Just a month after a receivership order went into effect over a 27-unit townhome pre-con project known as Ajax Meadows, the development site at Rossland Road West and Harkins Drive has hit the market.
A sales brochure provided to STOREYS on Tuesday comes from CBRE, and describes the site as “a unique 1.8-acre infill development opportunity” with zoning by-law amendment and official plan approvals in place to permit a three-block stretch of townhomes, as well as a 9,410-sq.-ft. commercial building on the southeast corner of the site. Those approvals were secured back in December 4, 2017.
“Since then, the previous owner and current owner (Ajax Meadows) took the SPA through the approvals process and successfully obtained a draft site plan agreement with no conditions from the Town, however the agreement was never executed, thus the purchaser will need to update the agreement and confirm their financial obligations,” the brochure explains.
“It’s important to note that the Town is ready to stamp/approve the drawings to issue the site plan agreement as there are no outstanding comments left to address in the SPA application.”
With all of that said, an interested investor is not necessarily tied to the original plans for the Ajax Meadows site. The site is “vacant and un-improved,” with split zoning that would allow for maisonette dwellings, multi-attached dwellings, and home-based business on the western portion of the site, and “various commercial uses,” such as a convenience store, day care facility, office, service, and repair shop on the eastern portion.
In addition, a site-specific exemption has already been secured, and that permits additional retail and restaurant uses “as long as they do not exceed a gross leasable floor area of 2,691 sq. ft each.”
On top of all of that, the listing gets big points for location, location, location. Per the brochure, the development site is situated in the Central West neighbourhood of Ajax, which is projected to see a 9.6% population increase over the next four years.
“This positive population growth demonstrates there is a growing demand for homeownership in the area, increasing the desirability of this opportunity,” it says, later adding that the surrounding area is rich in family-friendly amenities, including parks, schools, and commercial plazas. The Ajax GO station is just a seven-minute walk away.
The Receivership
On April 22, 2024, the Ontario courts granted a receivership order over a real estate holding company known as Ajax Meadows, appointing TDB Restructuring Limited as the receiver.
Those proceedings were initiated by Vector Financial Services Limited amid allegations that Ajax Meadows had accrued $4.13M in debt, and that construction on the project, to date, “has not been commenced in any material fashion.”
The receivership application from TDB shows that Vector first advanced the funds sometime around October 2022. The loan was repayable by “no later than” November 10, 2023, with Sameer Khan listed as the guarantor.
After Ajax Meadows missed that deadline, the lenders “agreed to informally forbear from demanding on the loan for a limited period of time, in their discretion, provided that interest was kept current at the ‘step-up rate.’”
Despite that leniency, Ajax Meadows breached the agreement again in December 2023, and then again in February 2024, after “failing to remit a monthly interest payment” on both occasions. After the February 2024 instance, the debtor was informed that Vector intended to take “enforcement steps” unless payment was issued to Vector “immediately.”
Ajax Meadows never managed to come up with what was owed. What’s more, in mid-March in 2024, it came to Vector’s attention that Ajax Meadows had entered into an agreement of purchase and sale in respect of the development property. Had that sale been successful, the proceeds would have been used to repay the indebtedness owing to Vector.
That sale was contingent on a number of conditions, which were not met when push came to shove. According to Vector’s receivership application: “during discussions between Vector and Mr. Khan with respect to [Ajax Meadows] it became clear to Vector that, in Vector’s view, Ajax Meadows has an unrealistically high perception of the value of the mortgaged property, and that this misconstrued (and unsupported) valuation was likely to frustrate any attempts by Ajax Meadows to either sell the mortgaged property or refinance the Indebtedness in the near term.”
