SkyCity Centre Winnipeg | 45F | 575 Ft | 175.26 M | Cancelled

[bomberjet]

Jawad and Vince putting on a show for the City.

[trueviking]

Originally Posted by Alexander 90

"Another project milestone Mathieson is able to report is completion of the removal of hazardous materials from the former St. Regis Hotel on Portage Avenue.

CentreVenture was obligated to take back the property from Ontario company Fortress Real Developments of Richmond failed to follow through on a plan to build a parkade and commercial complex on the site.

St. Regis Hotel site is up for grabs once more

At one point CentreVenture hoped to sell the building as it stood, for redevelopment, but is now marketing the property as a clean site and demolition of the old hotel will begin soon.

As a partial reflection of uncertainty of the value of the downtown property, CentreVenture has written down a loss totalling $1.535 million off its books for the St. Regis."

You are a volunteer at Centre Venture and you do not have a clue. Angela admitted to a huge loss. And that did not include interest, property taxes and utilities.

I will edit this and try again.

I invite you to go back and read your original post. You claimed that money was lost because of CV’s engagement of Fortress. That is not the case.

The City told CV to purchase a property and a business from an owner who was not selling, to make an investment in downtown by trying to get rid of a major location for crime. Again we can debate this logic.
CV paid more than the building was worth to achieve this.
Fortress made a good offer on a building that didn't exactly have a lineup of buyers for, but CV understood (like you did) that this developer came with risk, so the agreement came with development timelines, buy-back clauses and penalties for costs incurred by CV if it failed.
Fortress did actually work hard to create a development and went after RFP's to find tenants. In the end, they did fail and all costs to CV were reimbursed by Fortress.
The building was put up for sale again.
A new buyer was found with good financing and a portfolio of significant developments. The offer for what is essentially a piece of land, once again does not cover the initial cost of buying the building and business from an unwilling owner. This was never the expectation.
CV has done pretty well to find a buyer for a derelict, asbestos filled building in a bad location. The same penalties and development timelines apply to the new buyer.

[Labroco]

Originally Posted by trueviking

I will edit this and try again.

I invite you to go back and read your original post. You claimed that money was lost because of CV’s engagement of Fortress. That is not the case.

The City told CV to purchase a property and a business from an owner who was not selling, to make an investment in downtown by trying to get rid of a major location for crime. Again we can debate this logic.
CV paid more than the building was worth to achieve this.
Fortress made a good offer on a building that didn't exactly have a lineup of buyers for, but CV understood (like you did) that this developer came with risk, so the agreement came with development timelines, buy-back clauses and penalties for costs incurred by CV if it failed.
Fortress did actually work hard to create a development and went after RFP's to find tenants. In the end, they did fail and all costs to CV were reimbursed by Fortress.
The building was put up for sale again.
A new buyer was found with good financing and a portfolio of significant developments. The offer for what is essentially a piece of land, once again does not cover the initial cost of buying the building and business from an unwilling owner. This was never the expectation.
CV has done pretty well to find a buyer for a derelict, asbestos filled building in a bad location. The same penalties and development timelines apply to the new buyer.

I have suggested for a long time all that was required to deal with the initial problem was for the City / Province to insist on compliance of the original St Regis liquor licence. It could have been rescinded for noncompliance at no cost to the City. The hotel itself was used I believe to house Manitobans forced to relocate due to northern flooding. These people were not causing the problem.

Who at the City forced CV to buy the building? The Mayor? The Council? The Planning department? The Police department? Who exactly was “they”?

And finally as the Fortress site to the south has turned down offers at $200ft2, the St Regis site at $100ft2 is now inexpensive ...

As long as it does not become a “temporary” parking lot I think I’m good...

And finally, when may we see the rendering that cemented the deal for CV please?

I have been unable to find any information on the purchaser and what they have built or where their funding may be coming from. Do they really have capacity and experience to take on a forty or fifty million dollar project?

[CoryB]

St Regis might have been one of the hot spots but it was definitely not alone. They all bend the liquor rules to favour their clientele.

