CALGARY | Arriva 42 | 535 FT / 163 M | 44 FLOORS | ON HOLD - Page 8

Bigtime · #**141** Posted **Apr 7, 2009, 1:17 PM**

Calgary condo tower on hold; developer seeks bankruptcy protection
'New financing' sought for 42-storey Arriva project

By Mario Toneguzzi And Kathy McCormick, Calgary Herald April 7, 2009 6:44 AM

A high-profile residential condominium tower near Stampede Park has been put on hold after the owner of the site recently filed for protection under the Companies' Creditors Arrangement Act.

Calgary developer John Torode told the Herald on Monday work has stopped on the 42-storey second tower of the Arriva condo project in the old Victoria Park neighbourhood which has about 60 per cent of its 221 units pre-sold.

"What we've done is put that limited partnership which is the owner of that site -- the second tower -- into CCAA (Companies' Creditors Arrangement Act)," said Torode, president of Torode Realty Advisors Ltd.

"What that does is gives us a chance to restructure the deal which would include finding new financing.The financing we had with the bank did not go well given the credit crunch and we think that we need to find alternative financing to proceed with the tower."

The Companies' Creditors Arrangement Act is a federal act that allows financially troubled corporations the opportunity to restructure their affairs. By allowing the company to restructure its financial affairs, through a formal Plan of Arrangement, the CCAA presents an opportunity for the company to avoid bankruptcy and allows the creditors to receive some form of payment for amounts owing to them by the company, according to PricewaterhouseCoopers.

Torode said it could take anywhere from one month to six months for the financial restructuring to take place.

The Arriva project includes a 34-storey tower that has been built and is close to sold out.Torode also recently announced that a planned third tower, which was to be another condo complex, would be a boutique hotel instead. A fourth tower that was part of the original plan was cancelled early in the development process.

The project is on a block between 12th Avenue S. E. and 11th Avenue S.E. and Olympic Way. At the construction site, small signs by Torode Construction Ltd., on the fence, say: "The Arriva 42 project is on-hold and this job site is secured and not operational."

Several condo projects in recent months have been delayed or cancelled in Calgary.

"There's been a number of projects stopped and I think many of them have to do with financing. We're no different," said Torode. "The financing market is difficult. We're committed to this project and we want to see it through to completion, but you can't do it without construction financing. So that's in a nutshell the bottom line."

Torode has a number of proposed projects for the Victoria Park area and Ramsay, but he said the filing under Companies' Creditors Arrangement Act is unrelated to the other projects. Each of those projects has its own investors and owners and they will each proceed or not proceed based on what decisions are made for those projects, he said.

But Torode also said: "Well, certainly we wouldn't start one of the other ones if this one's (Arriva) not going. This is sort of the key project. And you know phase one has turned out very well."

He said work has stopped on the project now. The tower is at grade on one side and close to grade on the other side.

"It's 20 per cent built, and we hope to finish building to grade -- and ideally, to build the whole tower," he said. "I will still be looking after the site because it is partially built, and all deposits received from buyers are insured."

"If credit markets loosen, we hope to get financing to build."

Recently it was reported that the City of Calgary is monitoring nine condo projects that have been halted due to the slowing economy. Eight of the nine sites are in the Beltline.

According to Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp., there were 7,039 condos under construction at the end of February in the Calgary census metropolitan area. That's down 12.6 per cent from a year ago when it was 8,052.

Louie said the number of condos under construction in the Calgary area is expected to continue to decline as more units are completed and the rate of starts slows down as well.

In February, the Altus Group Housing Report said new unsold condominiums are becoming a concern in the Calgary market. The report said most of the unsold units in Calgary are already completed or under construction and the expected decline in new condo apartment sales this year could lead to a"sizable"increase in the number of completed and vacant units.

"Many buildings in Calgary began construction with less than 50 per cent of the units pre-sold," said the Altus Group Economic Consulting report.

There are indicators of a "much more serious problem for Calgary," said the Altus Group. Those indicators include a high level of condominium starts in 2008 (5,335 units) and a high level of condos under construction. The pace of condo starts has also declined "dramatically" since the end of July, but "very few projects in Calgary have been formally cancelled so far."

"Excessive investor activity has also been a concern in Calgary," said the Altus Group report. "While the percentage of condominium apartment units offered for rent declined in Calgary between 2007 and 2008, the vacancy rate rose significantly from 0.7 per cent to 3.5 per cent."

The report said there is "clearly a large oversupply of product" in Calgary and" more project cancellations would help move the market back into balance more quickly."

The Arriva announcement is the second major construction project in Calgary in the past week to be affected by the current economic malaise.

Last week, H&R Real Estate Investment Trust announced it was deferring the south block of the Bow skyscraper project and construction for the time being would be stopped at grade level on that site.

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Arriva Towers Facts - The Arriva Towers are a planned complex of three high-rise towers in Calgary. One has been built. - The project is located in Victoria Park. - The towers were designed to have 34 to 42 storeys, making them the highest residential buildings in Alberta. - The buildings were designed by BKDI Architects, and developed by Torode Reality Ltd. TRL also owns the Hotel Arts, Kensington Riverside Inn and other development projects.

© Copyright (c) The Calgary Herald
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CanadianTurbo · #**142** Posted **Apr 8, 2009, 3:22 PM**

I received a letter from Arriva on Monday basically stating that we are just holding for the 30 day protection period and then to see what comes out on the other end. These delays I think will most likely see my deposit be pulled whenever possible as I am not wanting to wait as long as it will probably take for this unit.

tdurden5573 · #**143** Posted **May 26, 2009, 11:14 PM**

Has there been any activity at this site over the past few weeks? Or is this project dead in the water. Its too bad, this is a much better location than sasso and Nuera in my opinion (proximity to river and not on a major road)

Bigtime · #**144** Posted **May 26, 2009, 11:15 PM**

Zero activity on the site for easily over a month. Torode had the CCAA protection extended until tomorrow, we'll see if he has made any progress in securing funding then.

craner · #**145** Posted **May 29, 2009, 3:36 AM**

Any news to report yet ??

