swamped his other two businesses.
Two weeks ago, he petitioned the court to order a receiver to sell a parking lot near Bay and Richmond streets on which he had city approval to build Sapphire Tower, a 165.25-metre-tall building of nearly 500,000 square feet.
"We're selling probably the last undeveloped piece of land in the financial core with skyscraper rights on it," he said.
He hopes the sale will net enough that his investors will get their money back with a little profit.
He does not expect any profit from his final project, High Park Lofts in Roncesvalles Village, which is close to occupancy.
The completion costs were high because the building trades, fearful of his financial problems, demanded top dollar to finish the project, he said.
Stinson inspected as he removes clothes from hotel after losing control of One King West
JAMES RUSK
August 29, 2007
When Harry Stinson fell last week, the landing was so hard that all he got out of One King West with were the clothes on his back.
Yesterday, his wife was still getting the rest of them from the swish condominium-hotel, out of which he walked for the last time Friday night after a judge granted a request by his former partner, theatre impresario David Mirvish, to appoint a receiver to take over management of the hotel from Mr. Stinson.
"They have to be inspected, one by one, in case I'm smuggling something out. It's pretty childlike," Mr. Stinson said in an interview with The Globe and Mail.
The court-appointed receiver, Ira Smith, said Mr. Stinson can take his personal property from the hotel, but someone from the receiver's staff has to be there when goods are packed to ensure that no hotel items are taken away.
Print Edition - Section Front
Enlarge Image
More National Stories
The journey to acquittal
Acquitted by the courts, but girding for battle over compensation
War being waged against devastating fungus
Criticized Mountie now key to Canada's first war-crimes trial
'It's my name' - and now he has it back
Man found dead two months after wife's killing
Go to the National section
Mr. Stinson - gaunt, haggard and unshaven after two weeks that saw his business empire blown apart by the courts - described what it is like to become a pariah and expressed the hope that he can make a comeback if the city he has helped build will let him.
"It is the most numbing, soul-wrenching experience to suddenly become invisible," Mr. Stinson said in an interview in a coffee shop two blocks from the studio apartment to which he retreated with his wife and six-year-old daughter.
Usually, he gets put on permanent hold when he makes a call, but "if you accidentally make contact with someone, they mumble about how they truly appreciate the struggle as they run off in another direction."
Mr. Stinson said that, while he walked out of One King West and away from everything he accomplished in the past 10 or 11 years, he thinks he could still mount a comeback given a chance.
But he is leery that he will have one.
"There is minimum historic evidence of the opportunity to recover in Canada.
"It's a society that delights in failure. ... If I were in the United States, people would say: 'Next, what?'
"Here, people will say, 'I told you so,' " Mr. Stinson said.
For now, Mr. Stinson is still focused on cleaning the slate by winding down his empire and figuring how to settle his obligations.
He said the hotel operation failed in part because neither the financial nor the legal community understood the nature of the business he was trying to build, and this made it impossible to obtain secure financing.
In a traditional hotel-condo complex, the condo owners buy units, often time-shares that give them access to hotel services, while the hotel owns the units that it rents.
At One King West, the 429 rental units were not owned by the hotel, but were to be leased from unit owners who would let the hotel use them when they were not.
This created a hotel business that owned little property ("a 429-suite hotel would have been financed long ago," Mr. Stinson says) but had an asset - the hotel management contract with the condo corporation - for which lenders would not advance money.
The problems with the hotel eventually swamped his other two businesses.
Two weeks ago, he petitioned the court to order a receiver to sell a parking lot near Bay and Richmond streets on which he had city approval to build Sapphire Tower, a 165.25-metre-tall building of nearly 500,000 square feet.
"We're selling probably the last undeveloped piece of land in the financial core with skyscraper rights on it," he said.
He hopes the sale will net enough that his investors will get their money back with a little profit.
He does not expect any profit from his final project, High Park Lofts in Roncesvalles Village, which is close to occupancy.
The completion costs were high because the building trades, fearful of his financial problems, demanded top dollar to finish the project, he said.
Blovertis
Active Member
My god, the toll this has taken on Harry... he was merely gaunt and haggard before.
What a bunch of nonsense. Has anybody been rubbing their hands in anticipation of Context, Daniels or Tridel falling apart? No, because they are reputable developers who generally deliver what they promise. People are saying "I told you so" because it has been obvious for years that Harry's "empire" was a house of cards.
