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The One is the most ambitious mixed-use condominium building ever to have broken ground in Canada. Now standing about 55 storeys in the air above Bloor and Yonge streets, it's heading to 85 storeys — or 91 — depending upon how far ambitions prevail. The eventual height and much more are dependant upon on how events unfold over the coming weeks as the company making decisions for the project — receivers Alvarez and Marsal — have made two moves of late: Mizrahi Developments will no longer be the general contractor as of March 13, 2023, and at the same time, new ownership for the project is being sought.
Why is all this happening, and what are the possible outcomes for the building? We'll take a look at what roles the various players have on The One, and the recent history that has lead to this point.
The developer of The One is Mizrahi Developments, of which Sam Mizrahi is the CEO and public face. The project is owned 50% by Mizrahi and 50% by Jenny Coco, CEO of the Coco Group, a developer that operates mostly in Southwestern Ontario, and who is also part owner of Green Infrastructure Partners, recently amalgamated from Coco Paving and several other infrastructure related companies. Mizrahi has built a number of luxury mid-rise condos in Toronto and Ottawa, while the Coco Group mostly concentrates on subdivision houses in near Windsor.
Since October, 2023, decision-making for the 50-50 owned development has been in the hands of Alvarez and Marsal, receivers brought in following "a governance impasse," as described by Mizrahi, between himself and Coco that threatened to derail further construction. There were concerns expressed by some at the time that for several reasons — most of which have generally affected all construction projects over the last few years — construction on the building, which is behind schedule and over budget, might stop. Both prior to the receivership and since, however, the subcontractors have been paid and are continuing to be paid, and the building has continued to rise.
Uniquely, while all subcontractors have been paid in accordance with the terms of the receivership that require Alvarez and Marsal to continue to pay bills just as had been done prior to the receivership, Mizrahi Developments has only been paid 80% of their monthly $5 million bill as General Contractor. Mizrahi has subsequently filed a lawsuit against Alvarez and Marsal to recoup the unpaid fees.
Now, four-and-a-half months into the receivership. Alvarez and Marsal have taken action to dismiss Mizrahi as the general contractor from the project and as of March 13, and are bringing in Skygrid as general contractors, at least for a period of 90 days. Skygrid bid approximately 16% less than what Mizrahi has been billing to coordinate construction of the unconventional project.
According to Alvarez and Marsal, their dismissal of Mizrahi as general contractor stems from disagreements they have had with Mizrahi regarding how to move forward with the construction of the project, and ultimately pricing. With approximately 40% of the residential units in the building remaining available for sale, the receiver engaged a Toronto real estate broker for their opinion on selling the remaining space. The broker suggested that redividing unsold floor-plates into 10 smaller units — most are currently planned as 2 or 4 expansive units — would be the way to go.
In that regard, Mizrahi Developments has released the following statement:
"After almost a decade of working on this landmark project, Mizrahi Developments is no longer the general contractor on The One in Toronto. The decision is based on a difference in vision. We pride ourselves on our commitment to high-quality, luxury projects, and we are not willing to compromise on this. We have built our reputation on exceeding customer expectations and our portfolio of developments reflect that."
At the same time, Alvarez and Marsal have begun shopping the project around. Skygrid's 90 day period as contractors is related to the hoped for sale, representing the time that Alvarez and Marsal believe the sales process may take, giving new owners the opportunity to select a long-term general contractor themselves.
All of the exterior cladding for the tower has already been bought and paid for, and delivered to a warehouse nearby where it awaits transport to the site for installation. Mizrahi believes completing the building in a way that matches the expectations of existing purchasers is the best way forward. Continuing to sell large suites, and to construct six additional storeys, zoning for which Mizrahi was able to secure from the City in 2023, was Mizrahi's aim for the project.
As Alvarez and Marsal do not share that vision, their engagement of Skygrid to manage construction could result in some changes to upper floors, but three months is a short time to get up-to-speed on the unconventional project and to affect change. It is possible, of course, that whoever buys The One from the current owners may not share the vision of the receivers, and a longer term change of direction is conceivable again.
Who might want to buy the project from Mizrahi and Coco? The most likely party is The One's senior lender, KEB Hana Bank of South Korea, who will be motivated to see their existing investment in the building pay back: if the building is not completed, no-one will see any returns.
UrbanToronto will continue to follow progress on this development, but in the meantime, you can learn more about it from our Database file, linked below. If you'd like, you can join in on the conversation in the associated Project Forum thread or leave a comment in the space provided on this page.
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