News   Dec 20, 2024
UrbanToronto Year-End Poll: Vote on the Best Buildings of 2024, presented by Sapphire Balconies
 1.1K     5 
News   Dec 20, 2024
UrbanToronto's Social Media Presence Skyrocketed in 2024
 868     2 
News   Dec 20, 2024
Mattamy Homes Records A Year of Accomplishments
 1.7K     0 

Stinson files for bankruptcy protection

Begs the question what about High Park Lofts? Still under construction with dozens of unsold units. If I'm a buyer, I'd be running away as fast as I could right now.
 
Begs the question what about High Park Lofts? Still under construction with dozens of unsold units. If I'm a buyer, I'd be running away as fast as I could right now.
Click to expand...

High Park Lofts are safe. They are built and will sell eventually. No one need run away as that general neighbourhood will only get better over the next while.
 
But the building itself: classic example of something that took so long to gestate, it looks rather dated and wan.

Oh, and the clock's awful.
 
Incidentally, I can almost see a Gatsby-era version of Stinson producing something like Detroit's Book Tower--if only because it may qualify as its era's version of a "well-meaning but amateurish" skyscraper composition. (Not that I'd tear it down, of course.)
 
http://www.bloomberg.com/apps/news?pid=20601082&sid=adUbCBRwzqHo&refer=canada

Sale Ordered for Site of Planned Toronto Skyscraper (Update1)

By Joe Schneider

Aug. 17 (Bloomberg) -- An Ontario judge ordered the sale of a downtown Toronto parcel to pay off creditors, ending developer Harry Stinson's bid to build the city's tallest residential tower and surpass a rival project by billionaire Donald Trump.

Ontario Superior Court Judge Peter Cumming, at a hearing in Toronto yesterday, named BDO Dunwoody as the interim receiver for the property at 66 Temperance Street in the city's financial district. He issued his order after Stinson failed to sell the land to Dubai-based Tulip Business Developers for about C$30 million ($28.2 million).

Stinson had proposed to build twin towers at the Temperance Street site, the bigger one to rise 81 stories. Trump's plan calls for a 70-story condominium and hotel just one city block away. The Toronto developer's plan collapsed when Graphic Arts Building Corp., which sold him the property, demanded full payment on a C$10.5 million mortgage in default.

``Mr. Stinson is resigned to the fact that it must be sold,'' his lawyer, Arthur Jacques, told the judge yesterday.

Jacques urged the judge not to place the project in formal bankruptcy, or liquidation. It's currently restructuring under Canadian law akin to a Chapter 11 reorganization in the U.S.

He said a bankruptcy filing would devalue the site because international investors view sales of property in that status differently from those in a restructuring.

``The `B-word' is bad,'' Jacques said. ``The word has a negative impact.''

Cumming replied that ``anyone making a bid knows this is a forced sale.''

Bankruptcy Delayed

The judge agreed to hold off putting the project officially into bankruptcy until another hearing on Sept. 4.

In addition to the C$10.5 million mortgage, there is about C$15 million of debt attached to the property, and of that amount, about C$10 million is held by unsecured creditors, said Alex McFarlane, BDO Dunwoody's lawyer.

``There are going to be unsecured creditors here who don't get paid, or don't get 100 cents on the dollar,'' Cumming said.

Trump's plans have also been plagued by problems, as preconstruction sales were lower than anticipated. The project has been delayed for six years as the New York developer switched financial backers and designs.

The tower has been scaled down to 57 stories, which would still make it the highest residential building in the city. Construction is now set to begin later this year.

The case is In the Matter of the Companies' Creditors Arrangement Act and in the Matter of a Plan of Compromise or Arrangement of Sapphire Tower Development Corp., Ontario Superior Court of Justice (Toronto), File No.: 07-cl-7109.

To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net .
 
Those unsecured investors are looking at losing everything. Having read the following, the only thing I can say is what kind of fool would give any developer the full value of a unit in an unbuilt building and take only a personal promise that they'd be paid back with a unit upon completion?

Stinson comes off looking like a crook at best, and his "investors" look like fool-hardy idiots.

Next up the financial implosion of 1 King West...


Saturday Star, Business Section:

Stinson gets turfed from his high-rise endeavour
Ruling places BDO in charge of Sapphire
August 18, 2007
Jennifer Wells

Cutting through the procedural clutter, here's what I see.

Harry Stinson is out of the Sapphire Tower project.

On Thursday, Mr. Justice Peter Cumming moved BDO Dunwoody Ltd. firmly into position as receiver of Stinson's failed blue-glass sky-rise at 66 Temperance St.

Stinson's counsel may split hairs over my choice of words, preferring the "interim receiver" designation.

But Cumming's order makes clear that BDO, and not Stinson, is now charged with the task of managing the marketing and sale of the site.

The guys from Dubai, also known as Tulip Business Developers, appear to have vaporized.

"They chose not to proceed," says Stinson's lawyer, Arthur Jacques.

The boys from Vegas?

Who knows? There are, Jacques adds, other interested buyers.

And so begins the autopsy of at least this piece of Harry Stinson's crumbling empire.