There was no shortage of Schadenfreude in the U.S. when it looked like Trump was going to go down in the early nineties.
H
Hydrogen
Guest
The guy always had a bitter edge to him. I guess now he's earned the stripes to be bitter.
3Dementia
Senior Member
... that will be read by thousands of people....
Boy that's a telling comment. But I am ever so grateful for living in the wonderful city that apparently Harry "helped build"... couldn't have done it without him.
rbt
Senior Member
If the financial and legal community fail to understand the business proposal, it probably isn't a failing in intelligence of the thousands of individuals in the financial and legal community.
It is pretty rare that an individual comes up with a new business strategy, that 1) cannot be understood by existing experts, and 2) is successful.
It is much more probable that the didn't bother to take the time to look at the plan in detail (try to understand it) because it didn't strike them as a good thing to invest in.
Edward
Senior Member
I wouldn't mind hearing from you V of E.
AlvinofDiaspar
Moderator
From the Star:
Harry Stinson and David Mirvish: not a love story
It seemed a perfect marriage: Harry Stinson's grand vision and David Mirvish's patient money. That was then.
Sep 02, 2007 04:30 AM
Jennifer Wells
Business Columnist
August 11.
2:02 a.m.
Email from Harry Stinson, reflecting on his crumbling real estate empire.
"It is ironic that the last time I visited David Mirvish's office, his comptroller gave me a Spamalot T-shirt emblazoned with the slogan `I'm not dead yet.'"
David Mirvish sits quietly at a boardroom table. Very quietly. He softly raises and lowers the toes of his black leather lace-ups in the manner of an adolescent seated outside the principal's office. He silently flutters his sapphire blue tie. He considers what he has to say about his just-inked divorce from Harry Stinson, the condo-preneur.
It is such a story.
And best told, as divorce tales always are, by attempting to pinpoint the moment of rupture, the end of the romance, or "the enchantment" as David Mirvish terms it.
The conventional line thus far is that Stinson was the big-dreaming visionary who launched the condo-hotel at 1 King St. W. and that Mirvish was the patient financial backer who, finally, snapped, pushing Stinson into receivership.
This is true.
Though it fails to tell the tale.
"I had read his press," says Mirvish of a time long past, when David met Harry. "There is a tendency in the press to mythologize Harry without looking at the consequences of his actions ... I wasn't forewarned."
Next month, Mirvish Productions will launch Dirty Dancing, introducing theatregoers to the climactic scene in which Johnny draws his Lolita-esque dancing partner onto the dance floor and says, "Nobody puts Baby in a corner."
In honour of the show, David Mirvish has been given a pad of hot pink notepaper imprinted with the modified line: "Nobody puts David in a corner."
"Are you broke?" I ask Harry Stinson.
"Of course I am, but so is the United States."
The rupture: It is May 2004, and Harry Stinson is busily marketing 1 King in that irrepressible Stinson way as a condominium that would operate in "the style of a grand hotel." That month, Stinson successfully sells a grand and expansive condominium in the historic portion of the building to Toronto lawyer Victor Jdanovitch. The selling price: $2.45 million, including four parking spaces, payable by way of three deposits and a closing balance of $2.16 million to 1 King West Inc., a company controlled by David Mirvish.
Or at least those were the terms of one contract.
But there was a second contract that stipulated different terms.
In this version, the bulk of the purchase price, $2.35 million, was payable to Stinson Properties Inc., solely owned by Harry Stinson.
In the spring of 2005, lawyers for 1 King West contacted Victor Jdanvotich's lawyers and said, essentially, where's our money? To which Jdanovitch's lawyers replied that the entire purchase price had been paid.
"Nobody knew about the existence of the other agreement," says Sandy Kilgour, one of Mirvish's lawyers at Miller Thomson. Harry Stinson disagrees: "David was aware I had borrowed money from Mr. Jdanovitch. I never hid that."
Following a meeting where, according to Kilgour, "Harry said mea culpa and apologized to everyone," David Mirvish wrote a cheque to cover the missing funds and accepted from Stinson a pledge, by way of a promissory note, to repay the monies.
Harry Stinson failed to do so.
In April of this year Mirvish sued Stinson, alleging that the misappropriation of funds was a fraud on 1 King West.
"I know he says it's misappropriation of funds," says Harry Stinson, angry now.
"What about the misappropriation of my suite?
