AndreaPalladio
Senior Member
First off, there was no race. Secondly, We didn't do anything to the "homegrown, Toronto developer". He got in over his head, and now faces the outcome of his own incompetence.
|
|
|
RJR123
Active Member
And, ultimately, who the hell cares what the "nationality" of the developer is?? Give me good architecture and I couldn't care less who built it.
adma
Superstar
Context is "homegrown", right?
JasonParis
Moderator
Welcome to the forum Harry!
AlvinofDiaspar
Moderator
From the Globe:
LEGAL PROCEEDINGS
Mirvish wins round in ongoing court battle
Judge removes developer Harry Stinson from further role in King Street West condo-hotel complex
TIMOTHY APPLEBY
August 25, 2007
In a victory for theatre impresario David Mirvish, a judge has effectively removed developer Harry Stinson from any further role in the One King Street West condominium-hotel development, a glittering 51-storey landmark perched on one of Toronto's choicest pieces of real estate.
Declaring that "some stability must be introduced into this state of affairs on an urgent basis," Madam Justice Sarah Pepall of the Ontario Superior Court issued a ruling yesterday that places four Stinson-owned companies, including Stinson Hospitality Inc. and Dominion Club of Canada Corp., and their assets, in the hands of trustee and receiver Ira Smith.
The decision is the latest chapter in a long-running commercial dispute between Mr. Stinson and Mr. Mirvish. An April 20 agreement gave Mr. Stinson until the end of July to settle his $10.4-million debt - a compromise figure - with the Mirvish companies, the judge determined, but Mr. Stinson was unable to come up with the cash.
The decision fell short of what Mr. Mirvish had sought, which was the transfer to himself of the two companies' assets, now under scrutiny by Mr. Smith to ascertain whether any other creditors have valid claims.
Lawyer Joseph Latham, who was reporting Mr. Smith's conclusions on the two companies, told the court that both are insolvent and entangled in a number of complex transactions that still need to be sorted out.
Mr. Mirvish's lawyer, Patricia Conway, was nonetheless pleased at yesterday's outcome.
"I think it's a very well-reasoned, judicious decision," she said.
"In essence [the judge] was convinced that Mr. Stinson had defaulted in his obligations to Mr. Mirvish, and that Mr. Stinson should not be left in charge of this operation."
Neither Mr. Stinson nor his lawyer responded to requests for comment.
Comprising 575 units, the complex sits on land that was once home to the Nag's Head pub and a historic Dominion Bank building. In all, the property is estimated to be worth several hundred million dollars.
The ruling was the second setback in 10 days for Mr. Stinson.
Last week, a court placed in temporary receivership a company that owns a downtown parking lot on which he had hoped to build the tallest residential building in Toronto, a distinction now likely to be claimed by U.S. developer Donald Trump, who is planning a similar project of his own.
Brian Smith, vice-president of One King Street West's condominium corporation, was also content.
As part of the judgment, the condo owners will take part in negotiations on Monday afternoon to sort out unresolved details.
"The decision is not quite in the form Mr. Mirvish wanted," Mr. Smith said. But what's chiefly sought by the owners, he said, is "stability and profitability" and a less complicated ownership structure than has prevailed since the building opened in August, 2005.
Of the building's 500-plus unit holders, 425 condo owners participate in its hotel program, whereby Stinson Hospitality Inc., rents out the units on a temporary basis.
"The hotel business is stable: There are sell-outs right now and bookings are solid - the hotel is in pretty good shape," Mr. Smith said.
Mr. Latham told the court earlier in the week that while DCC reported an operating profit of almost $25,000 on revenues of $1.9-million in the first six months of this year, it had also lost $604,000 in depreciation, property taxes and unpaid interest on a mortgage with Mr. Mirvish.
Similarly, he reported that Mr. Stinson had received $1.35-million in financing from a company called Segura Investments Ltd., which was not represented at the hearing, and had transferred $700,000 of the debt to Stinson Holdings.
AoD
LEGAL PROCEEDINGS
Mirvish wins round in ongoing court battle
Judge removes developer Harry Stinson from further role in King Street West condo-hotel complex
TIMOTHY APPLEBY
August 25, 2007
In a victory for theatre impresario David Mirvish, a judge has effectively removed developer Harry Stinson from any further role in the One King Street West condominium-hotel development, a glittering 51-storey landmark perched on one of Toronto's choicest pieces of real estate.
