The Vancouver Business Thread

[misher]

Originally Posted by fredinno

Robson St. was never upzoned, though.
also:

While it wasn't upzoned I think its development potential went up as people negotiated with the city and got big developers, so BC Assessment assessed the lots based on whats built next door. Similar to how assessments down Broadway have skyrocketed yet it hasn't been upzoned. Some lots near Broadway are seeing land values over $1800/sqft despite only having C-2 or C3-A Zoning.

[officedweller]

Yeah, I think lower Robson was upzoned with the West End Plan and there would still have been an impact on core Robson properties too, nevermind the overall craziness of the market boosting real estate value.

[whatnext]

Parq casino's owners have deferred another interest payment, thus ratings agencies jhave given them a credit rating of selective default. Wouldn't it be nice if you or I could just personally decide to defer interest payments when it didn't suit us?

Downtown Vancouver casino Parq Vancouver’s owner Parq Holdings L.P. has deferred, for a second time, an interest payment on its US$415 million project financing that dates back to 2014, an analyst who covers a minority investor in the resort told Business in Vancouver on May 2.

The result of not paying the interest by the April 30 deadline, said M Capital Partners Inc. research analyst Andrew Hood, is that S&P Global Ratings has “downgraded Parq Holdings to ‘selective default.’”

He said that he received that information from S&P Global Ratings, but no one at S&P Global was immediately available to speak with BIV to confirm the further downgrade and no press release has yet been issued by S&P Global.

S&P Global has access to non-public information on Parq Holdings, Hood explained.

S&P Global on April 15 substantially downgraded Parq Holdings’ credit rating to a dismal CCC, from B-. This additional downgrade would suggest severe concerns with the company’s ability to pay its debts.

BIV asked Parq Holdings for a second day if it would reveal to BIV for whether it has paid its debt payment, which is likely in the $30-million ballpark if it is the same as past quarterly debt payments...

https://biv.com/article/2019/05/parq-van...t-credit-rating-slides-selective-default

[misher]

Originally Posted by whatnext

Parq casino's owners have deferred another interest payment, thus ratings agencies jhave given them a credit rating of selective default. Wouldn't it be nice if you or I could just personally decide to defer interest payments when it didn't suit us?

Downtown Vancouver casino Parq Vancouver’s owner Parq Holdings L.P. has deferred, for a second time, an interest payment on its US$415 million project financing that dates back to 2014, an analyst who covers a minority investor in the resort told Business in Vancouver on May 2.

The result of not paying the interest by the April 30 deadline, said M Capital Partners Inc. research analyst Andrew Hood, is that S&P Global Ratings has “downgraded Parq Holdings to ‘selective default.’”

He said that he received that information from S&P Global Ratings, but no one at S&P Global was immediately available to speak with BIV to confirm the further downgrade and no press release has yet been issued by S&P Global.

S&P Global has access to non-public information on Parq Holdings, Hood explained.

S&P Global on April 15 substantially downgraded Parq Holdings’ credit rating to a dismal CCC, from B-. This additional downgrade would suggest severe concerns with the company’s ability to pay its debts.

BIV asked Parq Holdings for a second day if it would reveal to BIV for whether it has paid its debt payment, which is likely in the $30-million ballpark if it is the same as past quarterly debt payments...

https://biv.com/article/2019/05/parq-van...t-credit-rating-slides-selective-default

Banks are willing to negotiate if you can't make your mortgage payment. Private lenders generally do not. That's why we prefer people take out mortgages.

Your glee at a Canadian company having financial trouble is slightly nauseating.

[retro_orange]

I thought misher was supposed to be suspended for starting an racially charged thread on this forum? The thread was deleted but no repercussions, that is a serious issue.

[WarrenC12]

Originally Posted by retro_orange

I thought misher was supposed to be suspended for starting an racially charged thread on this forum? The thread was deleted but no repercussions, that is a serious issue.

He's an idiot, and moderation appears completely random on here.