What about the misappropriation of my commissions?
What about the misappropriation of my equity in the project?
What about the misappropriation of everything?
None of that counts anymore."
The lawsuit gained little notice amidst the noise of Harry Stinson seeking creditor protection for his interests at 1 King. Stinson's "interests" are corporately unconventional, in that they consisted of the pieces within 1 King that defined the hotel operation. The front desk, elevators, hospitality (food and beverage), housekeeping, and the ill-starred Dominion Club, which, while glorious, has yet to find a profit-making purpose. Stinson had acquired these assets from Mirvish for $11.8 million and had been in default since July, 2006.
Instead of creditor protection, an interim settlement was struck that saw Mirvish agreeing to await payment of a lesser sum – $10.4 million. Of that, $8 million, related to the in-default mortgage. The other $2.4 million we will call the Jdanovitch debt.
Harry Stinson did not pay.
Last Monday, Madam Justice Sarah Pepall of Ontario Superior court expanded her order wrapping all of Stinson's 1 King interests in receivership.
Not included in that is the Jdanovitch suit.
"Mr. Mirvish is determined, I guess, to make sure I come to an unseemly end," Harry Stinson says.
"That doesn't sound like his nature," I respond.
"I don't think David's ever been in this situation before."
Throughout David Mirvish's marriage to Harry Stinson, his financial commitments grew from a million to $4 million to more than $12 million owed by Stinson personally, if you tack on accrued interest. "It was like you touched something and you couldn't get your hand back," he says. Still, he held on to his faith in the developer. "I wanted to believe that with some financial support he would succeed. What I discovered was there was no amount of financial support that would allow him to succeed ultimately."
During his faith-based period, Mirvish came to recognize certain unshakable Stinson characteristics. "It's always everyone else's fault," says Mirvish of Stinson's standard line of defence when things go awry. "He misdirects attention to distract from his own failings."
Mirvish says he weighed very carefully what to do about the outstanding Jdanovitch debt, which was the fault line, Sandy Kilgour says, marking the beginning of the end of the relationship. The enchantment had gone. Last week Mirvish decided to have the lawsuit reinstituted, which begs the question, why?
"My goal isn't to punish Harry," he says. "It's to warn other people of my experience."
"I have lost time, money, energy, credibility, self-respect, possessions," Harry Stinson says.
"But I can recover. I'm not scared by 10 million, 15 million, 20 million. It can be done, easily."
As the Harry Stinson story has been mythologized over time, the bright, hyper-energetic, idea-a-minute Mad Hatter who once picked up birthday-party-going kids in a cherry red hearse, has played the role of David against the unimaginative, risk-wary banking Goliath.
It has been a compelling yarn, one greatly enhanced by the realization of the prow-shaped condominium sliver that arose on King Street, attached to the stately old Dominion Bank building. Together the two pieces became 1 King West.
A decade ago, Stinson was marketing the sliver alone. When he fell into default on the mortgage, David Mirvish happily rode to his rescue. Later, when it emerged that construction of the sliver needed structural enhancements that could be won only be accessing the Dominion property, it was David Mirvish who made the purchase, for $22 million.
The birthing of what became a condo hotel was a signal achievement, and one that fixed the image of Harry Stinson in the public eye as the city's most creative real estate developer. His continuing downfall is the stuff of tragedy, and there's plenty of pathos to go round.
But in business terms, Stinson could more accurately be described as a promoter. Advertising rates of return as high as 18 per cent, Stinson launched an array of investment vehicles. There was the 9 per cent syndicated first mortgage on 1 King offered by Stinson Hospitality Inc., and the 15 per cent notes, also in Stinson Hospitality Inc., to finance, in part, improvements on the Dominion Club. Some, such as the Stinson Venture Fund, which held out the promise of a 15 per cent rate of return, and the Stinson Property Fund, were aborted.
Over time the investors and their investments became commingled, which is how we come to meet Walter Ross, sitting on the patio of a lovely café on Bloor Street West.
A 71-year-old retiree who drives a snappy little deep-blue Miata, Ross recalls that he first became involved with Stinson in 2000, when Stinson was marketing the King St. condos. Ross purchased a unit there, which he still owns today.
Ross subsequently made an investment in Stinson's Sapphire Tower, or what was originally called the Downtown Plaza, on Temperance St. "I was one of the first to walk in and make a down payment," he says of the initial $5,000 he put toward a $25,000 down payment on a $169,000 condominium.