Declaring that "some stability must be introduced into this state of affairs on an urgent basis," Madam Justice Sarah Pepall of the Ontario Superior Court issued a ruling yesterday that places four Stinson-owned companies, including Stinson Hospitality Inc. and Dominion Club of Canada Corp., and their assets, in the hands of trustee and receiver Ira Smith.
The decision is the latest chapter in a long-running commercial dispute between Mr. Stinson and Mr. Mirvish. An April 20 agreement gave Mr. Stinson until the end of July to settle his $10.4-million debt - a compromise figure - with the Mirvish companies, the judge determined, but Mr. Stinson was unable to come up with the cash.
The decision fell short of what Mr. Mirvish had sought, which was the transfer to himself of the two companies' assets, now under scrutiny by Mr. Smith to ascertain whether any other creditors have valid claims.
Lawyer Joseph Latham, who was reporting Mr. Smith's conclusions on the two companies, told the court that both are insolvent and entangled in a number of complex transactions that still need to be sorted out.
Mr. Mirvish's lawyer, Patricia Conway, was nonetheless pleased at yesterday's outcome.
"I think it's a very well-reasoned, judicious decision," she said.
"In essence [the judge] was convinced that Mr. Stinson had defaulted in his obligations to Mr. Mirvish, and that Mr. Stinson should not be left in charge of this operation."
Neither Mr. Stinson nor his lawyer responded to requests for comment.
Comprising 575 units, the complex sits on land that was once home to the Nag's Head pub and a historic Dominion Bank building. In all, the property is estimated to be worth several hundred million dollars.
The ruling was the second setback in 10 days for Mr. Stinson.
Last week, a court placed in temporary receivership a company that owns a downtown parking lot on which he had hoped to build the tallest residential building in Toronto, a distinction now likely to be claimed by U.S. developer Donald Trump, who is planning a similar project of his own.
Brian Smith, vice-president of One King Street West's condominium corporation, was also content.
As part of the judgment, the condo owners will take part in negotiations on Monday afternoon to sort out unresolved details.
"The decision is not quite in the form Mr. Mirvish wanted," Mr. Smith said. But what's chiefly sought by the owners, he said, is "stability and profitability" and a less complicated ownership structure than has prevailed since the building opened in August, 2005.
Of the building's 500-plus unit holders, 425 condo owners participate in its hotel program, whereby Stinson Hospitality Inc., rents out the units on a temporary basis.
"The hotel business is stable: There are sell-outs right now and bookings are solid - the hotel is in pretty good shape," Mr. Smith said.
Mr. Latham told the court earlier in the week that while DCC reported an operating profit of almost $25,000 on revenues of $1.9-million in the first six months of this year, it had also lost $604,000 in depreciation, property taxes and unpaid interest on a mortgage with Mr. Mirvish.
Similarly, he reported that Mr. Stinson had received $1.35-million in financing from a company called Segura Investments Ltd., which was not represented at the hearing, and had transferred $700,000 of the debt to Stinson Holdings.
AoD
AlvinofDiaspar
Moderator
And another from the Toronto Section of the Globe, on the individual investors:
REAL ESTATE: STINSON'S TOWER OF DREAMS
Sapphire? These days, investors feel blue
DEIRDRE KELLY
August 25, 2007
David Bergart paid nearly $400,000 for four units in Sapphire Tower, the condo/hotel that controversial Toronto developer Harry Stinson meant to build on a parking lot near Bay and Richmond.
But it wasn't a typical deal. Instead of putting down a deposit, as is the norm when buying a condo from blueprints, the Thornhill, Ont., environmental technologist paid in full for his one-bedroom units in what was once touted as Canada's tallest residential skyscraper.
To early investors like him, Mr. Stinson made an irresistible offer. "If we invested in multiple units, we'd get 50 cents on the going sales rate, meaning if the units were selling for $100,000 we got them for $50,000," explains Mr. Bergart, 57, over a recent lunch at a Chinese restaurant. "I thought it was a terrific deal."