As for Parq, I'm surprised it's doing so badly. The casino is always busy, I wonder how the rest of the complex is doing: restaurants, hotels, etc. The lack of a theater space is probably hurting them. I know lots of people from the valley that come downtown and spend a night when they go to an event. If they were going to shows right at Parq, staying in one of those properties would be a no-brainer.

[logan5]

I'm not super knowledgeable about business, but I presume if they shut it down, somebody else will swoop in. Since Parq (or whatever they're called) bore the brunt of all the start up costs, whoever takes over should have a much better go of it.

Only been in there a few times, but it's fun , and it's a nice looking place. Hope it continues one way or another.

[fredinno]

Originally Posted by misher

While it wasn't upzoned I think its development potential went up as people negotiated with the city and got big developers, so BC Assessment assessed the lots based on whats built next door. Similar to how assessments down Broadway have skyrocketed yet it hasn't been upzoned. Some lots near Broadway are seeing land values over $1800/sqft despite only having C-2 or C3-A Zoning.

Yeah, but Broadway is GOING to be upzoned. Robson already had the West End Plan, and is unlikely to be upzoned. I guess maybe it's just that Robson is the 'High Street' of Vancouver, but still. The decline of Robson is pretty much a pretty modern phenomenon that seems to be correlated with the RE bubble, so that adds to my hypothesis.

Originally Posted by WarrenC12

He's an idiot, and moderation appears completely random on here.

As for Parq, I'm surprised it's doing so badly. The casino is always busy, I wonder how the rest of the complex is doing: restaurants, hotels, etc. The lack of a theater space is probably hurting them. I know lots of people from the valley that come downtown and spend a night when they go to an event. If they were going to shows right at Parq, staying in one of those properties would be a no-brainer.

Parq is loaded with debt from construction, that's why it's doing so badly. But yeah, I do doubt the thing is going forever even if the company goes bankrupt.

[officedweller]

Yeah, it's the construction debt that is dragging it down - here's another quote from the BIV article:

The two-level, 72,000-square-foot casino has 600 slot machines and 75 game tables and is operationally profitable before debt-servicing costs are added in, said Hood.

He estimated annual revenue at Parq is in the $170-million range while expenses are in the $150-million range.

“You take out $112 million in interest and that then takes you negative, but operationally they are making money,” he said.

Operations are profitable despite a bout of bad publicity stemming from claims from Toronto rapper Drake last November that he was “profiled,” as well as despite various new anti-money laundering rules that the B.C. government has put in place. Casino operators, such as Great Canadian Gaming (TSX:GC), have cited those new rules in conference calls as being partly responsible for lower revenue.

https://biv.com/article/2019/05/parq-van...t-credit-rating-slides-selective-default

[WarrenC12]

Originally Posted by officedweller

Yeah, it's the construction debt that is dragging it down - here's another quote from the BIV article:


https://biv.com/article/2019/05/parq-van...t-credit-rating-slides-selective-default

Thanks for the article. If I'm the bank, I want to just keep them paying the minimum. This could be a situation where Parq is throwing their hands up and trying to get some debt renegotiated.

Casinos are recession proof. Unless you're Trump, anybody can make money running them.

[misher]

Originally Posted by WarrenC12

Thanks for the article. If I'm the bank, I want to just keep them paying the minimum. This could be a situation where Parq is throwing their hands up and trying to get some debt renegotiated.

Casinos are recession proof. Unless you're Trump, anybody can make money running them.

But not government proof.

[WarrenC12]

Originally Posted by misher

But not government proof.

By that you mean they have to obey laws and not commit crimes? How difficult.

[whatnext]

Originally Posted by WarrenC12

By that you mean they have to obey laws and not commit crimes? How difficult.

It's funny how some posters seem to be in favour of money laundering isn't it. Funny as in odd, not haha.

[misher]

Originally Posted by whatnext

It's funny how some posters seem to be in favour of money laundering isn't it. Funny as in odd, not haha.

Any evidence that increased casino regulations has reduced money laundering? Has the carbon tax or health tax done so? How about the increased property taxes? Government comes in many forms.

[Migrant_Coconut]

Originally Posted by misher

Any evidence that increased casino regulations has reduced money laundering? Has the carbon tax or health tax done so? How about the increased property taxes? Government comes in many forms.