Ross doesn't recall the precise date when he authorized the subsequent transfer of his $25,000 into a mortgage on 56 Temperance. "The monies advanced toward the mortgage would have been put against the suite," he says of his investment. "It was just, basically, to help the project."
In the spring of 2006, Ross received a letter from Harry Stinson announcing that Stinson Financial had terminated the mortgage investment, for reasons not stated. Ross was given the option of receiving a full refund, or instead he could participate in the "Stinson Hospitality 15 per cent note memorandum."
Ross chose the latter. Adding the proceeds from a cashed-in insurance policy, Ross invested a total of $33,000.
An interest payment received in November was the last money Walter Ross saw. He called Stinson up early in the New Year. "He said there won't be any more payments. He said it will accrue and come due on maturity," scheduled for November.
Walter Ross isn't sleeping well. "I get to sleep but I tell you I wake up after 3 1/2 hours. Oh my God. $33,000. You stupid, stupid individual. I use other words."
According to one of Harry Stinson's own affidavits, there are hundreds of investors like Walter Ross who ignored the bright red warning light that is supposed to go off when any promoter promises anything like an 18 per cent rate of return.
"Walter Ross isn't sleeping well," I say.
"Join the club," says Harry Stinson..
He is not dead. Stinson that is. He does not look well, but robustness has never been a Stinson trademark.
It has been years since Stinson took me on a tour of what was going to be his personal, fabulous condominium at 1 King, and spoke of his saviour, Mirvish, in kind terms, and looked forward to the $1.5 million in commissions he was scheduled to receive by selling 1 King condos.
Plus, he had lined himself up as manager on the hotel operations, not so much as day-to-day manager, but as overseer in line for rental management fees.
It all went sour. Mirvish, he says, was supposed to deliver a "turnkey" hotel operation. Instead, he said, there was "no hotel," and sweeping deficiencies throughout the building – both within the units and throughout the common areas – caused Stinson to scramble for funds to make things right.
Gaining the confidence of investors like Walter Ross was essential.
And Trevor Moo.
Like Ross, Moo purchased a unit in 1 King. In the summer of 2003, he exchanged emails with Stinson seeking information about a possible investment in Downtown Plaza. "The structure is quite simple," Stinson wrote. "The funds are treated as a straightforward loan, with a promissory note from Downtown Plaza Development Corp. I am the principal and owner of this company. Throughout the period of the development, interest accrues at a rate of 25 per cent compounding semi-annually."
Moo invested $50,000. In October, 2005, he invested an additional $200,000, which was to earn a 20 per cent rate of interest and carry an option of conversion to a condo in the Sapphire Tower, a project since aborted. After receiving a single interest payment, Moo invested another $200,000, in January, 2006.
He hasn't seen a penny since.
Moo acknowledges his naïveté. Like Ross, he felt that 1 King lent credence to future Stinson investments. For a time he would make weekly 10 p.m. forays to Stinson's office, seeking redress. On Jan. 5, a Friday, Stinson emailed Moo. "We will have the interest cheque ready I believe on Wednesday." On the 9th, Stinson sent a further communiqué: "To be frank, the funds we have been expecting ... have not yet been received .... Unfortunately lenders have little or no sense of urgency, combined with, I believe a certain malevolent streak that motivates them to deliberately stretch out the funding process in order to torture the borrower and accentuate their own personal sense of power."
This would be an example of what David Mirvish referred to as Stinson's habit of misdirecting attention away from his own failures.
"I have promissory notes," says Moo of the stark reality of his lighter-than-air investment. "That's all I have."
"Do you have any assets at all?"
"Now? No... I have a few things left but they are either in the process of disappearing to the people who have loans against them or they are of no value."
Only Harry Stinson knows how deep the hole truly is. He will offer up the anecdote of the 1 King suite owner, who is in the drapery business, who made drapes for the Dominion Club. He's owed 60 grand. He says Trevor Moo is just one of a group of so-called Sapphire special investors, who are owed more than $7 million in total.
There's Ennio Naccarato, a drywaller who has been pleading for a $93,000 payment for the past year. "We were persuaded by him not to lien the property," says Naccarato. "His argument was if you lien I'm going to have continued problems from my investors and other creditors and I'm not going to be able to pay my bills. So stupidly and ignorantly and naïvely we believed him."