Bigtime · #**146** Posted **May 29, 2009, 1:24 PM**

Yup, Torode got another extension from the courts to July 2nd. So more time to continue to restructure the company and hopefully find some financing to get this tower going again.

craner · #**147** Posted **May 29, 2009, 6:37 PM**

Quote:

Originally Posted by Bigtime

Yup, Torode got another extension from the courts to July 2nd. So more time to continue to restructure the company and hopefully find some financing to get this tower going again.

Well - I guess it's encouraging that Torode is still trying to salvage this thing by restructuring the company. At least the news wasn't a final death sentance.

Thanks BT

wild wild west · #**148** Posted **Jun 5, 2009, 3:43 PM**

I'm cautiously optimistic that they will get some kind of resturcturing deal done to allow this to proceed. This thing is what, 70% sold? Most of the Vancouver buildings that ran into trouble in the downturn seem to have managed to get back on track, and I really think Calgary's economic fundamentals are just as strong as Vancouver's.

tdurden5573 · #**149** Posted **Jul 28, 2009, 1:30 AM**

Any activity at the site? Any rumors on what is going to happen? Im thinking they will just cap this off at podium eh?

Bigtime · #**150** Posted **Jul 28, 2009, 2:13 AM**

The site was taken over by Price Waterhouse Coopers on July 2nd. Victoria Park Holdings and Victoria Park Limited Partnership are officially in receivership. You can view all the files on this here:

http://www.pwc.com/ca/en/car/victoria-park/index.jhtml

The only activity on site is the 24 hour security presence that appeared with the site being seized.

tdurden5573 · #**151** Posted **Jul 28, 2009, 5:22 AM**

Thanks for the info - moving back to Calgary next year and was very interested in the second tower

Bigtime · #**152** Posted **Jul 29, 2009, 6:31 PM**

Update from an arriVa 42 purchaser in the Calgary Construction thread:

Quote:

Originally Posted by CalgaryHabFan

Just got this via email from PWC:

On July 28, 2009, PricewaterhouseCoopers Inc., in its capacity as receiver and manager of Victoria Park Limited Partnership and Victoria Park Holdings Ltd. filed its First Report to the Court (the "Report").

The Report, among other things, requests approval from the Court for the Receiver's proposed plan of action regarding the Arriva 42 purchase contracts and associated deposits. This includes the termination of the Arriva 42 purchase contracts and a mechanism for the return of the deposits.

A copy of the Report (and other materials filed with the Court) can be found on the PwC Victoria Park website at www.pwc.com/car-victoriapark under the section entitled "Receiver's Reports"

The Court application is scheduled for 10:30 am on Thursday July 30. 2009. We expect that the resulting Court Order will be posted on our website by Friday morning.

I read the reports. Torode was unable to secure additional financing, and the Receiver was unable to sell the project "as is" to other bidders (although there was a "White Knight" potential buyer until recently). Some of the deposit monies were used to finance part of the project, but those funds were insured. So, it looks like 120 of us who put deposits down will be getting our money back. Sad, really......

So it looks like the project is as good as dead. Whatever may end up being built on the site will probably not be like the original design.

Bigtime · #**153** Posted **Aug 10, 2009, 3:02 PM**

An update on this project and probably the end of this thread:

Price Waterhouse Coopers received the courts approval to finish the underground parking structure to grade. Finish up the site of the 2 historic schools adjacent to it and subdivide the site and then sell it.

If anything is to be built on this site it probably won't be the same proposal.

isaidso · #**154** Posted **Aug 10, 2009, 7:55 PM**

Phew! Do we really need another one like this?

TOBoy · #**155** Posted **Aug 10, 2009, 11:26 PM**

As bad is it is, it's better than seeing the site in limbo for the next year. Maybe next boom we will see something much better.

wild wild west · #**156** Posted **Aug 11, 2009, 2:16 AM**

I'm disappointed. 42 would have been a sleek building, would have brought more residents into Vic Park, and most importantly would have provided a nice street wall effect in the area when looking north-south. Instead we're stuck with nothing mroe than an underground parking garage.

isaidso · #**157** Posted **Aug 11, 2009, 7:09 AM**

Be patient, you'll end up with more residents and a good street wall eventually. Arriva wasn't all that nice, in my opinion. I think the Bow will make Calgarians expect more from a tower than they have in the past. When the next boom happens, you might just get a condo tower far better than what they were originally planning here.

tdurden5573 · #**158** Posted **Aug 14, 2009, 4:20 PM**

Too bad, but glad to see it 'finished off'.

Just how easy is it for the next developer to utilize the existing foundation. Does the foundation in place have a large impact on the design/size of building they can put in?

If it has little impact than even the subdivded lot would extreamely valuable. Bigtime must be loving this - View Secured!

Bigtime · #**159** Posted **Aug 14, 2009, 4:37 PM**

Quote:

Originally Posted by tdurden5573

Bigtime must be loving this - View Secured!

I love it and I hate it.

I love having my view preserved for a longer period of time, and I just bought a new lens to try out as well!

I hate the fact that we are losing more density and people moving into the neighbourhood in the short term, although I am sure as the years go by we'll see more projects in this area and on the site itself go ahead.