Any evidence that increased casino regulations are killing Parq? An 11.8% profit margin is the opposite of catastrophic - S&P's companies average 8.5%.

EDIT: And what the hell does the carbon tax or health tax have to do with casinos or money laundering???

[WarrenC12]

Originally Posted by misher

Any evidence that increased casino regulations has reduced money laundering?

Yes.

Originally Posted by misher

Has the carbon tax or health tax done so?

Carbon taxes work, unless you take issue with Nobel winning economists. Health tax replaced the MSP fee, the most regressive tax we've had.

Originally Posted by misher

How about the increased property taxes? Government comes in many forms.

Yep, sales are way down, SFHs are down.

[whatnext]

Originally Posted by SpongeG

Canadian firm buys Grouse Mountain

CM (Canada) Asset Management Co. Ltd. buys tourist attraction

By Glen Korstrom | July 18, 2017, 11:02 a.m.

A Vancouver-based firm that is more than 60% Canadian owned has bought the North Vancouver tourist attraction Grouse Mountain Resort for an undisclosed amount after the mountain was marketed for $200 million, the resort announced July 18.

Longtime owner Grouse Mountain Resort and new owner GM Resorts Limited Partnership (GM Resorts) announced that there will be no changes to staff or management, and that the mountain will continue operations as usual.

Media reports that pre-empted the news had incorrectly named the new owner as China Minsheng Investment Group, and that group does have an investment in GM Resorts. The exact amount of Chinese investment in GM Resorts, however, is unclear.

GM Resorts Limited Partnership was established by CM (Canada) Asset Management Co., Ltd. (CM Canada), which is a Canadian investment and asset-management company that has more than 60% ownership by Canadian investors, according to a news release from the resort.

That release outlined the sale and said that China Minsheng Investment Group subsidiary CMIG International is CM Canada’s international investor.

...

https://www.biv.com/article/2017/7/canadian-firm-buys-grouse-mountain/

LOL, looks like the "Canadian" firm that bought Grouse Mountain has some problems. From the South China Morning Post:


When Kenny Zou appeared before Canadian media in 2017, he was adamant about the new buyer of Vancouver’s Grouse Mountain, the iconic ski hill that looms over the city, its floodlit slopes a gleaming beacon at night: CM (Canada) Asset Management was a “completely Canadian company through and through”.

Yes, Chinese investment giant China Mingsheng Investment Group (CMIG) was a 40 per cent minority shareholder – but it would be a “silent” investor, he pledged, stamping down on reports that Grouse was under Chinese management.

Laurence Liao Feng, CEO of CMIG International, is also the president of CM (Canada) Asset Management, the firm that bought Vancouver's iconic Grouse Mountain ski hill - in spite of claims that CMIG was a silent investor.

Zou, a director of CM Canada, was an unlikely frontman for the high-profile sale. Just three years earlier, the baby-faced businessman had been among classmates at USC Price, where he was known as Kang Yu Canning Zou, doing a masters in public policy.

Now he was the public face of a reported C$200 million (US$149.4 million) deal involving one of Vancouver’s most beloved assets, 500 hectares (1,235 acres) of prized freehold land, and a Chinese investment vehicle whose creation was ordered by Chinese Premier Li Keqiang himself.

Details of the private sale were never released, but recent company filings reveal CM Canada’s president to be Laurence Liao Feng, the CEO of CMIG International, the foreign investment arm of CMIG (Liao has previously been reported to be a director of CM Canada, along with Zou).
That raises questions about transparency at the wildly expansionist CMIG, just as it buckles under the weight of a debt crisis. It also raises questions about the level of scrutiny in Canada over deals like the Grouse purchase.
Defaults and debt stress at CMIG.

CMIG is in deep trouble. On April 19, the Financial Times reported that it had missed a key debt payment, triggering cross defaults on US$800 million in bonds.

The FT cited a Hong Kong stock exchange filing saying that a creditors’ committee had been established in China “to stabilise the current financial situation and maintain the ongoing business operations” at CMIG.