Naccarato joins Moo in long line of unsecured creditors. "[Stinson's] very irresponsible and I think oblivious to the fact of what the ripple effect is," says Naccarato. "We're not all Mirvish, you know? We're not all millionaires."
"Do you suffer from depression?"
"Depression in a clinical sense? No. I should."
Over the course of a five-hour conversation, Harry Stinson frequently loops back to the ways in which he has been wronged. The financial community. The legal community. David Mirvish.
For what does Harry Stinson bear responsibility?
"I have to bear a lot of it," he says. "I bear the responsibility for the vision, for putting myself forward as someone who would carry out this vision. For making mistakes, agreed," he says, failing to address the key issue. "But I don't bear responsibility for consciously taking advantage of people or misleading them."
In a painfully ironic moment, a bubbly young woman bustles up to him.
"You must be David Mirvish, eh?"
"I definitely am not."
AoD
Harry Stinson and David Mirvish: not a love story
It seemed a perfect marriage: Harry Stinson's grand vision and David Mirvish's patient money. That was then.
Sep 02, 2007 04:30 AM
Jennifer Wells
Business Columnist
August 11.
2:02 a.m.
Email from Harry Stinson, reflecting on his crumbling real estate empire.
"It is ironic that the last time I visited David Mirvish's office, his comptroller gave me a Spamalot T-shirt emblazoned with the slogan `I'm not dead yet.'"
David Mirvish sits quietly at a boardroom table. Very quietly. He softly raises and lowers the toes of his black leather lace-ups in the manner of an adolescent seated outside the principal's office. He silently flutters his sapphire blue tie. He considers what he has to say about his just-inked divorce from Harry Stinson, the condo-preneur.
It is such a story.
And best told, as divorce tales always are, by attempting to pinpoint the moment of rupture, the end of the romance, or "the enchantment" as David Mirvish terms it.
The conventional line thus far is that Stinson was the big-dreaming visionary who launched the condo-hotel at 1 King St. W. and that Mirvish was the patient financial backer who, finally, snapped, pushing Stinson into receivership.
This is true.
Though it fails to tell the tale.
"I had read his press," says Mirvish of a time long past, when David met Harry. "There is a tendency in the press to mythologize Harry without looking at the consequences of his actions ... I wasn't forewarned."
Next month, Mirvish Productions will launch Dirty Dancing, introducing theatregoers to the climactic scene in which Johnny draws his Lolita-esque dancing partner onto the dance floor and says, "Nobody puts Baby in a corner."
In honour of the show, David Mirvish has been given a pad of hot pink notepaper imprinted with the modified line: "Nobody puts David in a corner."
"Are you broke?" I ask Harry Stinson.
"Of course I am, but so is the United States."
The rupture: It is May 2004, and Harry Stinson is busily marketing 1 King in that irrepressible Stinson way as a condominium that would operate in "the style of a grand hotel." That month, Stinson successfully sells a grand and expansive condominium in the historic portion of the building to Toronto lawyer Victor Jdanovitch. The selling price: $2.45 million, including four parking spaces, payable by way of three deposits and a closing balance of $2.16 million to 1 King West Inc., a company controlled by David Mirvish.
Or at least those were the terms of one contract.
But there was a second contract that stipulated different terms.
In this version, the bulk of the purchase price, $2.35 million, was payable to Stinson Properties Inc., solely owned by Harry Stinson.
In the spring of 2005, lawyers for 1 King West contacted Victor Jdanvotich's lawyers and said, essentially, where's our money? To which Jdanovitch's lawyers replied that the entire purchase price had been paid.
"Nobody knew about the existence of the other agreement," says Sandy Kilgour, one of Mirvish's lawyers at Miller Thomson. Harry Stinson disagrees: "David was aware I had borrowed money from Mr. Jdanovitch. I never hid that."
Following a meeting where, according to Kilgour, "Harry said mea culpa and apologized to everyone," David Mirvish wrote a cheque to cover the missing funds and accepted from Stinson a pledge, by way of a promissory note, to repay the monies.
Harry Stinson failed to do so.
In April of this year Mirvish sued Stinson, alleging that the misappropriation of funds was a fraud on 1 King West.
"I know he says it's misappropriation of funds," says Harry Stinson, angry now.
"What about the misappropriation of my suite?
What about the misappropriation of my commissions?
What about the misappropriation of my equity in the project?
