The developer whose company is behind the proposed Langford Gateway project is in a legal battle over the firm’s failure to pay contractors on a partially completed Kelowna development.
Two arrest warrants were issued for the company’s CEO for not appearing at court hearings. He finally appeared last month.
The payment dispute, first reported by the Investigative Journalism Foundation, revolves around Cynterra Group’s Promontory development, a 120-unit townhouse development in Kelowna.
Promontory is one of two projects listed on Cynterra’s website, along with the proposed Langford Gateway project. That plan is for 22- and 18-storey towers on land bordered by Arncote Avenue, Peatt Road and Sunderland Road, with 269 units in the initial two towers and two more buildings in a future phase with about 200 units and office space.
“This exciting project which is comprised of a complete city block is in the planning phase. Updates will be posted as they become available,” the Cynterra Group website says of Langford Gateway. It notes that investment is “currently not available” for the project.
This week, Lanyard Investment Inc. filed foreclosure proceedings in B.C. Supreme Court, alleging Cynterra CEO Bob Fraser and Langford Gateway Developments defaulted on their mortgage, and must pay back about $8.2 million, along with daily interest of about $3,000 beginning July 25.
Lanyard’s allegations have not been tested in court and neither Fraser nor Langford Gateway Developments had formally responded to Lanyard’s petition to the court this week.
A message left with Cynterra on Thursday was not immediately returned.
The rezoning application for the Langford Gateway project is at the third-reading stage, a municipal spokesperson said Thursday, adding the city is waiting for the applicant to complete requirements set by council before it goes to final reading.
If that happens, the applicant could then submit applications for a development permit and a building permit.
In mid-July, two arrest warrants were issued for Fraser for failing to appear in court for a “payment hearing” in connection with the Kelowna project.
The hearings were to be held to determine how Fraser planned to repay two default judgments that had been ordered against his company for unpaid security monitoring services and for appliances for the Promontory development.
The default order in favour of security company Six Technologies was for about $34,000, while the Trail Appliances judgement totalled about $46,000.
Fraser, a Vancouver resident according to civil court documents, appeared in court in Vancouver on July 23, a week after the warrants were issued, and was released on a promise to appear at future payment hearings in August and September.
Prior to the court appearance, Fraser told the Investigative Journalism Foundation that his company owed “a very small amount” compared to the scale of the project, and he had “never heard of something like this.”
“Good God, I don’t know what to say other than it’ll all get paid in the next few days,” Fraser told the Investigative Journalism Foundation.
Cynterra Group’s website says the Promontory project is 60% completed, and is “moving toward construction of the final phase.”
In their notice of civil claim, Six Technologies says they provided security monitoring services from May 2022 to October 2023 and Cynterra “were repeatedly late in paying their monthly invoices.”
Six Technologies ended its contract with Cynterra in September 2023, as they said the developer owed them $33,935 for services provided.
In its civil claim, Trail Appliances says it agreed in April 2021 to supply fridges, ranges, dishwashers, washers and dryers for the Promontory development on credit. Some of the appliances were delivered in August 2023, but Trail says Cynterra still owes $46,457.
Judges ordered default judgments in both cases, after Cynterra didn’t respond to the civil suits.
The Investigative Journalism Foundation has previously reported that Cynterra, its predecessor Evest Funds and their associated companies have faced at least a dozen lawsuits from contractors claiming they haven’t been paid for construction, building supplies, bookkeeping, architectural design, accounting, consulting, asbestos abatement and legal services.
Fraser said in April those claims have largely been settled, or they soon will be, and that some buyers at Promontory have moved into their units.
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