Toronto The Pemberton | 215.79m | 68s | Pemberton | a—A

I recommend reading the motion materials placed for public consumption by the receivership ( https://www.pwc.com/ca/en/services/insolvency-assignments/33-yorkville/motions.html).

Application Record Volume 2 of 2 page 66 summarizes what happened nicely. The developer outsourced construction for 40 years, up until 4 years ago. PWC's initial assessment shows project cost overruns and that the developer started moving costs between projects accelerating indebtedness.

Another excerpt from "application record - volume 1 of 2" page 100 :
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rbt said:
They get the money when they finish and big spending comes before that.
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I understand the way it works, i have been doing this since 1987 on a smaller scale, at 2k per sq ft, if they financed and managed this project properly there is a huge margin for profit when it's all said and done, in my opinion i think they robbing Peter to pay Paul, project finances should be kept separate from other projects.
 
Cresford can still wiggle itself out of this if they have someone with deep pockets that is willing to partner with them and pay off the existing lenders.
 
thaivic said:
Cresford can still wiggle itself out of this if they have someone with deep pockets that is willing to partner with them and pay off the existing lenders.
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A better solution would see them sell these projects to another developer.
 
thaivic said:
That would be a good solution for some of the creditors but i don't think it will be good for the people that have purchased at these projects.
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But given the creditors are senior and are in control of the process, the priority is repayment of the debt.
 
Three Toronto high-rise condo projects started by Cresford Developments in receivership

SHANE DINGMAN REAL ESTATE REPORTER

BCIMC is owed more than $320-million on the three projects. Its $3.6-billion construction mortgage portfolio is managed by QuadReal Finance LP. An affidavit from Dean Atkins, QuadReal executive vice-president and head of mortgage investments, in the 33 Yorkville filing provides a vivid narrative of the lender’s concerns.

Mr. Atkins’s affidavit claims QuadReal appointed PWC to do a review of 33 Yorkville’s budget, which found evidence of “inappropriate project contracting and accounting" and alleged attempts to hide cost overruns through the creation of two project ledgers. Construction subcontractors were allegedly told to divide their awarded contract into two parts: one that would be consistent with the lender-approved budget and a second invoice for the excess. Ledger “001” was sent to the project’s cost consultant Altus Group Ltd. Ledger “002,” with about $3-million in cost overruns, was allegedly hidden until PWC uncovered it.

Another way Cresford is alleged to have played down cost overruns was to offer contractors steep discounts on presale units as payment-in-kind for keeping overages off invoices. One alleged example Mr. Atkins describes saw a contractor agree to not bill a $500,000 overrun to 33 Yorkville’s budget, in return Cresford gave the contractor a $776,000 discount on a condominium unit.

None of the allegations have been proved in court.

The lenders now view the project as being in default of its obligations.

David Mann, chief financial officer of Cresford, in a responding affidavit expressed surprise at the speed of the push to receivership and claimed the coronavirus pandemic was responsible for some of the project delays, as some of the subcontractors at 33 Yorkville have suspended construction work. Mr. Mann said Cresford has a letter of intent from “an entity backed by a renowned Canadian entrepreneur” to buy the Yorkville site, enabling Cresford to repay its debts. Mr. Mann also described efforts to sell a number of Cresford-owned condo townhouses to raise about $10-million.

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“As a broker who sold units in some of these projects and also as a purchaser of a unit at 33 Yorkville, my concern (and that of everyone I know who has sold at this project or is an investor or both) is [whether] Cresford is going to be able to work out their situation,” said Rahim Suleman, a broker with HomeLife/Yorkland Real Estate Ltd., in an e-mail.

“Halo and 33 Yorkville are more than likely to be cancelled completely,” as they have not yet begun substantial construction, said Ms. Lierman, who tracks progress on dozens of condo projects in the Greater Toronto Area.
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www.theglobeandmail.com

Three Toronto high-rise condo projects started by Cresford Developments in receivership

As many as 1,800 presold units are in jeopardy as the court moves on Cresford towers
www.theglobeandmail.com www.theglobeandmail.com
 
Curious for those who may know the answer. If another developer decides tomorrow to carry on with this project, are the permits transferable to the new developer? If above ground permits are already issued for this site, then
construction could start up again, otherwise it could sit idle for weeks. The same may apply for YSL.
 
bmiller said:
Curious for those who may know the answer. If another developer decides tomorrow to carry on with this project, are the permits transferable to the new developer? If above ground permits are already issued for this site, then construction could start up again, otherwise it could sit idle for weeks. The same may apply for YSL.
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It doesn't matter as the owner didn't change (Cresford owned 100% of the company that was building 33 Yorkville; now they don't). Developers tend to setup a new corporation for each development for liability reasons but it's also convenient as it means they can sell the project without any interruptions.
 
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