What about the misappropriation of everything?
None of that counts anymore."
The lawsuit gained little notice amidst the noise of Harry Stinson seeking creditor protection for his interests at 1 King. Stinson's "interests" are corporately unconventional, in that they consisted of the pieces within 1 King that defined the hotel operation. The front desk, elevators, hospitality (food and beverage), housekeeping, and the ill-starred Dominion Club, which, while glorious, has yet to find a profit-making purpose. Stinson had acquired these assets from Mirvish for $11.8 million and had been in default since July, 2006.
Instead of creditor protection, an interim settlement was struck that saw Mirvish agreeing to await payment of a lesser sum – $10.4 million. Of that, $8 million, related to the in-default mortgage. The other $2.4 million we will call the Jdanovitch debt.
Harry Stinson did not pay.
Last Monday, Madam Justice Sarah Pepall of Ontario Superior court expanded her order wrapping all of Stinson's 1 King interests in receivership.
Not included in that is the Jdanovitch suit.
"Mr. Mirvish is determined, I guess, to make sure I come to an unseemly end," Harry Stinson says.
"That doesn't sound like his nature," I respond.
"I don't think David's ever been in this situation before."
Throughout David Mirvish's marriage to Harry Stinson, his financial commitments grew from a million to $4 million to more than $12 million owed by Stinson personally, if you tack on accrued interest. "It was like you touched something and you couldn't get your hand back," he says. Still, he held on to his faith in the developer. "I wanted to believe that with some financial support he would succeed. What I discovered was there was no amount of financial support that would allow him to succeed ultimately."
During his faith-based period, Mirvish came to recognize certain unshakable Stinson characteristics. "It's always everyone else's fault," says Mirvish of Stinson's standard line of defence when things go awry. "He misdirects attention to distract from his own failings."
Mirvish says he weighed very carefully what to do about the outstanding Jdanovitch debt, which was the fault line, Sandy Kilgour says, marking the beginning of the end of the relationship. The enchantment had gone. Last week Mirvish decided to have the lawsuit reinstituted, which begs the question, why?
"My goal isn't to punish Harry," he says. "It's to warn other people of my experience."
"I have lost time, money, energy, credibility, self-respect, possessions," Harry Stinson says.
"But I can recover. I'm not scared by 10 million, 15 million, 20 million. It can be done, easily."
As the Harry Stinson story has been mythologized over time, the bright, hyper-energetic, idea-a-minute Mad Hatter who once picked up birthday-party-going kids in a cherry red hearse, has played the role of David against the unimaginative, risk-wary banking Goliath.
It has been a compelling yarn, one greatly enhanced by the realization of the prow-shaped condominium sliver that arose on King Street, attached to the stately old Dominion Bank building. Together the two pieces became 1 King West.
A decade ago, Stinson was marketing the sliver alone. When he fell into default on the mortgage, David Mirvish happily rode to his rescue. Later, when it emerged that construction of the sliver needed structural enhancements that could be won only be accessing the Dominion property, it was David Mirvish who made the purchase, for $22 million.
The birthing of what became a condo hotel was a signal achievement, and one that fixed the image of Harry Stinson in the public eye as the city's most creative real estate developer. His continuing downfall is the stuff of tragedy, and there's plenty of pathos to go round.
But in business terms, Stinson could more accurately be described as a promoter. Advertising rates of return as high as 18 per cent, Stinson launched an array of investment vehicles. There was the 9 per cent syndicated first mortgage on 1 King offered by Stinson Hospitality Inc., and the 15 per cent notes, also in Stinson Hospitality Inc., to finance, in part, improvements on the Dominion Club. Some, such as the Stinson Venture Fund, which held out the promise of a 15 per cent rate of return, and the Stinson Property Fund, were aborted.
Over time the investors and their investments became commingled, which is how we come to meet Walter Ross, sitting on the patio of a lovely café on Bloor Street West.
A 71-year-old retiree who drives a snappy little deep-blue Miata, Ross recalls that he first became involved with Stinson in 2000, when Stinson was marketing the King St. condos. Ross purchased a unit there, which he still owns today.
Ross subsequently made an investment in Stinson's Sapphire Tower, or what was originally called the Downtown Plaza, on Temperance St. "I was one of the first to walk in and make a down payment," he says of the initial $5,000 he put toward a $25,000 down payment on a $169,000 condominium.
