Editor’s Note: A previous version of this article stated that Jones Lang Lasalle Real Estate Services, Inc. (JLL) has been proposed to broker the sale of these sites, however, information since obtained from KSV Advisory reveals this to be incorrect and no petition for a 'sales process approval order' has been made. The rest of the information in this article remains accurate.
It’s been just over a month since a cluster of industrial development sites in the Southdown neighbourhood of Mississauga were hit with a receivership order from the Ontario courts. And the grounds for doing so were quite strong; according to court filings, the site owners were some $60M over-budget and owning more than $363M at the time the pleas for receivership were made.
The undertakings at 759 Winston Churchill Boulevard, 688 Southdown Road, and 2226 Royal Windsor Drive have been mired in receivership proceedings since KingSett Capital filed an application in mid-February. The courts granted the receivership order several months later, on May 30, appointing KSV receiver and manager of the properties, assets, and undertakings over three single-purpose and privately held real estate companies known as 759 Winston Churchill GP Inc., 688 Southdown GP Inc., and 2226 Royal Windsor GP Inc.
Collectively referred to as the “debtors” throughout the court documents, those three entities are the registered owners of the aforementioned development sites in southwest Mississauga. Michael Moldenhauer — he appears to be at the head of a Toronto-based real estate, investment, development and finance company known as the Moldenhauer Corporation — is described as “a director of each of the debtors.”
A sworn affidavit from Daniel Pollack, dated April 23, runs through the events that led up to the receivership appointment. Pollack, who is Executive Director of Portfolio Management over at KingSett, explains that the development was set to include a series of complexes both industrial and residential in nature.
Speaking specifically to the 759 Winston Churchill property: it was “intended to be developed into 750,354 sq. ft of industrial facilities, comprised of three Class A industrial buildings.” At the time of Pollack’s affidavit, just one building had been completed, and was fully-leased. Another was under construction and the third had not yet broken ground — but even so, “the costs associated with the Churchill Lands have gone approximately $60M over-budget.”
Rendering of warehouse at 759 Winston Churchill Boulevard, which Pollack's affidavit describes as completed and fully-leased. (Avison Young/realtor.ca)
As for the two other addresses included in the court documents — 91 acres on Southdown and 74.5 acres on Royal Windsor — it appears that they are currently zoned for industrial use but were planned to be rezoned for residential. The status of the rezoning was reportedly “unclear” to KingSett when they initiated the receivership proceedings, and the court documents state that no material construction had commenced on either site to date.
Pollack’s affidavit says that loan facilities extended by KingSett to the debtors in support of acquisition, refinancing, and development include a loan to in the principal amount of $205M and cash in lieu of letters of credit in the principal amount of $7,653,864 — both extended to the Churchill site owner — as well as a $165M loan to the Southdown owner and a $35M loan to the Royal Windsor owner.
In the time that has elapsed since the initial loans were issued, KingSett alleges “several events of default” under the lending agreement, including Churchill’s failure to pay the monthly payments of interest, the registration of construction liens against the Churchill lands in the amount of $3,755,712, Southdown’s failure to pay indebtedness owing in full by the maturity date, and the registration of construction liens against the Southdown lands in the amount of $13,522,685.
As of January 2024, $328,327,905 was outstanding in respect of Churchill and Southdown, while an additional $35,252,643 was outstanding for Royal Windsor. Taken together, the development property is now linked to $363,580,548 in total debt.
Though demand letters have been issued from KingSett to the debtors, “the entirety of the Indebtedness remains outstanding and the Debtors have failed to table any viable solution,” according to the court documents.