I think behind the scenes cam up that lead to CV buying St Regis. Perhaps the current owners had quietly been shopping the property? If it was truly about taking over problem sites downtown there would be more purchases that followed this one.

[Luisito]

I hope they eventually build something that cracks 150m tall in that lot. I know its wishful thinking but it's a great location for that.

[BlackDog204]

Originally Posted by Luisito

I hope they eventually build something that cracks 150m tall in that lot. I know its wishful thinking but it's a great location for that.

eh...

Size is overrated. Calgary has the second tallest skyline in Canada, but the women still prefer men from Winnipeg.

[buzzg]

I'd rather have another True North Square on all those empty lots on Graham than one Sky City on one lot, which wasn't even all the empty space on that block.

Aka: I'd be more than happy filling in all these lots with 15-25 storey buildings. As TNS has shown, it's likely going to take a 30+ storey commercial tower (or even hight residential) to have any impact on the skyline at all from the centre of downtown.

[DonaldSmith]

http://faanmortgageadmin.com/wp-cont...he-Trustee.pdf

We are writing to you in our capacity as Trustee regarding the Sky City Project, a high-density
development site in downtown Winnipeg that is currently being used as a surface parking
lot. The Sky City project launched sales to the public in September 2015 but experienced a
number of delays resulting in the Borrower eventually terminating all existing pre-sale
agreements and returning all deposits to the unit purchasers. The Borrower advised that it
was considering its options with respect to the Property as its preliminary design for the
condominium had proven to be too tall and with too much commercial space.
The Borrower has retained CW Stevenson Inc. (the “Listing Agent”) to list the Property for
sale. The Property was listed for sale on September 15, 2020 with no list price and a deadline
for offers of October 15, 2020. The Trustee has been in discussions with the Listing Agent
who has advised that the Property will be marketed to over 1,000 private, public and
institutional investors as well as the local real estate community in Winnipeg.
The Property has multiple syndicated mortgage loans administered by BDMC registered on
title whose principal balances in aggregate total approximately $32 million and are as
follows1:

$25 million in fourth ranking positon;
 $3.5 million in fifth ranking positon;
 $1.3 million in sixth ranking positon;
 $2 million in seventh ranking position; and
 $586,000 in eighth ranking position.
In addition to the BDMC Loans, there are three priority mortgages registered on title to the
Property (“Priority Mortgages”) that in aggregate total approximately $9.5 million. The first
priority mortgage is registered in favour of 11615467 Canada Ltd. in the amount of $5
million, the second priority mortgage is registered in favour of JYR Real Capital Mortgage
Investment in the amount of $2.5 million, and the third priority mortgage is registered in
favour of Ruixia Li in the amount of $2 million. The Trustee understands that the Priority
Mortgages have substantial accrued and unpaid interest and are currently in default. To date,
the priority mortgagees have not initiated any enforcement proceedings in respect of the
Property and have been supportive of the Borrower listing the Property for sale.
Other Priority Claims
The Borrower has provided the Trustee with a summary of amounts it believes should be
paid from the proceeds of a sale transaction for the Property, in priority to the BDMC Loans
(the “Related Party Claim”). The Borrower advises that the Related Party Claim, which
totals approximately $2 million is comprised of, among other things, amounts advanced by
certain companies related to the principal of the Borrower to cover the carrying costs of the
Property.
The Trustee has not consented to the payment of the Related Party Claim in priority to the
BDMC Loans and at this time continues to be engaged in discussions with the Borrower
regarding same.
Next Steps
The Trustee has been advised by the Listing Agent that while significant interest is expected
in the Property, it is unknown at this time what, if any, residual proceeds will be remaining
to satisfy amounts owing under any of the BDMC Loans from a sale transaction after
repayment of the Priority Mortgages and a repayment, if any, to the Borrower on account of
the Related Party Claim. Accordingly, at this time it is unknown whether you will recover any
of the sums that you advanced to the Borrower.

[bomberjet]

So they owe $40mil on the property/project. I can see zero avenues of recouping all that money. The property value is like $5mil or something? With nothing else done.

