While it’s not unusual these days to see a development project over-budget — you could argue that soaring material and labour costs all but ensures it — it’s hard not to raise an eyebrow at one that’s around $60M overrun in Mississauga.

To make a bad situation unequivocally worse, the development in question — an industrial and residential undertaking that’s made some headway at 759 Winston Churchill Boulevard, 688 Southdown Road, and 2226 Royal Windsor Drive — has been mired in receivership proceedings since April, with Kingsett Capital alleging debt exceeding $363M. Those proceedings have recently culminated into a receivership order, which was granted by the Ontario courts on Thursday, May 30, 2024.


The order appoints KSV Restructuring Inc. 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.”

Lender Alleges Staggering Debt

A sworn affidavit of Daniel Pollack, dated February 20, 2024, 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.”

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 also says that it is unclear to KingSett “the extent that the proposed residential re-zoning efforts are necessary or if they constitute the best use of the Southdown Lands or Royal Windsor lands.”

In any case, 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 Churchhill site owner — as well as a $165M loan to the Southdown owner and a $35M loan to the Royal Windsor owner.

“Several Events Of Default”

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.

As we’ve seen in the recent past, the next step for a development site under receivership is for the property to be sold off to the highest bidder. It remains to be seen who will be brokering the sale.

On another note: had this project come to fruition, it would have been right up KingSett’s ally. As described in a February 20, 2024, document, KingSett has bought and sold approximately $5.1B of industrial property over the last five years, “and has extensive experience in major redevelopment/expansion projects across Canada.”

Industrial