Rendering of The Buckingham building at the Grand Central Mimico project in west-end Toronto. Vandyk's insolvency filing does not include two of it's larger projects: Vandyk-The Buckingham South-Grand Central Ltd. and Vandyk-Backyard Queensview Ltd.Vandyk Properties
Lenders who are owed a total of more than $203-million have applied to appoint a receiver to manage several housing projects owned by Toronto-area real estate developer Vandyk Properties.
Vandyk is just the latest casualty of a treacherous environment for real estate development that so far this year has seen high-profile insolvency proceedings begin for unfinished projects from Coromandel Properties in Vancouver, StateView Homes in Woodbridge, Ont., and The One in Toronto, widely believed to be Canada’s tallest residential condo project.
KingSett Mortgage Corp. and Dorr Capital Corp. submitted an application Monday in Ontario Superior Court of Justice asking that KSV Restructuring Inc. be appointed as receiver to take over the management of Vandyk-UPtowns Ltd.; Vandyk-Heart Lake Ltd.; Vandyk-The Ravine Ltd.; Vandyk-Lakeview-DXE-West Ltd.; and 2402871 Ontario Inc.
The insolvency application covers five projects in the Greater Toronto Area, which include 1,757 unbuilt homes in a mix of apartments, townhomes and detached houses. Of those, 830 have been sold to preconstruction buyers.
“The applicants have lost all confidence in the debtors’ management to continue to satisfy the debtors’ significant obligations, obtain refinancing, manage the property and complete the projects in a timely manner or at all,” the companies say in the filing.
KingSett claims it is owed more than $169-million and Dorr is seeking repayment of $34-million.
Vandyk did not respond to requests for comment, while KingSett declined to comment.
Company founder John C. Vandyk has worked in the real estate and land development industry for close to 40 years, primarily focusing on low-rise townhouse and detached homes. In the past decade, his company embarked on an expansion into mid-rise and high-rise condominium projects, taking on hundreds of millions in debt to do so.
None of the projects are close to being finished. In the case of the UPtowns, preconstruction buyers have been left waiting since 2017. KingSett’s application says the project is only about 28 per cent complete, and 329 of 342 planned townhomes have been presold.
In recent months, more than a dozen contractors have placed construction liens on several Vandyk projects demanding millions of dollars in compensation for unpaid work. In their filing, KingSett and Dorr allege that Vandyk stopped paying interest on some of its construction loans by July of this year, which prompted the lenders to issue demand letters for repayment of the loans in September.
In their application, KingSett and Dorr allege the “diversion or misuse” of some of the loaned funds and purchaser deposits, as well as the failure to discharge liens placed on the properties.
The filing does not include two of Vandyk’s larger projects: Vandyk-The Buckingham South-Grand Central Ltd. and Vandyk-Backyard Queensview Ltd., which together include just under 1,000 unfinished condos with hundreds of preconstruction buyers. Both projects also face court demands by contractors for unpaid work.
Property records show the Buckingham South-Grand Central Ltd. site – which is adjacent to the Mimico GO Transit station and was announced as a transit-oriented community by provincial agency Metrolinx – has more than $166-million in loans registered on title by MCAP Financial Corp. and Westmount Guarantee Services Inc.
Notably, the filing shows that on Nov. 3, KingSett took over a $112-million loan MCAP had extended for the UPtowns project, for which it was owed $23-million.