A three-tower development that would have brought over a thousand residential units to Brampton’s Queen Street East corridor is in hot water over a $10M vendor take-back mortgage.
According to one court document, dated January 26, 2023, site owner 253 Queen Street Inc. failed to make a $400,000 interest payment to Homedale-Eagle Corporation that was due on November 2, 2023, and has been in default on the loan ever since. That same document notes that a “formal demand for payment” in the amount of $10,447,829 was made by Homedale on November 22.
On those grounds, the Ontario courts have appointed Rosen Goldberg Inc. as receiver of “all lands and premises” of the debtor — and namely, the 1.57-hectare development site at 253 Queen Street East in Brampton. The receivership order went into effect on February 8, 2024.
The development slated for 253 Queen Street East has been in the works since 2019, and was expected to roll out in two phases. According to the developer behind the project, U Developments, the site was anticipated to evolve from a low-rise commercial plaza and surface parking lot into a high-density, mixed-use community consisting of three high-rise towers. Those towers were approved this past fall at 32, 33, and 38 storeys in height.
Between those trio of towers, a total of 1,026 residential units were planned, as well as 8,154 sq. m of office space and 1,860 sq. m of retail space.
The project drew in the likes of BDP Quadrangle — a rather high-profile architectural firm based in Toronto — as well as award-winning landscape designers DTAH.
But, as it turns out, U Developments’ plans haven’t exactly, well, gone as planned.
The receivership documents initiated by Homedale state that the mortgage taken on by U Developments was amended on two occasions to extend the maturity date of the loan and increase the interest rate to 8% per annum, payable in quarterly installments of $200,000 on August 2, 2023, November 2, 2023, February 2, 2024, and May 2, 2024. The initial terms for the loan, taken out in May 2018, involved a term of five years with interest at 3% per annum under a first-ranking vendor take-back mortgage.
After receiving notice from its banker on November 7, 2023 that stop payments had been placed on the first two of those installment cheques, Homedale opted to pursue a receivership request around a month later.
In addition, the court documents say that the property in question is subject to a subordinate mortgage in the principal amount of $2M registered in favour of Sky Mortgage Corporation. Sky Mortgage is also in financial default.
U Developments did not respond to STOREYS’ request for comment on the matter. However, it is worth noting that the Toronto-based development company has a number of completed projects in its portfolio — those include 133 Hazelton and 181 Davenport in Toronto, as well as 320 Bronte in Oakville — in addition to several others that are planned.
