Urban North Project In Barrie Sold Via Receivership, Presale Contracts Terminated

After a relatively short and uneventful court-ordered sales process, the Urban North Townhomes project that was placed under receivership earlier this year has officially changed hands, according to filings in Ontario Superior Court.

The Urban North Townhomes project is planned for 700-780 Mapleview Drive East in Barrie and was envisioned as a collection of 1,057 units across 50 acres of land, delivered in six phases.

Construction was in advanced stages on the first and second phases, but had yet to commence on the remaining four phases, at the time the receivership came into effect.

The property was owned by Mapleview Developments Ltd. and beneficially owned by 2552741 Ontario Ltd. and Pace Mapleview Ltd., the latter of which was controlled by Pace Developments.

Debt and Disposition

As first reported by STOREYS, Mapleview Developments Ltd. and the Urban North Townhomes project was placed under receivership on March 21, at the request of KingSett Capital.

In September 2022, the two sides entered into a loan agreement that would see KingSett extend seven separate loan facilities to the developers for the aggregate maximum principal amount of $105,762,112. The maturity date of the loan was extended several times before finally maturing on February 1, 2024, on which KingSett Capital said it was owed $47,099,842.63, plus interest.

KingSett issued a formal demand for payment and a notice of intention to enforce security in mid-February and subsequently initiated the receivership proceedings after Mapleview Developments Ltd. was still unable to pay.

On May 30, the Ontario Superior Court then approved the sales process, which saw the property marketed to 277 prospective buyers, according to the Receiver. However, only five parties reached the stage of signing the non-disclosure agreement and no qualified bids were ultimately made for the project.

As a result, by default, the property was sold to the stalking horse bidder whose bid served as the basis of the sales process. The stalking horse bidder and new owner of the Urban North Townhomes project is Burlington-based Dunsire Homes Inc. — also known as Dunsire Developments — which the Receiver notes is an affiliate of Aggregated Investments Inc., the holder of the second-ranking mortgage behind KingSett.

The purchase price was not specified, but the Receiver notes that it is the sum of the outstanding amount owed to KingSett, the outstanding amount on the second-ranking mortgage, a charge of $3,285,000 that was previously transferred to Aggregated Investments, $400,000 allocated for post-closing costs, and the costs to be paid to the Receiver.

The Receiver previously noted that one of the requirements of a qualified bid was a deposit payment of at least 10% of the purchase price and has also noted that Dunsire Homes Inc. paid a $10 million deposit, suggesting the purchase price was somewhere in the realm of $100 million.

On August 21, the Ontario Superior Court approved the sale to Dunsire Homes Inc. and also approved a distribution of $50,257,407.85 to KingSett Capital. Additionally, the debtor companies — Mapleview Developments Ltd., 2552741 Ontario Ltd., and Pace Mapleview Ltd. — were assigned into bankruptcy.

The Pre-Sale Purchase Agreements

As a condition of the purchase and sale agreement, all the pre-existing pre-sale purchase agreements have been terminated.

In a report to the court in May, the Receiver noted that approximately 494 units of the Urban North Townhomes project had been pre-sold, but have yet to close, with 321 pertaining to stacked townhouse units and 173 pertaining to freehold units.

In an update to homebuyers dated July 30, the Receiver said that deposits paid for stacked townhouse units are fully insured by Westmount Guarantee Services Inc. and no action needs to be taken. Regarding the freehold units, the deposits are only partially insured by Tarion, who offers coverage of up to $60,000 on units sold for $600,000 or less and coverage of up to 10% of the sale price (to a maximum of $100,000) pertaining to units sold for over $600,000. For freehold unit buyers, they will need to initiate a deposit claim with Tarion after receiving a Notice of Disclaimer pertaining to their pre-sale purchase agreement.

While they will likely be able to recover most of their deposits, the termination of the purchase agreements will likely be frustrating to many buyers, who have had a turbulent experience since even before the receivership.

In 2021, Pace Developments informed approximately 70 pre-sale purchasers that it would be cancelling their purchase agreements unless the buyers paid an additional $100,000. Pace Developments — founded by Dino Sciavilla and led by him and his wife Yvonne — cited pandemic-induced cost increases, but the decision nonetheless drew a public rebuke from Premier Doug Ford, who called the attempt to squeeze more money out of buyers "unacceptable."

The termination of all the purchase agreements as part of this transaction now essentially does the same thing, allowing Dunsire Developments to sell the units at newer — presumably, higher — prices. As noted by the Receiver, however, because no other qualified bids were made for the project, there was no other option.

Founded by Shawn Keeper, Dunsire Developments had a project placed under receivership in 2017, but was then re-acquired by Keeper in 2018 during the court-ordered sales process. That project, the White Cedar Estates, is now listed on Dunsire's website as completed.