Ross doesn't recall the precise date when he authorized the subsequent transfer of his $25,000 into a mortgage on 56 Temperance. "The monies advanced toward the mortgage would have been put against the suite," he says of his investment. "It was just, basically, to help the project."
In the spring of 2006, Ross received a letter from Harry Stinson announcing that Stinson Financial had terminated the mortgage investment, for reasons not stated. Ross was given the option of receiving a full refund, or instead he could participate in the "Stinson Hospitality 15 per cent note memorandum."
Ross chose the latter. Adding the proceeds from a cashed-in insurance policy, Ross invested a total of $33,000.
An interest payment received in November was the last money Walter Ross saw. He called Stinson up early in the New Year. "He said there won't be any more payments. He said it will accrue and come due on maturity," scheduled for November.
Walter Ross isn't sleeping well. "I get to sleep but I tell you I wake up after 3 1/2 hours. Oh my God. $33,000. You stupid, stupid individual. I use other words."
According to one of Harry Stinson's own affidavits, there are hundreds of investors like Walter Ross who ignored the bright red warning light that is supposed to go off when any promoter promises anything like an 18 per cent rate of return.
"Walter Ross isn't sleeping well," I say.
"Join the club," says Harry Stinson..
He is not dead. Stinson that is. He does not look well, but robustness has never been a Stinson trademark.
It has been years since Stinson took me on a tour of what was going to be his personal, fabulous condominium at 1 King, and spoke of his saviour, Mirvish, in kind terms, and looked forward to the $1.5 million in commissions he was scheduled to receive by selling 1 King condos.
Plus, he had lined himself up as manager on the hotel operations, not so much as day-to-day manager, but as overseer in line for rental management fees.
It all went sour. Mirvish, he says, was supposed to deliver a "turnkey" hotel operation. Instead, he said, there was "no hotel," and sweeping deficiencies throughout the building – both within the units and throughout the common areas – caused Stinson to scramble for funds to make things right.
Gaining the confidence of investors like Walter Ross was essential.
And Trevor Moo.
Like Ross, Moo purchased a unit in 1 King. In the summer of 2003, he exchanged emails with Stinson seeking information about a possible investment in Downtown Plaza. "The structure is quite simple," Stinson wrote. "The funds are treated as a straightforward loan, with a promissory note from Downtown Plaza Development Corp. I am the principal and owner of this company. Throughout the period of the development, interest accrues at a rate of 25 per cent compounding semi-annually."
Moo invested $50,000. In October, 2005, he invested an additional $200,000, which was to earn a 20 per cent rate of interest and carry an option of conversion to a condo in the Sapphire Tower, a project since aborted. After receiving a single interest payment, Moo invested another $200,000, in January, 2006.
He hasn't seen a penny since.
Moo acknowledges his naïveté. Like Ross, he felt that 1 King lent credence to future Stinson investments. For a time he would make weekly 10 p.m. forays to Stinson's office, seeking redress. On Jan. 5, a Friday, Stinson emailed Moo. "We will have the interest cheque ready I believe on Wednesday." On the 9th, Stinson sent a further communiqué: "To be frank, the funds we have been expecting ... have not yet been received .... Unfortunately lenders have little or no sense of urgency, combined with, I believe a certain malevolent streak that motivates them to deliberately stretch out the funding process in order to torture the borrower and accentuate their own personal sense of power."
This would be an example of what David Mirvish referred to as Stinson's habit of misdirecting attention away from his own failures.
"I have promissory notes," says Moo of the stark reality of his lighter-than-air investment. "That's all I have."
"Do you have any assets at all?"
"Now? No... I have a few things left but they are either in the process of disappearing to the people who have loans against them or they are of no value."
Only Harry Stinson knows how deep the hole truly is. He will offer up the anecdote of the 1 King suite owner, who is in the drapery business, who made drapes for the Dominion Club. He's owed 60 grand. He says Trevor Moo is just one of a group of so-called Sapphire special investors, who are owed more than $7 million in total.
There's Ennio Naccarato, a drywaller who has been pleading for a $93,000 payment for the past year. "We were persuaded by him not to lien the property," says Naccarato. "His argument was if you lien I'm going to have continued problems from my investors and other creditors and I'm not going to be able to pay my bills. So stupidly and ignorantly and naïvely we believed him."
