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First-of-its-kind condo deal has been mired in financial
troubles
Metrolinx walked away from partnership with developer
CBC News
Sarah Bridge, John Lancaster
10 April 2014
Sarah Bridge/CBC
Shovels are in the ground for a new west-end development that was
heralded as the first condominium project to be linked to a Toronto GO
station.
It resembles many other construction sites around the city now but it
began as possible model for planning of the future — planning that
connects the public and private sectors and provides intensification in
older communities like Mimico.
It hasn't turned out that way.
A CBC News investigation reveals that a key partner bailed on the deal
and the project has been mired in lawsuits and financial troubles.
The proposed condominium — called "On the GO Mimico" — on Royal York
Road was originally supposed to share space with the neighbouring
Mimico GO Transit station.
City Council rezoned the land so that a condo tower could go up. In
exchange, the developer had agreed to build 141 underground parking
spots for GO commuters. The proposal was part of a key Metrolinx goal
to foster private sector development on transit hubs. On the GO Mimico
has received support from city council and from the local councillor,
Mark Grimes, who appeared in an online video with the developer.
Coun. Grimes told CBC News he supported the development because it
included contributions toward a park and heritage building and because
it proposed density at a transit location.
continues to advertise that the planned tower will be
"directly connected" to the GO system.
The developer continues to advertise that the planned tower will be
"directly connected" to the GO system. But any official link to GO was
severed in 2012 after the developer used the land to secure millions of
dollars in mortgages and, according to a credit union, allegedly
defaulted on the loans.
The developer, Louie Santaguida, told CBC News he owns the land. But
the financial complications were enough to cause Metrolinx to back out.
Metrolinx told CBC News the deal dated back to 2008, when the transit
authority signed a memorandum of understanding with Santaguida's
company, Terrasan, which owned the property at 327 Royal York Rd., next
to the Mimico GO Station.
But in 2011, three companies associated with Santaguida went bankrupt
with millions of dollars in liabilities. That caused Brantford City
Council to walk away from an agreement that would have seen Terrasan
take on a big industrial redevelopment in that city.
Santaguida said that the bankruptcies don't affect the property at 327
Royal York Rd. He wrote in an email, "None of those companies had an
interest in the Mimico project, and the bankruptcies do not impact any
of our current developments, including On the Go Mimico."
Metrolinx said they backed away from the deal to partner with Terrasan
in 2012. A spokesperson said that "some information had come to our
attention that made this a less than desirable agreement to enter so we
pulled out of that agreement [that year]."
The transit authority is still looking for private partners to build on
GO transit hubs, a key part of its Five Year Strategy. But the
spokesperson said the collapse of this first deal was a disappointment.
"I don't believe we've lost hope, though, with finding another
agreement that we could reach with another developer perhaps."
The connection to a transit hub was a part of the Mimico project Coun.
Grimes had highlighted when he urged the city to move forward with the
plan.
In a 2012 letter, Coun. Grimes had asked the city's Committee of
Adjustment to approve the developer's application to add extra storeys
to the planned tower.
"The need for increased parking at the GO station is pressing and our
desire is for the project to progress as soon as possible," he wrote.
A year later, after the deal with Metrolinx fell apart, Coun. Grimes
wrote again to the committee, this time to encourage members to approve
the removal of the 141 parking spaces for transit riders that had been
part of the original plan. He wrote that the changes "will not
adversely impact the surrounding community."
When asked about the letters, Coun. Grimes said in an email, "It is my
understanding that Metrolinx chose not to pursue the partnership
because they were moving forward with their own expansion plans for the
GO station, including the addition of more parking spaces."
Metrolinx has confirmed that it made its own plans to renovate the
station and build extra parking spaces after the deal with Terrasan
ended. Those publicly-funded upgrades are expected to be ready in 2018.
As for the property next door, the Committee of Adjustment refused the
proposed changes to the condominium project, but the Ontario Municipal
Board (OMB) later ruled that Terrasan could go ahead without the extra
parking spaces.
Losing Metrolinx wasn't the end of the company's problems. In 2013, a
contracting service, Petrosan Contracting Ltd., filed a lawsuit against
Terrasan, alleging it hadn't been paid for preliminary work and
materials provided to the developer in relation to the Royal York Road
property.
Santaguida said those obligations "were satisfied in February 2013." He
also said that the condominium is over 75 per cent sold.
Originally slated to have 20 storeys, On the GO Mimico is now approved
as a 27-storey tower.
a developer's reputation "is important, but not technically an issue"
CBC News asked the city whether a developer's track record can affect
the approval process. In an email city planner Gregg Lintern said that
a developer's reputation "is important, but not technically an issue"
that City Planning uses to vet development applications.
Coun. Grimes said he supported the Mimico development based on its
planning merits. "The development was consistent with the City's
Official Plan, and with the Province's Policy Statement and Growth
Plans," he said.
Coun. Grimes appears in a video posted to YouTube last year, discussing
the On the GO Mimico project. "We're on the platform of a GO station.
So, out your back door you walk one minute to the platform," he said in
the video. "So, people who don't have a car, this is the place you want
to buy."
Coun. Grimes spoke, he said, not knowing he was being filmed for
promotional purposes and said it was edited and used without his
knowledge or consent. He told CBC News that the video "was shot at the
groundbreaking event, where many media outlets were present."
He continued, "At no time did I intend to, or actually advocate that
someone should purchase anything."
