Problem plagued luxury Yorkville condo The One put into receivership

Toronto is well known for endless condo development construction. However one new build in a prominent area that has fallen on hard times. PLUS, we pay tribute to a GTA hamburger legend. Richard Southern reports.

A luxury condo and retail development at Yonge and Bloor Streets that was billed to be the tallest of its kind in Canada has been placed in receivership after it was plagued by construction delays and cost overruns that left it $1.6 billion in debt.

Lenders forced the project into receivership after claiming the developers failed to make payments on those growing debts.

The One — an 85-storey hotel, condo and retail development by Sam Mizrahi and Jenny Coco — was supposed to be finished by December 2022 at a cost of $1.4 billion.

So far, concrete columns and walls have only been poured up to the 40th floor with a projected completion date of March 2025, according to court documents filed by lender KEB Hana Bank, a South Korea-based financial institution.

The project is also expected to run $600 million over budget, according to the documents.

Apple Inc. was reportedly slated to open its flagship store on the main floor of The One’s retail space. But the court documents state: “The Project recently lost its anchor retail tenant, and no replacement anchor tenant has been secured.”

Alvarez and Marsal Canada Inc. has been appointed the receiver and manager and will have access to $315 million to continue construction, the court documents reveal.  

Mizrahi Inc. will remain the general contractor on the project.

Mizrahi Developments provided the following statement to CityNews:

“At the request of the project’s senior lender, the court has appointed a receiver to overcome an ongoing governance issue that has caused significant project delays. As part of this arrangement, the receiver has requested that Sam Mizrahi and his company remain as the Developer and General Contractor to oversee completion of The One. Mr. Mizrahi maintains his equity position in the project. 

This is a welcome decision that will allow for the successful completion of The One under the continued leadership of Sam Mizrahi and Mizrahi Developments.”

A FAQ on the Alvarez and Marsal Canada Inc. website attempts to sum up what went wrong with the project.  

“Over the last few years, like many other large-scale construction projects, The One Project has faced various economic headwinds, including impacts from the COVID-19 pandemic, supply chain disruptions and unanticipated work stoppages, which, together with other factors have resulted in material cost overages and extended construction timelines.

“The principal purpose of the receivership proceedings is to create a stabilized environment to allow for the continued construction of The One Project, to obtain additional financing required for that ongoing construction, and to assess and implement the best means of maximizing the value of The One Project.”

Alvarez and Marsal Canada says previous sale agreements will be reviewed in the near future “in conjunction with a review of the fair market value of the applicable unit to determine what, if any, steps will be taken with respect to these agreements.”

As of August 31, 2023, 70 residential units at The One remain unsold.

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