As did 19 others collectively known as the Special Investors Group. A diverse mix of Canadians and foreigners, some from as far away as the Cayman Islands and Florida, they range in age from 30 to retirement age - doctors, lawyers and other professionals, some of whom took out loans or spent their life's savings to get in on Sapphire Tower. And now, they may lose their money.
Since July 20, Sapphire Tower Development Corp., saddled with a nearly $28-million debt, is being restructured under the Companies' Creditors Arrangement Act. It is not clear whether the Special Investors will ever see a dime. Most are now in shock over what they thought was a solid investment, but that over the last few weeks has begun to look as risky as junk bonds.Mr. Bergart is not alone among the investors in expressing guilt, embarrassment and anger toward Mr. Stinson.
"I wasn't investing in the stock market; I was investing in bricks," says another investor, a University of Toronto professor in his late 40s. He is out $1.2-million. "I have always avoided speculative investing. ... I'm in it for the long run and not the quick return. Real estate is that kind of investment. I have a family. This was supposed to be for them."
"People sold their own properties to buy into this venture," adds Mr. Bergart. "And I think they're also hurting greatly. No one could not be hurt about that kind of money. These are doctors, lawyers, professionals. They don't want their lives in the newspaper so that their neighbours can say, 'What? Are you a dummy?'"
Mr. Bergart, on the other hand, is not afraid to show his investing face in public. He is generally calm and collected, even in the face of losing $400,000 after buying a promissory note from Mr. Stinson personally and his companies, which would be exchanged for actual condo units when the project was finished. As the group's self-appointed spokesman, he sums up why many like him got involved in Mr. Stinson's unconventional condo with its equally unconventional financing schemes: "He's got an impressive track record," observes Mr. Bergart. "His property at 1 King West is one of the best hotels for room rates and percentage of bookings in the city."
Still, Mr. Bergart's deal was very different from a typical residential real estate investment. "I'm frankly surprised that people have put this much money down against plans, but there was obviously a lot of interest in the project," observes the Sapphire Tower receiver, BDO Dunwoody president Uwe Manski.
Real estate agent Brad Lamb, whose agency handles many new-construction condominiums that draw small investors, is less charitable. "These people thought they were getting something for nothing," he says of Mr. Bergart's group. "But they knew what they were doing. They were putting a large amount of money down in order to get a discounted price on units, and in return Harry got to use their cash.
"If their money was in trust in the first place, as is usually the case when you buy an apartment - meaning the builder can't touch that money - then they wouldn't have lost a dime. If consumers don't follow the rules, then I'm sorry, you deserve what you get."
Even Mr. Stinson believes that the investors knew they might be in for a ride. "I think there is something to be said that a high return implies a high risk," says Mr. Stinson. "But you can't throw that back in their face. You can't say you don't care."
In fact, Mr. Stinson says that he is deeply concerned for his investors. That is why, he adds, he recently turned down a $21-million offer on his property from Toronto developer Murray Goldman, because it would have meant a shortfall, and a shortfall would be shouldered by none other than his "third tier" of investors. "I can relate to them," he says. "I'm in the same position. I'm behind them. I'm even further along. If I'm going to sell the property, I obviously don't want to take out money first."
The project is now in the hands of a court-appointed receiver entrusted with trying to get the best possible price for its assets. The arrangement creates aranking of creditors against the company, and the Special Investors - whose cash got Mr. Stinson's project started - are not at the top of the list. In fact, "they are the ones in the weakest position because they don't have a mortgage registered," observes Mr. Manski. "They are the last in line." According to Mr. Manski, the project is carrying an accumulated debt of between $27-million and $28-million.
And it's one recent move by Mr. Stinson, Mr. Bergart says, that has him and his fellow investors "infuriated." According to Mr. Manski, in the last six months, Mr. Stinson has registered two mortgages totalling $525,000 on the Sapphire Tower property in the name of his lawyer, Arthur Jacques. Mr. Stinson is adamant that the mortgages reflect Mr. Jacques's services around the project's planning and refinancing, but they also mean that Mr. Jacques will be paid before the Special Investors. Mr. Bergart asked Mr. Stinson to equally guarantee the debts of his group, and was refused.