Naccarato joins Moo in long line of unsecured creditors. "[Stinson's] very irresponsible and I think oblivious to the fact of what the ripple effect is," says Naccarato. "We're not all Mirvish, you know? We're not all millionaires."
"Do you suffer from depression?"
"Depression in a clinical sense? No. I should."
Over the course of a five-hour conversation, Harry Stinson frequently loops back to the ways in which he has been wronged. The financial community. The legal community. David Mirvish.
For what does Harry Stinson bear responsibility?
"I have to bear a lot of it," he says. "I bear the responsibility for the vision, for putting myself forward as someone who would carry out this vision. For making mistakes, agreed," he says, failing to address the key issue. "But I don't bear responsibility for consciously taking advantage of people or misleading them."
In a painfully ironic moment, a bubbly young woman bustles up to him.
"You must be David Mirvish, eh?"
"I definitely am not."
AoD
3Dementia
Senior Member
Pep'rJack
Active Member
elook
New Member
http://en.wikipedia.org/wiki/Idiot is a better fit...
casaguy
Senior Member
I'm having a hard time understanding why this is failing so miserably.
1 King West is a stunner of a building and is at a great location.
Shoddy workmanship and cheap materials aside, I think the problem here is the marketing team. IMAGE IS EVERYTHING. This could easily have been positioned as THE most desired hotel/condo in Toronto. Many more people besides Stinson need to go.
1 King West is a stunner of a building and is at a great location.
Shoddy workmanship and cheap materials aside, I think the problem here is the marketing team. IMAGE IS EVERYTHING. This could easily have been positioned as THE most desired hotel/condo in Toronto. Many more people besides Stinson need to go.
urbandreamer
recession proof
My offer still stands: Stinson you need to raise $10 million? Work for me you'll have the money within 2 years guaranteed or you're fired
I'll admit today I was walking up Yonge ST (i did a huge 15 mile walking tour of the city Sunday) and noticed how slender and kinda cool 1 King W looks. But, it's still a major cheapout and I can understand why it failed. In the hotel biz I'd imagine details are what makes the money; and those fine details are missing here. As it stands today, I believe 1 King W would make an excellent Motel 6....
I'll admit today I was walking up Yonge ST (i did a huge 15 mile walking tour of the city Sunday) and noticed how slender and kinda cool 1 King W looks. But, it's still a major cheapout and I can understand why it failed. In the hotel biz I'd imagine details are what makes the money; and those fine details are missing here. As it stands today, I believe 1 King W would make an excellent Motel 6....
GovernorARNOLD
New Member
Its Stinsons public out cryies for attention that gave 1K a bad name. All this should have been an internal matter.
adma
Superstar
Once again...
Well some people try to pick up girls
And get called assholes
This never happened to Pablo Picasso
He could walk down your street
And girls could not resist his stare and
So Pablo Picasso was never called an asshole
Well the girls would turn the color
Of the avocado when he would drive
Down their street in his El Dorado
He could walk down your street
And girls could not resist his stare
Pablo Picasso never got called an asshole
Not like you
Alright
Well he was only 5'3"
But girls could not resist his stare
Pablo Picasso never got called an asshole
Not in New York
Oh well be not schmuck, be not obnoxious,
Be not bellbottom bummer or asshole
Remember the story of Pablo Picasso
He could walk down your street
And girls could not resist his stare
Pablo Picasso was never called an asshole
Alright this is it
Some people try to pick up girls
And they get called an asshole
This never happened to Pablo Picasso
He could walk down your street
And girls could not resist his stare and so
Pablo Picasso was never called...
Well some people try to pick up girls
And get called assholes
This never happened to Pablo Picasso
He could walk down your street
And girls could not resist his stare and
So Pablo Picasso was never called an asshole
Well the girls would turn the color
Of the avocado when he would drive
Down their street in his El Dorado
He could walk down your street
And girls could not resist his stare
Pablo Picasso never got called an asshole
Not like you
Alright
Well he was only 5'3"
But girls could not resist his stare
Pablo Picasso never got called an asshole
Not in New York
Oh well be not schmuck, be not obnoxious,
Be not bellbottom bummer or asshole
Remember the story of Pablo Picasso
He could walk down your street
And girls could not resist his stare
Pablo Picasso was never called an asshole
Alright this is it
Some people try to pick up girls
And they get called an asshole
This never happened to Pablo Picasso
He could walk down your street
And girls could not resist his stare and so
Pablo Picasso was never called...