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55-storey Vancouver residential condo, rental project in receivership

Owners of the property owe BMO $82.7 million, the bulk of a loan the bank made in August 2018 when the sale was one of the biggest land deals in Metro Vancouver that year.

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When more than a dozen companies and individual investors bought the site at 1045 Haro St. in downtown Vancouver in 2018 for $172 million, market analysts noted it was one of the biggest dollar-value sales in Metro Vancouver that year.

Working with a developer and architect, the owners envisioned turning the West End site into two towers — one a 55-storey condo tower, one of the tallest in the area, the other a 15-storey building dedicated to rental units — plus a daycare facility and new public plaza.

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But the project is now in receivership and a judge recently ruled the property has to be sold — likely for a lot less, according to court documents — so that the Bank of Montreal can be repaid the bulk of a $95-million loan.

BMO said in a petition that the owners of the property owe it $82.7 million in principal, plus $24,000 a day in interest charges starting from Oct. 16, 2023.

In a recent B.C. Supreme Court order, Justice Shelley Fitzpatrick appointed Deloitte Restructuring Inc. to manage the property with the power to sell it to pay back the BMO loan.

In July 2022, Vancouver city council approved plans for the owners of the site, who were working with Intracorp Homes, to build 450 market condos and 66 rental units. The project falls within the West End Community Plan.

The borrowers of the loan said in court documents they did not apply for a development permit “for many reasons, not least of which include challenges of meeting the City of Vancouver’s requirements with respect to the preservation of view corridors.”

City staff pushed back on the proposed 580-foot height of the taller tower because it could potentially lead to shadowing on Robson Street and blocking mountain views protected by city policy. The developers had proposed a sleek, triangular shape to work around the restrictions.

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The property is currently assessed at $98 million and holds a seven-storey apartment building dating to the 1980s. The judge’s ruling said it can be put on the market for sale after Feb. 24.

Court documents discuss other issues between the individual investors and companies who bought the Haro Street property under an umbrella company named Harlow Holdings.

These include disagreements about how to refinance the project and what new loans could be negotiated, as well as whether to accept offers to buy the property for significantly less than the original $172-million investment to pay the BMO debt.

Intracorp was managing the development of the project and a related company, Terrapoint Developments, is one of the companies that is an owner of the site, even though it only has a small share at 10 per cent.

Fitzpatrick in her judgment wrote that Terrapoint was not prepared to be part of any refinancing of the property and called for its sale.

Some of the other names in the group of owners include Vancouver businesspeople Kang Yu Zou, also known as Kenny Zou, his wife Wei Dong and his parents Wei Zou and Xia Yu, who were also involved in a separate group of investors and companies, including major Shanghai-based China Minsheng Investment Group, which bought Grouse Mountain Resorts in 2017 and then sold it in 2020.

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The Globe and Mail first reported there is another lawsuit, dating back to 2021, where one of the owners, Hong Kong-based Treasure Bay HK, alleges that Kang Yu Zou received $25 million from others in the group without providing adequate security. It alleges that Zou, who is married to Wei Dong and is the son-in-law of Wenbiao Dong, the chairman of CMIG, “leveraged family relationships” to get the loan.

Zou and others in that claim filed a statement of defence in 2022 denying the allegations.

Postmedia did not hear back from individuals and companies it tried to reach that are part of Harlow Holdings.

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