But, Mr. Stinson counters, he had no other option: "How do I pay my lawyer, given that I don't have any money? From the property."
Mr. Stinson has reluctantly given up control of Sapphire Tower, citing his ongoing legal problems at 1 King West as the main reason. (Since April, theatre and art impresario David Mirvish has been publicly fighting Mr. Stinson for return of a $12-million loan after Mr. Stinson was granted protection from his creditors. The battle escalated this week when their respective lawyers took to the courts to argue Mr. Mirvish's motion to have Mr. Stinson removed from 1 King West and have a receiver appointed to take over.)
Interest costs and their own legal fees notwithstanding, Mr. Bergart and his fellow investors are owed at least their investments totalling $7-million.
Sapphire Tower has gone through a series of changes since they first invested. It began as an 81-storey building, modelled on the hybrid condo-hotel at 1 King West. But after several changes - and objections that it would cast a shadow on nearby Nathan Phillips Square - Mr. Stinson's plan shrank to a more sedate 62 storeys, and a mixture of small and family-size units, some as large as four bedrooms. "Still, it is a beautiful building," says Mr. Bergart. "It should be built. But, that said, no one who went into this project thought that it would be anything but built. All of us did due diligence before we invested."
Mr. Stinson says the result will be unhappy for him as well. "In this case there won't be any money for me. Even if there is a bit of profit, it will go to them. It didn't work out this time."
Mr. Bergart reacts with raised eyebrows when he hears of Mr. Stinson's apparent concern for his financial well-being. He bites into a fortune cookie, looks at the paper hidden inside and laughs. It reads: Be prepared for the truth.
"You want to know the truth?" he asks. "If he had been a first-time developer, I would have been extremely more cautious. He had, as I said, a track record. I think some investors think he's underhanded. But they haven't talked to him as much as I have. I think he's as honest as a person can be - in business."
AoD
REAL ESTATE: STINSON'S TOWER OF DREAMS
Sapphire? These days, investors feel blue
DEIRDRE KELLY
August 25, 2007
David Bergart paid nearly $400,000 for four units in Sapphire Tower, the condo/hotel that controversial Toronto developer Harry Stinson meant to build on a parking lot near Bay and Richmond.
But it wasn't a typical deal. Instead of putting down a deposit, as is the norm when buying a condo from blueprints, the Thornhill, Ont., environmental technologist paid in full for his one-bedroom units in what was once touted as Canada's tallest residential skyscraper.
To early investors like him, Mr. Stinson made an irresistible offer. "If we invested in multiple units, we'd get 50 cents on the going sales rate, meaning if the units were selling for $100,000 we got them for $50,000," explains Mr. Bergart, 57, over a recent lunch at a Chinese restaurant. "I thought it was a terrific deal."
As did 19 others collectively known as the Special Investors Group. A diverse mix of Canadians and foreigners, some from as far away as the Cayman Islands and Florida, they range in age from 30 to retirement age - doctors, lawyers and other professionals, some of whom took out loans or spent their life's savings to get in on Sapphire Tower. And now, they may lose their money.
Since July 20, Sapphire Tower Development Corp., saddled with a nearly $28-million debt, is being restructured under the Companies' Creditors Arrangement Act. It is not clear whether the Special Investors will ever see a dime. Most are now in shock over what they thought was a solid investment, but that over the last few weeks has begun to look as risky as junk bonds.Mr. Bergart is not alone among the investors in expressing guilt, embarrassment and anger toward Mr. Stinson.
"I wasn't investing in the stock market; I was investing in bricks," says another investor, a University of Toronto professor in his late 40s. He is out $1.2-million. "I have always avoided speculative investing. ... I'm in it for the long run and not the quick return. Real estate is that kind of investment. I have a family. This was supposed to be for them."
"People sold their own properties to buy into this venture," adds Mr. Bergart. "And I think they're also hurting greatly. No one could not be hurt about that kind of money. These are doctors, lawyers, professionals. They don't want their lives in the newspaper so that their neighbours can say, 'What? Are you a dummy?'"
