Dundas West Site With Planned 22-Storey Tower To Sell Through Receivership

A purchase agreement is in play for a development site at 5507-5509 Dundas Street West in Etobicoke, which was placed under receivership in April. A motion that was heard by a judge on Tuesday describes a successful stalking horse bid from Centurion Acquisition Corporation, although the amount of the bid has been withheld in the court filings.

If you're familiar at all with the receivership proceedings, you might know that Centurion's name has been attached to the case from the jump, and as such, their interest in ownership of the land is hardly out of the blue. In fact, it was Centurion Mortgage Capital Corporation that initiated receivership proceedings against Dundas Shorncliffe Limited Partnership and Dundas Shorncliffe Ltd. (the site owners) in August 2024.

According to the July 29 motion, BDO, in its capacity as receiver, is petitioning the Ontario courts to approve Centurion's agreement of purchase and sale, and to authorize that proceeds from the sale be used, in part, to make a distribution to Pesciolino Holdings Inc., which has first- and third-ranking mortgages registered against the 5507 Dundas Street West property, and a second-ranking mortgage registered against the 5509 Dundas Street property.

Speaking to the site in its current state: it's nearly vacant, save for an unoccupied single-storey commercial building. It has zoning approvals in place to to permit a 22-storey, 242,187-sq.-ft mixed-use building with up to 265 residential rental units and 176 parking stalls.

Avison Young/Turner Fleischer Architects

The Receivership And Sales Process

When receivership proceedings against Dundas Shorncliffe Limited Partnership and Dundas Shorncliffe Ltd. were initiated last summer, Centurion alleged that the debtors — which appear to be single-purpose real estate companies opened and operated by Toronto-based Contessa Developments — were owing some $17.5M related to the development site at 5507-5509 Dundas Street West, and on those grounds, requested the courts appoint a receiver over the companies on August 4, 2023.

Centurion's request was not immediately obliged. In the months that followed, a receivership order was “held in abeyance” to allow the debtors the opportunity to refinance or sell the property, according to a statement from BDO. Ultimately, the debtors were unable to secure a sale.

On March 26, 2024, a sworn affidavit of the Assistant Vice President of Mortgage Investments and Joint Ventures for Centurion Bob Vavaroutsos put the final nail in the coffin, so to speak, for the Dundas West site. In the affidavit, Vavaroutsos confirmed that the debtors had not repaid the $17.5M owing to Centurion by that time, and his statement put BDO's receivership order into effect on April 14.

The court filings also showed that, in addition to the $17.5M owing to Centurion, the debtors were also owing $5.43M to Pesciolino and $1.574M to Mapleview Pear Tree Inc. for a total debt of $24.504M as of April 2.

About a month after the receivership order went into effect, BDO petitioned the courts to approve the sale and investment solicitation process (SISP). The terms of the SISP included a stalking horse sale agreement set at $9M. According to BDO, this means that “prospective bids must exceed the stalking horse offer by a minimum of $100,000 in order to be considered for acceptance by the receiver.”

The July 29 motion shows that the sales process resulted in three offers, including just one “qualified bid,” which was up against Centurion's stalking horse bid at a live auction. During the auction, Centurion “improved” its stalking horse bid and was deemed to be the successful bidder. BDO is now seeking an approval vesting order from the Ontario courts, which is a condition on closing per Centurion's improved stalking horse agreement.