By attending the groundbreaking, he said, "I was helping to promote
development in ward 6, not the developer."
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More than 200 condo buyers may lose homes after development fails
On the Go Mimico development was heralded by politicians, planners as first of its kind
CBC News
11 April 2016
Construction has ground to a halt as the condo project was placed into receivership (John Lancaster/CBC)
About 200 people who bought condo units in an Etobicoke high-rise
project may lose their homes after the development was placed into
court-ordered receivership due to massive financial problems.
The project, still only about 15 per cent complete six years after it
was first marketed to potential buyers, will now be sold off by the
receiver in a bidding process.
The buyers who paid for the pre-sold condos — 208 of the project's 242
units — will get their combined $6.3 million in deposits back. But the
condos they bought and waited years to move into will likely be sold
off at much higher current market values by whomever steps in to
complete the project.
Some of the original buyers had purchased their units as far back as
2011 when Toronto home prices were about half of what they are today.
Development's collapse financially 'devastating' to many buyers
Toronto condo lawyer Denise Lash says many of those buyers may now find themselves priced out of the market.
"It can be devastating" she told CBC Toronto, adding if they want to
buy their units from the new developer, it's likely "they have to
purchase at 2017 prices, not the prices they paid [years earlier]."
Nash says while "it's rare" for condo projects to fail in Toronto's
red-hot housing market, buyers should always "research the developer.
There are resources ... do your due diligence when you're buying."
The project, proposed by Terrasan 327 Royal York and marketed through
its sister company Stanton Renaissance, is located on Royal York Road
adjacent to the Mimico GO station. Both Terrasan and Stanton
Renaissance are owned by Toronto resident Louie Santaguida.
Aptly named On the Go Mimico, buyers were promised 27 storeys of
luxuriously finished condo units with retail space on the main level.
It was supposed to be the first condo building of its kind in Toronto
with direct access to a Metrolinx station. Stanton Renaissance also
promised buyers a "commitment to sustainable urban dvelopment."
But almost immediately there were problems. In 2012, Metrolinx backed
away from the deal to partner with the developer. The regional transit
agency's spokesperson, Anne Marie Aikins, told CBC Toronto that "some
information had come to our attention that made this a less than
desirable agreement to enter so we pulled out of that agreement [that
year]."
By 2013, soon after excavation of the site began, crews walked off the job claiming they weren't being paid by the developer.
Developer had never built condos before, had history of corporate bankruptcies
Santaguida's other business ventures had a troubled history of
bankruptcies leaving creditors on the hook for millions of dollars in
unpaid bills. The financial issues prompted Brantford city council to
walk away from an agreement that would have seen one of Santaguida's
companies take on a big industrial redevelopment in that city.
Stanton Renaissance had never built a condominium or a residential
tower anywhere before the company applied to the city of Toronto to
build and sell its condos to hundreds of potential buyers.
City councillors rezoned the land for the developer and staff issued
the various building permits needed to move the project forward.
In an email to CBC Toronto, city spokesperson Bruce Hawkins wrote, "the
City cannot refuse to accept applications or issue approvals (including
both planning approval and building permits) on the basis of past
history of the applicant/developer/owner, or based on an evaluation of
the financial stability of the applicant/developer/owner."
Local councillor big booster of the condo project
The local councillor, Mark Grimes, who represents Ward 6,
Etobicoke-Lakeshore, was a vocal proponent of the project. Grimes
supported the developer's application to increase the height and number
of units beyond what was permitted in the original proposal.
Grimes appeared in a promotional video for the project. While two other
councillors were seen in the video, they didn't speak. Grimes, however,
appeared to be wearing a wireless microphone under his golf shirt as he
answerrf questions about the project.
"We're on the platform of a GO station. So, out your back door you walk
one minute to the platform," he said in the video. "So, people who
don't have a car, this is the place you want to buy."
In 2015, when CBC Toronto first outlined growing financial problems at
the project, Grimes said he didn't know he was being filmed for
promotional purposes. He also said the video was edited and used
without his knowledge or consent.
Coun. Mark Grimes was a vocal proponent of the project and appeared in a promotional video for the condo complex. (CBC)
Monday, in an email exchange with CBC Toronto, Grimes said he was not
aware of the developer's previous financial history and that he feels
"terrible for anyone who may lose their purchasing opportunity. It is
very unfortunate that this happens quite often in the city."
He also added. "What's to say the market doesn't crash tomorrow and the buyers are better off than prior to the bankruptcy?"
Court documents allege the developer started defaulting on payments
just months after being loaned $21 million in construction money last
year. The documents also allege Santaguida directed more than $2
million earmarked for the project to other uses.
Land registry records show trades companies have put more than $5
million in liens on the project, claiming the developer hasn't paid
them for work completed. The tower is only about 10-15 per cent done.
according to documents filed by the court-appointed receiver.
On the Go Mimico sales office is shuttered. (John Lancaster/CBC)
Local community groups are also affected by the financial collapse of the condo project.
The city allowed Stanton Renaissance to use a historic train station
located in a public park across the street from the construction site
as a sales centre for more than two years.
In return, Stanton Renaissance agreed to restore to the building.
Community groups say the developer has left the building looking like a
modern condo sales office, not a historic train station as they
believed was promised.
Stanton Renaissance's website boasts plans to build three more condo projects in Toronto and Hamilton.
CBC Toronto reached out to Santaguida through Stanton Renaissance, but did not receive a reply.
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