Fortress Real Developments announced on July 17 that it has executed an agreement to purchase Barrie’s failed Collier Centre project. This agreement is pending court approval and will give Fortress sole ownership of the mixed-use project.
The project, which began construction in 2012, is now 65 per cent complete and is expected to need another year of work before full occupancy can take place. In the retail/commercial component of the project, there are currently leases in place with several Triple-A tenants including Bank of Montreal, which took possession of its space last year. The residential component, LakeView Condominiums, is 100 per cent sold out.
“Situated right across from City Hall and overlooking Kempenfelt Bay, this will be the best address in Barrie for residents and retailers alike when it’s finished,” said Fortress CEO Jawad Rathore.
Fortress has been working closely with a large-scale national builder who will be brought on to complete this project. Work is expected to begin immediately following the completion of the sale. “We’ve put an exceptional team in place to complete the project. This is a complex build, and we recognized early on the importance of bringing in the best,” said Fortress chief operating officer Vince Petrozza.
Designated as an Urban Growth Centre in the Province’s Places to Grow Act, Barrie has seen significant intensification in recent years. Ben Myers, senior vice-president of market research and analytics at Fortress, spent time studying the market before the purchase.
“Like many mid-sized municipalities in Canada, Barrie has embraced the condominium in recent years with over 300 suites currently under construction,” Myers said in a news release. “We believe the residential portion of Collier Centre is one of the best locations in the City and we look forward to providing quality high-rise living to the downtown area.”
Frank Margani, executive vice-president of strategy and development at Fortress has been spearheading the process of putting this deal together. “This has been a team effort,” he said. “It’s been a challenging process given what was left from the previous developer, but we have been working with several lenders and various partners to ensure a program of success moving forward for all stakeholders.” Once the courts approve the sale, Fortress plans to unveil full details of its plans for completing the project.
With more than 70 projects across Canada under construction, development or already completed, Fortress is adept in seeing projects through to completion even if the original plan changes course.
“We’re very fortunate to have a fantastic team that allows us the flexibility to step in and take over projects as needed. It doesn’t happen often but when the situation presents itself we have the savvy and the capital strength to do what needs to be done,” Rathore said. “The best part of this deal is that, it was done to make right a situation that the previous owner had let go so wrong.”
“The tradespeople will soon be back to work, the condo buyers are going to get a wonderful building, the mortgage lenders and stakeholders have a clear plan to exit and potentially earn even more profit and, best of all, the residents of Barrie will soon have new exciting shops and businesses at which to spend their time.”
The $100 million project ran into trouble with mounting construction liens and missed leasehold deadlines, and the previous owner, Windsor-based Mady Development Corp., sought court protection from creditors when grocer Sobeys could not gain possession to open its store in February, as the project ground to a halt with a flurry of unpaid bills and construction liens from upwards of 200 creditors.
Court documents indicate construction was frozen because of tradespeople walking off the job, as construction liens escalated from about $4 million at the end of November (the originally scheduled conclusion date for the project), to more than $11 million at year’s end.
Laurentian Bank demanded a $29-million payment on dec. 17 and warned the developer it would enforce its $52-million mortgage security conditions under the Bankruptcy and Insolvency Act. Mady reported to the court he has spent $51 million on the project and needed another $29 million to finish it.