Mr. Bergart, on the other hand, is not afraid to show his investing face in public. He is generally calm and collected, even in the face of losing $400,000 after buying a promissory note from Mr. Stinson personally and his companies, which would be exchanged for actual condo units when the project was finished. As the group's self-appointed spokesman, he sums up why many like him got involved in Mr. Stinson's unconventional condo with its equally unconventional financing schemes: "He's got an impressive track record," observes Mr. Bergart. "His property at 1 King West is one of the best hotels for room rates and percentage of bookings in the city."
Still, Mr. Bergart's deal was very different from a typical residential real estate investment. "I'm frankly surprised that people have put this much money down against plans, but there was obviously a lot of interest in the project," observes the Sapphire Tower receiver, BDO Dunwoody president Uwe Manski.
Real estate agent Brad Lamb, whose agency handles many new-construction condominiums that draw small investors, is less charitable. "These people thought they were getting something for nothing," he says of Mr. Bergart's group. "But they knew what they were doing. They were putting a large amount of money down in order to get a discounted price on units, and in return Harry got to use their cash.
"If their money was in trust in the first place, as is usually the case when you buy an apartment - meaning the builder can't touch that money - then they wouldn't have lost a dime. If consumers don't follow the rules, then I'm sorry, you deserve what you get."
Even Mr. Stinson believes that the investors knew they might be in for a ride. "I think there is something to be said that a high return implies a high risk," says Mr. Stinson. "But you can't throw that back in their face. You can't say you don't care."
In fact, Mr. Stinson says that he is deeply concerned for his investors. That is why, he adds, he recently turned down a $21-million offer on his property from Toronto developer Murray Goldman, because it would have meant a shortfall, and a shortfall would be shouldered by none other than his "third tier" of investors. "I can relate to them," he says. "I'm in the same position. I'm behind them. I'm even further along. If I'm going to sell the property, I obviously don't want to take out money first."
The project is now in the hands of a court-appointed receiver entrusted with trying to get the best possible price for its assets. The arrangement creates aranking of creditors against the company, and the Special Investors - whose cash got Mr. Stinson's project started - are not at the top of the list. In fact, "they are the ones in the weakest position because they don't have a mortgage registered," observes Mr. Manski. "They are the last in line." According to Mr. Manski, the project is carrying an accumulated debt of between $27-million and $28-million.
And it's one recent move by Mr. Stinson, Mr. Bergart says, that has him and his fellow investors "infuriated." According to Mr. Manski, in the last six months, Mr. Stinson has registered two mortgages totalling $525,000 on the Sapphire Tower property in the name of his lawyer, Arthur Jacques. Mr. Stinson is adamant that the mortgages reflect Mr. Jacques's services around the project's planning and refinancing, but they also mean that Mr. Jacques will be paid before the Special Investors. Mr. Bergart asked Mr. Stinson to equally guarantee the debts of his group, and was refused.
But, Mr. Stinson counters, he had no other option: "How do I pay my lawyer, given that I don't have any money? From the property."
Mr. Stinson has reluctantly given up control of Sapphire Tower, citing his ongoing legal problems at 1 King West as the main reason. (Since April, theatre and art impresario David Mirvish has been publicly fighting Mr. Stinson for return of a $12-million loan after Mr. Stinson was granted protection from his creditors. The battle escalated this week when their respective lawyers took to the courts to argue Mr. Mirvish's motion to have Mr. Stinson removed from 1 King West and have a receiver appointed to take over.)
Interest costs and their own legal fees notwithstanding, Mr. Bergart and his fellow investors are owed at least their investments totalling $7-million.
Sapphire Tower has gone through a series of changes since they first invested. It began as an 81-storey building, modelled on the hybrid condo-hotel at 1 King West. But after several changes - and objections that it would cast a shadow on nearby Nathan Phillips Square - Mr. Stinson's plan shrank to a more sedate 62 storeys, and a mixture of small and family-size units, some as large as four bedrooms. "Still, it is a beautiful building," says Mr. Bergart. "It should be built. But, that said, no one who went into this project thought that it would be anything but built. All of us did due diligence before we invested."
Mr. Stinson says the result will be unhappy for him as well. "In this case there won't be any money for me. Even if there is a bit of profit, it will go to them. It didn't work out this time."