Before its debt chickens started coming home to roost, CMIG had been on a buying binge that recalled the wild antics of Anbang Insurance, the private company of mysterious provenance that at one stage boasted US$300 billion in global assets. Anbang’s boss, Wu Xiaohui, now serves an 18-year sentence for fraud and embezzlement, and the Chinese government has been selling off its properties in a gigantic fire sale.

Unlike Anbang, CMIG’s origins are no mystery, having been formed by dozens of patriotic tycoons at the request of Premier Li in 2014, with visions of turning it into China’s Blackrock, or JPMorgan. It scooped up foreign assets that included Nasdaq-listed Sirius International Insurance (US$2.2 billion), and prime real estate in London and Shanghai.
Anbang’s rise had an opaque political element – Wu was married to the granddaughter of late paramount leader Deng Xiaoping, and the firm boasted numerous other connections to the Communist Party elite.
CMIG’s political aspect is much more explicit, as stated on its website: “CMIG stands ready to follow the national ‘Going Global’ and ‘Belt and Road’ strategies, and play its due part in China’s industrial upgrading and transition to spearhead the ‘globalisation’ drive of private capital.”...

...It’s unlikely that the fate of Grouse Mountain is high on the list of priorities at CMIG, which (as of September) had US$46 billion in assets and, more to the point, a whopping US$34 billion in debt.
But its situation (and that of Anbang before it) offers lessons for Canada – and Vancouver in particular – about the failure to come to grips with the political exposure involved in some Chinese investment.....

https://www.scmp.com/news/world/united-s...-behind-vancouver-mountain-boss-troubled

[EastVanMark]

Originally Posted by WarrenC12

He's an idiot, and moderation appears completely random on here.

As for Parq, I'm surprised it's doing so badly. The casino is always busy, I wonder how the rest of the complex is doing: restaurants, hotels, etc. The lack of a theater space is probably hurting them. I know lots of people from the valley that come downtown and spend a night when they go to an event. If they were going to shows right at Parq, staying in one of those properties would be a no-brainer.

So you're saying that trying to squeeze a casino on a postage stamp sized property isn't the greatest of ideas.

If they built this thing across the street as part of a destination casino complex, it would be a different story. (or the Steve Wynn proposal that would have cost the province exactly $0 and would have been 5X as nice as the current version. )

But no, nimbyism, and short sighted business outlook took another opportunity away from Vancouver.

[WarrenC12]

Originally Posted by EastVanMark

So you're saying that trying to squeeze a casino on a postage stamp sized property isn't the greatest of ideas.

If they built this thing across the street as part of a destination casino complex, it would be a different story. (or the Steve Wynn proposal that would have cost the province exactly $0 and would have been 5X as nice as the current version. )

But no, nimbyism, and short sighted business outlook took another opportunity away from Vancouver.

Nope, didn't say anything like that. The new casino is great. It's the only place that even remotely reminds me of Vegas in Vancouver. You can see from the details that they are making good money, they just overextended on their construction debt. I can't believe you're blaming the city somehow.

The rest of the lower mainland casinos are lame.

[EastVanMark]

Originally Posted by WarrenC12

Nope, didn't say anything like that. The new casino is great. It's the only place that even remotely reminds me of Vegas in Vancouver. You can see from the details that they are making good money, they just overextended on their construction debt. I can't believe you're blaming the city somehow.

The rest of the lower mainland casinos are lame.

You better believe it, cause that's exactly what I'm doing.

Didn't mean to blame them alone however; the province also had a hand in the debacle.

If you are impressed by the current casino, you would have had a full on heart attack if some of the original proposals went through. You talk theatres? How about more than one. Hotel rooms? Over 1000 in the one proposal which would have been Vancouver's biggest. Plus A LOT more. Oh well.

And they JUST fell behind on their construction debt? That's a lot like saying, you bring in enough money for heat, food, and to keep the lights on in your home, but its JUST the mortgage you cant pay. Thats a pretty big problem. And btw even if you somehow remove the debt, those figures are still not that impressive considering you are the only player in the downtown area of a major city. Their are suburban casinos in the middle of nowhere in the States that do much better.