http://www.bloomberg.com/apps/news?pid=20601082&sid=adUbCBRwzqHo&refer=canada
Sale Ordered for Site of Planned Toronto Skyscraper (Update1)
By Joe Schneider
Aug. 17 (Bloomberg) -- An Ontario judge ordered the sale of a downtown Toronto parcel to pay off creditors, ending developer Harry Stinson's bid to build the city's tallest residential tower and surpass a rival project by billionaire Donald Trump.
Ontario Superior Court Judge Peter Cumming, at a hearing in Toronto yesterday, named BDO Dunwoody as the interim receiver for the property at 66 Temperance Street in the city's financial district. He issued his order after Stinson failed to sell the land to Dubai-based Tulip Business Developers for about C$30 million ($28.2 million).
Stinson had proposed to build twin towers at the Temperance Street site, the bigger one to rise 81 stories. Trump's plan calls for a 70-story condominium and hotel just one city block away. The Toronto developer's plan collapsed when Graphic Arts Building Corp., which sold him the property, demanded full payment on a C$10.5 million mortgage in default.
``Mr. Stinson is resigned to the fact that it must be sold,'' his lawyer, Arthur Jacques, told the judge yesterday.
Jacques urged the judge not to place the project in formal bankruptcy, or liquidation. It's currently restructuring under Canadian law akin to a Chapter 11 reorganization in the U.S.
He said a bankruptcy filing would devalue the site because international investors view sales of property in that status differently from those in a restructuring.
``The `B-word' is bad,'' Jacques said. ``The word has a negative impact.''
Cumming replied that ``anyone making a bid knows this is a forced sale.''
Bankruptcy Delayed
The judge agreed to hold off putting the project officially into bankruptcy until another hearing on Sept. 4.
In addition to the C$10.5 million mortgage, there is about C$15 million of debt attached to the property, and of that amount, about C$10 million is held by unsecured creditors, said Alex McFarlane, BDO Dunwoody's lawyer.
``There are going to be unsecured creditors here who don't get paid, or don't get 100 cents on the dollar,'' Cumming said.
Trump's plans have also been plagued by problems, as preconstruction sales were lower than anticipated. The project has been delayed for six years as the New York developer switched financial backers and designs.
The tower has been scaled down to 57 stories, which would still make it the highest residential building in the city. Construction is now set to begin later this year.
The case is In the Matter of the Companies' Creditors Arrangement Act and in the Matter of a Plan of Compromise or Arrangement of Sapphire Tower Development Corp., Ontario Superior Court of Justice (Toronto), File No.: 07-cl-7109.
To contact the reporter on this story: Joe Schneider in Toronto at
jschneider5@bloomberg.net .