Mr. Bergart reacts with raised eyebrows when he hears of Mr. Stinson's apparent concern for his financial well-being. He bites into a fortune cookie, looks at the paper hidden inside and laughs. It reads: Be prepared for the truth.
"You want to know the truth?" he asks. "If he had been a first-time developer, I would have been extremely more cautious. He had, as I said, a track record. I think some investors think he's underhanded. But they haven't talked to him as much as I have. I think he's as honest as a person can be - in business."
AoD
rbt
Senior Member
I like this paragraph. How can investing in something that doesn't exist, the potential of a company to produce product (bricks), not be speculative?
Real-estate that does not exist is not a "brick and mortar" type investment primarily because there is no actual brick or mortar yet.
Blovertis
Active Member
I really feel sorry for those investors, but anyone who had been following Harry for the last few years should have realized this was a questionable venture -- starting with his bedraggled appearance and moving from there to his cheesy, sub-literate marketing, his unrealistic promised returns, and the fact that One King would not have happened had Mirvisch not stepped in.
The reason that Harry has been the subject of so much negative commentary in this forum and elsewhere is not because anyone despises ambition or iconoclasm, but because it is fascinating to see someone so obviously in-over-his-head be taken seriously by so many for so long.
The reason that Harry has been the subject of so much negative commentary in this forum and elsewhere is not because anyone despises ambition or iconoclasm, but because it is fascinating to see someone so obviously in-over-his-head be taken seriously by so many for so long.
JasonParis
Moderator
Glad to see Stinson finally out of 1 King West. I look forward to that place being marketed far more professionally and probably fixed-up a bit. Maybe in a year or so it'll finally be a complex we can feel a bit of pride about.
poppajojo
Active Member
I think that's the worst possible fortune cookie outcome he could've gotten considering they're usually so positive.
DTGeek
Active Member
There are two famous observations about people that seem to be at work here.
1) It's difficult to tell the difference between a genius and an idiot.
2) A sucker is born every minute.
Stinson was the idiot, and the investors were the suckers who somehow thought he was a genius. I was always pretty surprised when I heard that, because I don't think I've ever met a genius who would repeatedly produce marketing with flagrant spelling and grammatical errors. And that is but one example of an overall lack of professionalism that belied any illusions of genius. (I'm not talking about his much maligned appearance either, I live in Silicon Valley where there are plenty of CEOs who come across as professional and intelligent while wearing jeans and t-shirts to work...)
It's a bit of a sad story all-around. I find it hard to criticize Stinson too much, because he may be stupid, but at least he is honest. Meanwhile, there are millions of businessmen who enjoy exploiting suckers just for their own personal gain. They're the ones who deserve Stinsons fate.
1) It's difficult to tell the difference between a genius and an idiot.
2) A sucker is born every minute.
Stinson was the idiot, and the investors were the suckers who somehow thought he was a genius. I was always pretty surprised when I heard that, because I don't think I've ever met a genius who would repeatedly produce marketing with flagrant spelling and grammatical errors. And that is but one example of an overall lack of professionalism that belied any illusions of genius. (I'm not talking about his much maligned appearance either, I live in Silicon Valley where there are plenty of CEOs who come across as professional and intelligent while wearing jeans and t-shirts to work...)
It's a bit of a sad story all-around. I find it hard to criticize Stinson too much, because he may be stupid, but at least he is honest. Meanwhile, there are millions of businessmen who enjoy exploiting suckers just for their own personal gain. They're the ones who deserve Stinsons fate.
GovernorARNOLD
New Member
Stinson sucide watch?
elook
New Member
It'd be five or six years before he finally gets it done. I'd be more concerned about some of the people he convinced to hand him hundreds of thousands for what in the end amounts to a big fat pile of nothing.
What I can't understand is why the president of the 1 King condo board is so friggin' attached to Harry. If I was the board, I'd saying good riddance and welcoming who ever came along. Ridding 1 King of Stinson was like cutting away a cancer - had to be done, and now the building has a chance to become a money-maker for those involved.
Sadly, for those who got suckered in, this story is far from over and Stinson's troubles are just beginning.
syn
Senior Member
Is he honest? It seems dishonesty is one of the things that's been getting him into trouble.
GovernorARNOLD
New Member
so will Stinson have go to jail at the end of all this?