Maroc - STOREYS.COM - A La Une - 17/Jun 20:04

Peterborough Community Development Owing $52M Placed Under Receivership

Burnham Meadows Community development to be built in Peterborough has been placed under receivership, according to filings in the Ontario Superior Court of Justice. The 80-acre “active living community” was set to be located on the east side of Television Road and on the south side of Old Norwood Road in the Township of Otonabee-South Monaghan. The parcels of land comprising Burnham Meadows are owned by 2174542 Ontario Inc., Safe Harbour Homes Inc. and Safe Harbour Developments Inc., and financed by Waterloo-based commercial construction and development financier MarshallZehr Group Inc. Planned for the subdivision were 103 townhomes and single detached homes, office and retail commercial space, a self-storage facility, and retirement residences. The Receivership The application to appoint a Receiver over the property was filed by MarshallZehr Group Inc. near the end of March and approved by the Ontario Superior Court on May 31. TDB Restructuring Ltd. was appointed as the Receiver, "without security, of all of the assets, undertakings and properties of 2174542 Ontario Inc., Safe Harbour Homes Inc. and Safe Harbour Developments Inc." Funding for the development consisted of two loans totalling over $52M: one $47,151,620 Servicing Loan and one $5,338,626 Construction Loan. According to MarshallZehr's application, both loans have matured and have not been repaid, with the last payment for the Construction Loan received in February 2022, and the last payment for the Servicing Loan received in April 2022. As a result, “construction and development have stalled for over a year, and the Debtors do not have the funds available to progress with construction,” says Cecil Hayes, President of MarshallZehr, in an affidavit. Hayes also states that the Debtors have been trying to sell the Lands “enbloc or piecemeal since July 2023 without success.” As well, “Any sales made prior to July 2023 were often at a loss.” Attempts to secure new financing were also unsuccessful. “The Debtors have also been working with commercial brokers to find potential developers to buy one or more of the land parcels. To date, the Debtors’ efforts have not yielded any meaningful sales,” says Hayes’ affidavit. In June 2022, after defaulting on their loans and failing to secure alternative funding, the Debtors requested additional financing from MarshallZehr but were turned down “as a consequence of the Debtors’ defaults,” says Hayes. Between July and November 2023, there were discussions surrounding a forbearance agreement, but the Debtors “were not prepared to enter into a forbearance agreement on terms acceptable to MarshallZehr.” As of March 11, 2024, the Debtors still owe MarshallZehr an excess of $52 million. Now, TDB Restructuring Ltd. will likely retain a broker to market and sell the parcels of land, piecemeal or enbloc, comprising the partially-constructed Burnham Meadows subdivision.