On the southwest corner of High Park Avenue and Annette Street — right on the border between the neighbourhoods of High Park and The Junction — it’s hard to miss the High Park Alhambra Church. For one, it’s a striking structure: more than a century old, built in Collegiate Gothic Revival style, and ornamented with red brick gables, crenellated towers, arrow slit windows, and stained glass.
Beyond its curb appeal, the (currently vacant) church makes even more of an impression because it’s in the midst of being transformed into a 70-unit condo complex through adaptive reuse (an undertaking that got the City's stamp of approval back in 2017). In fact, a four-storey condo addition has already begun to take shape on the property, which is municipally known as 248 and 260 High Park Avenue.
However, it would seem that the project is now facing an uncertain fate after the Ontario court granted a receivership order over all property, assets, and undertakings of the site owners (the debtors) on May 27, 2024. They are named in the court documents as: 260 High Park Limited Partnership, TRAC Developments Inc., and 2486357 Ontario Inc.
The receivership order closely follows filings from Meridian Credit Union, which allege that the debtors were owning over $42.2M as of April 9, 2024.
Some important context: 260 High Park Limited Partnership is described in the court documents as a single-use real estate development company formed specifically for the High Park Alhambra Church project. Meanwhile, 2486357 Ontario Inc. appears to be the owner of 248 High Park Avenue specifically, and the address on file for that numbered company matches that of Medallion Capital Group. TRAC Developments is referred to in the court documents as the “general partner” of the developer and the owner of the 260 High Park Avenue address.
A rendering of the retained High Park Alhambra Church facade (Medallion Capital Group/Turner Fleischer Architects)
Multiple Mortgages, Multiple Breaches
According to the court filings, Ernst & Young Inc. was appointed receiver over the debtors’ assets on Monday, with the application for receivership citing not only the principal loan that was owed, but outstanding construction liens as well. The documents also run through multiple breaches that precipitated the proceedings.
Meridian’s sworn affidavit, dated May 22, 2024, explains that they entered into a demand credit agreement accepted by 260 High Park Limited Partnership on July 12, 2022. That agreement was later amended on September 25, 2023, with repayment expected less than a week later, on September 30, 2023. Pursuant to the amended credit agreement, the debtors owe just over $42,252,410 to Meridian.
Although Meridian initiated the receivership proceedings, it appears that the debtors had taken out two other mortgages including one that predated Meridian’s with Westmount Guarantee Services. That mortgage was in the principal amount of $20M and was taken out on November 23, 2018. The receivership application explains that “Meridian and Westmount entered into a postponement of interest in respect of the Mortgaged Lands pursuant to which Westmount postponed its mortgage in favour of Meridian, with the effect that the Meridian Mortgage ranks ahead of the Westmount Mortgage.”
Previous to that, there was a mortgage in favour of Fiera FP Real Estate Financing Inc. and Fiera FP Real Estate Financing Fund, L.P. in the principal amount of $14.3M. Interest on that debt was also postponed thanks to an agreement between Westmount and Fiera.
“Notwithstanding the Westmount Meridian Postponement and the Westmount Fiera Postponement, Westmount retains priority over deposits paid to 260 High Park by pre-sale purchasers of condominium units for so long as they remain in trust with counsel for 260 High Park,” the filings note.
In addition to all of that, construction liens clocking in at over $14M were registered against the mortgaged lands as of March 6, 2020, according to title searches referenced in the filings. “The registration of the construction liens against title to the mortgaged lands, and 260 High Park’s failure to clear them from title immediately, is a breach of the terms of the credit agreement.”
A progress update from June 2021 (260highpark.com)
A Development In Limbo
Construction on the 248 and 260 High Park Avenue site broke ground in November 2019, and according to a singular update provided on the project’s website, site shoring and excavation was 100% complete, formwork and concrete on parking level 1 was “well underway,” and a tower crane had been installed “allowing for full capacity construction work,” by June 2021.
But things have seemingly come to a halt. Meridian’s affidavit says that they have “lost confidence” in 260 High Park Limited's “ability to manage and complete” the project — in part, due to the extent of the “significant construction liens,” and in other part, due to project overruns.
A September 30, 2023, report prepared by Finnegan Marshall, Meridian, and Fiera’s project monitor and referenced in the filings explain that there was an increase in the overall project budget to over $95.4M — and that amount does not include a mezzanine loan interest reserve of around $5M — marking an overrun of approximately $4.8M. This was on top of the “unfunded cost overrun” cited in a previous report, which came in at around $3.7M.
Failure to fund these overruns is also considered a breach of the credit agreement.
“In addition to these defaults under the credit agreement, on April 11, 2024, the applicant received notice that the property insurers for the 260 High Park Project were cancelling the insurance coverage for non-payment by 260 High Park,” the court filings also state. “This is another breach under the credit agreement. The applicant has made a protective disbursement under its mortgage to pay these premiums directly.”
These breaches have been communicated by Meridian to the debtors via letter on two separate occasions.
Now that the receivership order is in effect over 260 High Park Limited — and by association, the lands at 248 and 260 High Park Avenue — it’s likely that the court-appointed monitor, Ernst & Young Inc., will arrange a sale of the property to help recoup funds. As for the fate of the condo project: it’s too soon to say if it will ever come to fruition.
With that said, TRAC President Chris Giamou said in a statement provided to STOREYS post-publication that TRAC remains “committed to seeing this condominium project through to completion despite unexpected obstacles.”
Giamou went on to note that the company is “currently exploring several avenues within the receivership that will work toward the best interests of all stakeholders,” including purchasers, sub-trades, lenders, and creditors.
“While the receiver can make the recommendation to the courts to sell the project, we don’t believe such a decision would be in the best interests of the stakeholders, and we are confident the receiver will likewise arrive at the same conclusion. We are doing everything possible to ensure that our purchasers, who voiced their confidence in TRAC’s management team, can still realize their dream of homeownership at 260 High Park.”
STOREYS has also reached out to Medallion for comment on the proceedings.
