Notable projects looking down the barrel of receivership are not new to Vancouver’s development industry – but recent activity may well be a canary in the coal mine, according to researcher Andy Yan.
“Given where we are in an interest rate environment that we haven't seen in 20 years, is it a blip or view into the future?” said Yan, who serves as the director of Simon Fraser University's City Program. “I'm not sure.”
While he may not know the definitive answer, Yan said that the current environment of uncertainty when it comes to financing a project and rising municipal fees, taxes and levies beg bigger questions around whether this is a “one-off or larger systemic problem.”
What was planned as a 55-storey strata condominium tower next to a 15-storey tower in Vancouver’s West End, has been placed under receivership with the property owners of 1045 Haro St. initially owing $82.2 million in principal and interest to BMO, the bulk of a $95-million loan, according to court documents.
Justice Shelley Fitzpatrick appointed Deloitte Restructuring Inc. as the receiver and manager of the property. A document published by Deloitte on Jan. 22 shows that the extent of the debt could be at least $169.2 million.
“It's certainly a very visible project. It's one that is around urban redevelopment and in a part of the city that is, one might say, vibrant,” said Yan.
Harlow Holdings Ltd. is listed as the registered owner of the land with Haro-Thurlow Street Project Limited Partnership (HTLP) the beneficial owner, formed in 2018 for the purpose of purchasing the property located on Haro and Thurlow streets.
Forseed Haro Holdings Ltd., 11044227 BC Ltd. and Terrapoint Developments Ltd. are listed as shareholders in HTLP and are listed in Deloitte documents as being owed a combined $86.8 million.
The site’s value is currently assessed at $98 million and is home to a seven-storey building constructed in 1980, according to BC Assessment. The site will be placed on the market after Feb. 24.
Yan said it will be interesting to see how the site is absorbed by other developers.
Intracorp Homes served as the development manager on the project and is not subject to the receivership application.
