The One, an 85-storey luxury condo building at the corner of Bloor and Yonge streets, has been placed into receivership.
Consulting firm Alvarez & Marsal Canada Inc. will receive all assets from the project.
The receivership follows a string of problems for the condo, including a lawsuit from Apple Inc. due to construction delays that affected the tech company’s ability to open a new flagship store on the condo’s ground floor. Court documents from the receivership application suggest that Apple has pulled out of the project completely due to construction delays.
The request for Alvarez & Marsal Canada Inc. to take over as receiver was filed by KEB Hana Bank, a financial institution based in South Korea, on Tuesday.
The consulting firm will continue construction of the property using an allocated $315 million, per court documents, while Mizrahi Inc. will remain the general contractor on the project.
In a sworn affidavit, Joo Sung Yoon, a vice president within the Global Fund Management Team of IGIS Asset Management Co., Ltd. (headquartered in Seoul), cited principal investors Sam Mizrahi and Jenny Coco’s “inability to manage the project.”
“Construction of the entire Project was expected to be completed by December 31, 2022, but as of October 4, 2023 concrete columns and walls have only been poured up to the 40th floor,” said Yoon in the affidavit. “Even on the Borrower’s revised timeline, construction is now not expected to be completed until March 2025.”
“The project…has been plagued by delays and cost overruns, not to mention continual infighting between the principal investors in the project, both in and out of court,” representatives for KEB Hana Bank said in court documents.
“The senior secured lenders have now lost confidence in the borrower…the appointment of the receiver will bring much-needed stability, as well as oversight, to the project with a view to maximizing value to all stakeholders.”
“At the request of the project’s senior lender, the court has appointed a limited scope 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," representatives for Mizrahi Developments said in an email.
"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."
