It's been a long and arduous journey thus far, but the light at the end of the insolvency tunnel is now coming into view for The One, the high-profile high-rise tower in downtown Toronto conceived by Sam Mizrahi that has become the single largest project in the country to face insolvency in recent years.
After a months-long court-ordered sales process launched in June 2024 returned no buyers for The One, Toronto-based real estate company Tridel was selected in December as the developer to bring the troubled project to completion, as previously outlined by STOREYS.
Since entering into a term sheet at that time, the Receiver, senior lenders, and Tridel have been finalizing the definitive agreements of the contract, a credit agreement to finance the completion, and a plan to shift the receivership proceedings to creditor protection proceedings, all of which are set for court approval on Thursday, April 17.
The Tridel Contract
"Tridel has devoted significant time and effort to prepare a revised Project construction schedule, cost to complete, procurement schedule, and the related budget, which has been finalized in consultation with the Receiver, the Cost Consultant, KDC, and the Senior Secured Lenders," said the Receiver in a report dated April 3.
Tridel has also been assisting the Receiver with certain development management matters, commencing planning work on the sale and marketing plan for the residential component, formulating an operator selection process for the hotel component, as well as working with SKYGRiD — who took over The One in March 2024 after the project was placed under receivership in October 2023 — on a construction management transition plan.
The finalized agreement would come into effect 10 days following court approval and see Tridel serve as the project manager, construction manager, and sales manager of The One. For those responsibilities, Tridel will receive a fee of, respectively, 1.5% of total projects costs, 2.85% of the hard costs of construction, and 2.0% of residential unit sales revenue.
Several incentives are also in place for Tridel. As the project manager, they would earn an incentive fee based on a 25% share of any savings in the total project costs, up to a maximum of $6 million, as well as an incentive fee based on a 10% share of any savings in relation to the Tarion Warranty budget.
The (Second) Reconfiguration Plan
Ahead of the sales process last year, the Receiver and senior secured lenders came up with a plan to reconfigure the floor layouts of The One, in what they said was an attempt to generate additional potential value.
As originally planned by Mizrahi Developments, The One was planned to include 415 residential units. Last year's reconfiguration plan increased the count to 503 units, by upping the amount of units on each floor beginning on Level 62. That reconfiguration plan was approved, but Tridel has now proposed a new reconfiguration plan that increases the amount of units on some floors and reduces the amount of units on others, bringing the final unit count for The One down to 476 total units.
A comparison chart of the previous and current reconfiguration plan for The One.
According to the Receiver, Tridel made this proposed reconfiguration during the bidding process and the change is "expected to optimize the number of larger Units in the Project while balancing the velocity of sales of such Units."
"The Reconfiguration Advisors analyzed the Tridel Reconfiguration Plan and, with the benefit of their input, Tridel prepared a cost benefit analysis of the Tridel Reconfiguration Plan to the Reconfiguration Plan, as well as the potential impact on the Schedule," said the Receiver. "Based on the Receiver's review, this cost benefit analysis indicates that the Tridel Reconfiguration Plan is anticipated to generate meaningful additional incremental value for the Project, with minimal impact on the Schedule."
As for the hotel component of The One, the previous agreement with Hyatt has been cancelled and JLL has been retained to serve as the advisor to find a new operator. That process is already underway and JLL is expected to return with proposals in a few months.
Construction Update
In its report last week, the Receiver also provided a progress update on construction, which has been continuing relatively steadily even after The One was placed under receivership on October 18, 2023.
When the project was placed under receivership, tower slabs in the superstructure had reached Level 42 and the window curtainwall of the building envelope had reached Level 11.
From the receivership order date up until March 31, 2025, tower slabs were poured on an additional 39 floors and it is now up to Level 81, while installation of the building envelope has advanced an additional 47 floors and reached Level 58.
Construction progress on The One in Toronto in 2023, 2024, and 2025.
Additionally, according to the Receiver, the standpipe for the fire suppression system has reached Level 80, the standpipe for water service has reached Level 57, gas service to the suites as reached Level 47, HVAC distribution has reached Level 67, and electrical main services has reached Level 66.
Although The One was once set to reach 91 storeys, it will now top out at 85 storeys as originally conceived. Concrete pouring has now commenced on the penthouse levels as of last month and is expected to complete with Level 85 in September 2025. Updated drawings reflecting Tridel's reconfiguration plan are currently in the process of being prepared ahead of a submission to the City of Toronto. The remaining structural components are then expected to reach substantial completion by November 2026.
Previously, the Receiver had estimated that overall completion of The One was expected in late-2027, but that has now been pushed back to early-2028.
As previously reported by STOREYS in November, construction was threatened by a potential lawsuit filed by Mappro Realty, but the Receiver, senior lenders, debtors, and Mappro have since agreed in principle to a settlement that would resolve the issue.
Creditor Protection Proceedings
A condition of the Tridel contract is that the receivership proceedings will be converted into creditor protection proceedings under the Companies' Creditors Arrangement Act (CCAA).
"In the view of the Receiver, Tridel and the Senior Secured Lenders, the transition to the CCAA Proceedings will best facilitate the implementation of the Transaction and the ongoing construction and completion of the Project, and will provide a better forum in which to market and sell the Units in the Residential Component and to operate, lease and ultimately sell each of the different components within the Commercial Component, all with a view to maximizing value and recoveries," said Alvarez & Marsal, who is currently serving as the Receiver and would serve as the Monitor in the CCAA proceedings.
If approved on April 17, the CCAA framework will also allow Tridel to sell the units as any developer would under normal circumstances, rather than being marketed and sold by the Receiver.
"Ordinary course sales by the Companies are anticipated to provide for higher Unit sale prices and are expected to better facilitate addressing certain regulatory issues relating to the sale of the Units, including with respect to working with HCRA and Tarion to ensure that all warranty and vendor licencing matters are appropriately dealt with," said the Receiver.
Rather than the usual 10-day initial stay period granted in CCAA proceedings (followed by extensions thereafter), the Receiver/Monitor will be seeking an initial stay period of 120 days, citing the fact that the project has already been under a court-supervised proceeding for over 18 months and the benefit of avoiding the expense of an additional hearing to seek an extension.
As part of this transition to CCAA proceedings, the Receiver is also proposing that the names of the legal entities associated with The One be renamed — Mizrahi Development Group (The One) Inc. will be renamed One Bloor West Toronto Group (The One) Inc. as one example — to "appropriately reflect that the Mizrahi Group is no longer involved in the construction or development of the Project."
