Receivership Announced for Sam Mizrahi's 'The One' Project
In recent times, the Toronto skyline has been a-buzz with the tales of a towering aspiration, encapsulated in the form of Mizrahi Developments' colossal project, 'The One'. Nestled at the iconic intersection of Bloor and Yonge streets, this 85 to 91-storey luxury condominium and mixed-use tower promised to change the face of luxury living in Toronto. However, the tides of fortune have swept across 'The One' in a far less favorable manner, plunging it into receivership, a legal process where a receiver is appointed to manage the assets and operations of a company to ensure debt repayment.
The tale of 'The One' mirrors a grand vision met with reality checks. Initiated in 2017, the architectural marvel was set to house opulent condominiums, a hotel, and commercial space, all under the vigilant eye of real estate maestro Sam Mizrahi and entrepreneur Jenny Coco. The duo embarked on a journey to touch the sky, quite literally, with 'The One' being one of Canada's tallest skyscrapers. However, as of October 2023, the tower had only reached its 40th storey, halting short of its grand ambition owing to a financial quagmire.
The financial intricacies surrounding 'The One' are as towering as the structure itself. Court filings reveal a staggering $1.235 billion owed in loans from KEB Hana Bank alone, with a total secured indebtedness summing up to approximately $1.662 billion. This monetary maze also includes debts to Aviva Insurance, Coco International, CERIECO Canada Corp., and NongHyup Bank among others. The financial tremors didn't stop at the loans; the original construction budget was significantly exceeded, with the anticipated gross project expenditures skyrocketing beyond $2 billion, a figure that overshadows the initial cost projections by over $600 million.
The saga took a dramatic turn when on October 4, 2023, the senior lender, KEB Hana Bank, sought repayment for all debts related to 'The One', following several loan defaults since 2019. Consequently, 'The One' was placed under receivership, with Alvarez & Marsal Canada Inc. stepping in as the receiver to navigate the turbulent financial waters. The receivership, however, wasn’t the end of the road for 'The One'. Amid the financial storm, the court directed a provision of $315 million as a non-revolving term credit facility to keep the construction afloat.
The narrative of 'The One' entering receivership stirred the real estate realm, casting shadows over the pre-sale buyers awaiting news on their units, and the commercial component of the project which lost its anchor retail tenant without finding a replacement.
Despite the financial hurdles, the story of 'The One' is far from over. Mizrahi Inc. continues its role as the General Contractor under the supervision of the Receiver, bringing in additional construction advisors to ensure the project stays on course. In a twist of events, a new developer has also stepped in to provide advisory support, promising a shimmer of hope in the complex narrative of 'The One'.
'The One', with its majestic design, was poised to be more than just a building; it was meant to be a symbol of architectural ambition, a testimony to the high-stakes world of real estate development in Toronto, and a future-ready chapter in the city’s ongoing urban narrative. As the city watches with bated breath, the saga of 'The One' continues to unfold, each day writing a new line in the story of Toronto’s architectural dreams and the relentless human spirit driving some of us to achieve them.