Maroc - STOREYS.COM - A La Une - 08/Jul 15:17

Developer Behind Richmond Hill Townhome Project Owing $22.5M In Receivership

Yet another Greater Toronto Area housing project has become wedged in the development pipeline as receivership proceedings play out. This time, it’s a nine-parcel site at 8, 10, 12, 14, 16, and 18 Bostwick Crescent, and 2, 6, and 8 Bond Crescent in Richmond Hill that was set to accommodate a residential community of stacked and freehold townhomes. The parcels were consolidated on November 15, 2023.Recent court filings reveal that the site owner, King Development Inc., was placed under receivership on June 11, 2024, with the Ontario courts directing Rosen Goldberg to act as manager of all of the company’s assets, undertakings, and properties. This was just four days after a request for an appointment order was filed on June 7 by C&K Mortgage Services Inc. According to C&K, their loan to King Development has been in “financial default” since December 1, 2023, and as of December 6, just over $22,500,179 continues to be outstanding.A June 7 document describes the initial $22M loan from C&K, which was extended to King Development on April 28, 2022, for a one-year term and with an interest at the rate of 10.75% per annum, “calculated and payable interest only monthly.” The document identifies the debtor’s principal to be Fanseay Wang, who appears to also be the founder and principal of Vaughan-based property acquisition, financing, and management firm, Grand Grace Development.By June 1, 2023, C&K’s initial loan had matured, but it was extended for an additional six months. At that time, the interest rate payable under the loan was increased to 12.8% per annum. On December 6, a demand for payment was made by C&K.“The hearing of this application was originally returnable on March 7, 2024,” the June 7 filing explains, adding that the matter was adjourned multiple times while C&K “explored the potential of achieving a prepackaged sale of the property for the court to approve contemporaneously with [Rosen Goldberg's] appointment as receiver.” However, it appears that “no such transaction has been achieved” despite those efforts. “Given the extent to which the property is leveraged with significant debt owing to numerous subordinate ranking mortgagees, it is critical that a receiver now be appointed over the property so that it can be marketed and sold by a court officer in a fair and transparent manner, with a view to maximizing realization and achieving a definitive sale of the property within a reasonable timeframe.”Although the court filings obtained from Rosen Goldberg don't get into the specifics of what was proposed for this particular site, a staff report that went to Richmond Hill City Council on July 6, 2022, says that 72 new townhouse units were proposed, and that zoning by-law amendment and site plan applications had been filed at that time. The report further states that there were plans to “establish common element condominium tenure over the subject lands.”Also of note is that C&K’s loan appears to be one of a handful registered against the property at 8, 10, 12, 14, 16, and 18 Bostwick Crescent, and 2, 6, and 8 Bond Crescent. In addition, the property is “subject to four subordinate ranking charges,” according to the June 7 court filing, including $2.75M registered to Cameron Stephens Mortgage Capital Ltd., $5M registered to WPC GPI Inc., and two separate loans — one for $1M and the other for $5M — registered to Amercan Corporation. In particular, Cameron Stephens holds the second-ranking charge against the property, and they filed for receivership over “a number of entities” controlled by Fanseay Wang on December 5, 2023 — the Richmond Hill property included. C&K, as the first mortgagee on the Richmond Hill property, objected to its inclusion in the order at that time. As a result, when the Ontario courts appointed Albert Gelman Inc. receiver and manager over several entities owned by Wang, the Richmond Hill property was exempt.