[optimusREIM]

Originally Posted by bomberjet

So they owe $40mil on the property/project. I can see zero avenues of recouping all that money. The property value is like $5mil or something? With nothing else done.

Wow. I know theres a level of risk you undertake when investing in projects like this, but that sounds unreasonable. What happened to the money? 40m doesnt just up and walk away on its own and theres no way that they had that many expenses on the project before closing up shop. Maybe a couple mil for the sales centre and the design work tops.

[bomberjet]

Check Jawad's pockets. This is their shtick.

I'd estimate they spent maybe $12 mil - $15 mil. Could be wrong because I am not a large property developer.

-Property was $9 mil +
-Sales Centre and agents say $1 mil
-All the rest of the crew back in Toronto working at the office, design consultants, travelling all that maybe $2 mil.
-Who knows what else on the finance side of things. They have an intricate web of companies set-up that money flows through.

Where did the rest go? Some of it to the fees that Fortress collects up front. The rest vanished it seems.

[bomberjet]

https://www.cbc.ca/news/canada/manit...ium%3Dsharebar

RCMP charge developers behind Winnipeg's cancelled SkyCity condos with fraud

Investigation began in 2016 following public complaint about Fortress Real Developments

Joanne Levasseur · CBC News · Posted: Jun 21, 2022 2:38 PM CT | Last Updated: 35 minutes ago

[bomberjet]

"This. Will. Get. Built." - Jawad Rathore, standing on site at the announcement.

[esquire]

I'm pretty sure Simplicity saw through the scheme right from the get-go.

[dennis]

When are they expected to break ground?

[CoryB]

Considering there initial public pitch included a full scale downtown grocery store it was pretty easy to sleuth out that something was off on the proposal from the start. At the time there were four main operators of that sort of store in Winnipeg. For various reasons most of them could quickly be crossed on the list of occupants. Despite that knowledge the developers kept insisting it was accurate and more details would be coming "soon".

Since the time of that proposal Winnipeg has seen three + one new grocery stores.

Save-On-Foods KP
Save-On-Foods Pembina
Co-Op Seasons
Sobeys Extra - new store built on same site as former Fort Richmond Safeway, same company.

Edit: to be completely fair I do not recall when the new Safeway on Henderson at CPT was built but it was also a new build to replace an existing store. This also doesn't account for the number of stores that permanently closed in that same time.

[WhipperSnapper]

Developers pitching a grocery store tenant is commonplace for any large development. Fortress was a legitimate development partner. They co developed dozens of condo projects. Toronto's Brad Lamb wouldn't be the developers he is without them. Their model to raise capital through syndicated mortgages with guaranteed returns on investments as the hook was the scam.

[prairiedog007]

Originally Posted by CoryB

Considering there initial public pitch included a full scale downtown grocery store it was pretty easy to sleuth out that something was off on the proposal from the start. At the time there were four main operators of that sort of store in Winnipeg. For various reasons most of them could quickly be crossed on the list of occupants. Despite that knowledge the developers kept insisting it was accurate and more details would be coming "soon".

Since the time of that proposal Winnipeg has seen three + one new grocery stores.

Save-On-Foods KP
Save-On-Foods Pembina
Co-Op Seasons
Sobeys Extra - new store built on same site as former Fort Richmond Safeway, same company.

Edit: to be completely fair I do not recall when the new Safeway on Henderson at CPT was built but it was also a new build to replace an existing store. This also doesn't account for the number of stores that permanently closed in that same time.

And a new Freshco in the previously closed SAFEWAY at Henderson and Kimberly

[borkborkbork]

Originally Posted by WhipperSnapper

Developers pitching a grocery store tenant is commonplace for any large development. Fortress was a legitimate development partner. They co developed dozens of condo projects. Toronto's Brad Lamb wouldn't be the developers he is without them. Their model to raise capital through syndicated mortgages with guaranteed returns on investments as the hook was the scam.

lol brad lamb is such a scumbag, they're all perfect for each other

[BlackDog204]

Any updates on what is happening with the abandoned site that was supposed to be SkyCity Centre? Is the St Regis torn down now?

Has the case against Fortress been resolved, or been through the courts?