It's a sad tale.

David Bergart can tell you why.

He sounds over the phone like just a regular guy, Bergart does.

His son was married last weekend. That made for a happy time.

Less so was his investment in Sapphire condominiums, which were, to state the obvious, never built.

Bergart has become the unofficial spokesperson for about two dozen investors known as the Sapphire Investors Group, which Stinson called the "special investors." It's easy to see why. Collectively, they invested more than $7 million in the project.

The investments were not composed of small-percentage down payments on condos, but rather full-fee purchases of units at discount prices.

"We wanted something to secure the money we gave him," says Bergart.

What they got were personal promissory notes equal to the value of their investments, exchangeable for condominiums upon the project's completion.

"So that's the way it was supposed to come down," says Bergart. "But guess what? We just have notes."

In other words, these investors are unsecured. Naked.

First in line is Graphic Arts Building Corp., which holds a $10.5 million first mortgage. Graphic is followed by Stinson Financial Corp., which BDO receiver Uwe Manski describes as a wraparound second mortgage encompassing a group of investors who were wooed by a 16 per cent return on their investment, promised by Stinson.

It's a longer list than that, including holders of Stinson Hospitality bonds that total $1.5 million.

As it stands, Manski says, claims total between $25 million and $26 million.

"The reason it's still a loose number is that we haven't done a claims process yet," he says. He refers to the special investors as those "in the bubble," for they have had no representation in court, a circumstance he intends to see rectified.

"They were people who were buying specific units off plans and in virtually every case I think they have a purchase agreement as well as a promissory note. These are not secured. They are not registered against the property.... I've taken it on as my role as monitor to make sure they're protected as well."

Part of the process under Manski will be to examine forensically where the money went, which will please David Bergart greatly.

"I want the books opened," he says. "I want to see where the money came in and where it went out."

Bergart, who is also an investor in Stinson's condo hotel at 1 King St. W., gives Stinson credit as an "idea person" and a "great promoter." Based on Bergart's own investment, this would appear to be self-evident. "I was never expecting the building not to be built. I did my due diligence as best I could."
Click to expand...
 
Don't give up on Sapphire!

It seems like the only way any investors will get much, if anything, out of this deal is if the tower actually gets built, since the money will not be returned in full in the form of condo units or profits from sales if the building doesn't go ahead. Much of the money these "unsecured investors" put in likely went toward sales and marketing costs, not to mention the land itself. And of course, if the project is cancelled, the controversy surrounding the site could devalue the land. Considering all the work and money that went into the design of the building, assembly of the land, and actual sales of units, it would be a sad waste and financial loss not to try and make this project fly. Really, what great alternative does BDO have for the site?

I also think it's sad how the city sabotaged the project through its provincial-minded height restrictions. The original design in particular would have been great for injecting more residents in the business district, an area that needs more than one use, as well as adding some flair to the skyline. This is true even for the scaled back version of the Sapphire.

As long as financing for the site is secured, there is no reason why the tower shouldn't be completed. The hard task of acquiring the site, getting the approvals, completing the design, and getting the sales underway, is done. For any investors to see any return on investment, including the bank holding this property in receivership, they will need to have the patience to see this project through to completion. Otherwise, investors and the city lose big time.
 
I also think it's sad how the city sabotaged the project through its provincial-minded height restrictions.
Click to expand...
The city didn't sabotage the project. There's absolutely nothing provincial about making certain areas off limits for skyscrapers. I'd say a "build towers everywhere" attitude is more provincial than having height restrictions, especially if the intent is to have a New York-like skyline.
 
It isn't like people are flocking to Sapphire in the first place; besides, Stintson wasn't terribly smart to put such a tower, which requires contenious city approval, onto a site that has already seen two past failures beforehand.

From what the news reports suggested, the whole arrangement smells like a shell game to funnel money from one pot to another.

AoD
 
MisterF said:
The city didn't sabotage the project. There's absolutely nothing provincial about making certain areas off limits for skyscrapers. I'd say a "build towers everywhere" attitude is more provincial than having height restrictions, especially if the intent is to have a New York-like skyline.
Click to expand...


I agree that height restrictions are crucial in some contexts, but this project was slated for an area full of mediocre slabs. A great sandstone office building was demo'd on the southwest corner of Bay and Queen in the 70's so that another Brutalist fortress could go up in its stead. The Sheraton hotel next door has that same inhuman quality. The Sapphire in its original appearance would have been relatively high-design for the area. I don't think the vocal NIMBY's who opposed the original tower constitute a design review panel. Stinson was right to say, If I can't build a tower like this here, where can I build it? I don't think people appreciated the amount of design and sales work that went into that first tower, the cost of producing the model, etc. The attitude is almost, "Well, I personally would rather have it a bit different." The ultimate consequence of this kind of exceptionalism is that projects, even quite visionary ones, get cancelled. I worry about this happening to Alsop's proposal for the new film studio. The same thing seems to have happened to the proposed rail link between Pearson and Union Station. I'm all for getting development right, but the bigger picture benefits of projects are sometimes thrown out with the bath water for weak reasons.
 
You must log in or register to post here.

Back
Top