It's a sunny day in June, and Harry Stinson is in his usual state of overdrive. His downtown Toronto hotel-condo, 1 King West--more than 570 furnished suites packed into the historic 13-storey Dominion Bank building and a new, impossibly thin-looking 51-storey tower next door--is slated to open in August. The interior, however, doesn't look close to being finished: Only two suites are decorated and furnished, metal studs stand exposed on the upper levels, and construction workers huddle here and there, poring over plans.
As he ushers a visitor around the building, Stinson lingers to gaze proudly around the soaring ground-level banking hall. Gilded crests of Canada's provinces are plastered on the 32-foot-high ceiling. This is to be the grand dining room of the Dominion Club, the private preserve of residents, hotel guests and paying members. But Stinson is griping as well. He had wanted a six-storey hanging garden in a sky-lit atrium between the bank and the tower--"the Indiana Jones Lost World," as he describes it. His partner and financial saviour, theatre impresario David Mirvish, kiboshed the idea. "Missed opportunities," Stinson grumbles.
Stinson views 1 King West as a springboard to establishing himself as a brand, à la Donald Trump. "We hope to build from it quite a large--I don't want to say empire--but a network of iconic properties, iconic destination properties," he says. He's already preselling units in the Sapphire Tower, an even larger 90-storey hotel-condo he wants to build just down the street from the proposed 70-storey Trump Tower. When you think of the all-glitz all-the-time Trump brand--the suits, the hair, the TV series, the blondes--the comparison seems more than a stretch. Stinson doesn't appear iconic as he walks toward his sales office in the noonday sun. Pale and thin, and still oddly boyish-looking at age 52, he's wearing baggy brown pants, a baggy long-sleeved brown shirt and a pair of Wallabees. In lieu of a briefcase, he carries a canvas shopping bag.
Many people in the Toronto real estate business doubted he could get 1 King West built at all. But thanks to a hot property market, he's sold 97% of the suites to individual buyers and investors; the unsold, unfinished units include a three-storey penthouse and another penthouse that occupies an entire floor of the tower, both priced at $6.4 million. Trump's far more lavish Toronto hotel-condo project, and others by Ritz-Carlton and Four Seasons, have yet to break ground (see page 44).
So, is Stinson satisfied? No, he's pushing his luck. Word on the Street is that his relations with Mirvish were chilly, that Stinson had feuded with the project manager in charge of construction, Peter Kofman, and that 1 King West is late and over budget. Who spreads the gossip? Well, some of the most colourful stuff comes from Stinson himself as he passes on what he figures advisers have been telling Mirvish for years: "'Stinson's just a salesman. If you let him control money, he'll waste it all over the place. And he has absolutely no ability to manage this long-term. This leasing program, this hotel concept is a joke. It'll never work. So, your best bet here, your most prudent strategy, is to control costs so that you can minimize the damage. Basically, limp across the finish line.'"
This candour is typical Stinson. There's no need to guess about his dreams or insecurities--he'll tell you flat out. It's entirely unbusinesslike, and entirely refreshing and engaging. Unless, of course, you're his business partner.
Indeed, when I reach Mirvish by phone, he's guarded, unwilling to engage in any naysaying about Stinson, and effusive about the building. "It's a great addition to the skyline of the city," he says, adding that he is "expecting to make money" from the project. True, he won't be involved in Stinson's Dominion Club, but he's glad the bank building has been preserved: "I'll be able to go for breakfast there, or dinner one day, with my children, and say I had something to do with this."
Admire it or not, 1 King West is one of the most audacious towers to pop up on Toronto's skyline, or any other city's in North America. And the manic force behind it is one of the unlikeliest developers ever.
At heart, Stinson has always been an entrepreneur. His first job was in the food and hospitality business, when, at age 8, he and his cousin Jamie ran a floating restaurant, selling pop and homemade bread from a rowboat at the family cottage north of Toronto. Stinson says the business became "economically non-viable" when they motorized the boat--the cost of gas ate up profits.
He opened his first restaurant in 1972, and an odd one it was for the time. The Groaning Board sold what was then known as "health food." Smokers were not welcome. Competitors told Stinson he was nuts--roughly 60% of adults smoked in those days. "My response to that was, well, 40% don't smoke." A couple of years later, he introduced Toronto to the Mad Hatter's Tea Party, a kids-only restaurant. Again, he figured there was an unserved market: Parents often take children out for birthday dinners, but noisy kids irk restaurateurs, and parents really don't want to be there anyway. For $10 a head, children were picked up in a refurbished red hearse equipped with a TV set and dropped at the restaurant, which operated like an assembly line: open gifts, pillow fights, bumper cars (the cars were old laundry tubs), electronic games (Stinson bought them used). Stinson presided over the whole show in a top hat.
Both restaurants were successes, but it was with real estate that Stinson found his true calling. As with restaurants, he found a niche and jumped in, establishing the first agency in Toronto specializing in condo resales in the mid-1980s, a time when Toronto's housing market was taking off. After the bubble burst in '89 and prices plunged, Stinson remained Toronto's "king of condos."
It was at about this time that he began eyeing a 100-year-old factory in Toronto, once the home to a confectioner that made Rockets and Fizzie Hearts. Located in what was then a rundown neighbourhood, it was way beyond the fashionable stretch of Queen Street West. Stinson figured there was an untapped demand for upscale New York-style lofts, like the ones showing up on Hollywood movie sets. With Metrontario Group, the owners of the building, he presold 97 of 120 units in the rechristened Candy Factory. Even so, the "suits"--as he still calls the bankers that refuse to embrace his vision--wouldn't lend him money, many having been burned financing speculative condo construction in the previous decade. They framed their response as a Catch-22: "There's no proven evidence there's a market for lofts because there aren't any successful loft projects."
Brad Lamb remembers it differently. Lamb had been Stinson's sales partner in the condo brokerage before founding his own firm, Brad J. Lamb Realty Inc., in 1995. According to Lamb, Stinson presold the Candy Factory units cheaply in an effort to cover the upfront building costs, which climbed as Stinson mucked with the design. "He suffered from change-itis," says Lamb. The owners of the building lost patience and locked Stinson out in late 1996. Half the sales evaporated, and Lamb was hired to reclose.
Lamb is a fan of Stinson's drive and creativity, but he thinks he should ditch the haphazard wardrobe, the shaggy hair and the underdog shtick. "People who lend money make a lot of judgment calls based on character, image and appearance," says Lamb. "I tell all my salespeople, 'Live in a basement apartment, but when you leave home, you have to look like you're successful so people will believe you are.'"
Stinson lost everything--his collection of antique cars, even his small midtown condo, which he shared with his wife, Linda Panning. "The bank basically pushed me out of it," says Stinson. "I was dealing with a pinhead guy trying to clean the file off his desk."
The Candy Factory debacle couldn't have come at a worse time for Stinson. He'd just agreed to buy a thin little building on King Street West, home to the Nag's Head Tavern. The bar, which had been in residence for almost 50 years, was a watering hole for a certain type of boisterous Bay Streeter. Currency dealer Albert Friedberg bought the building in the mid-1990s and occupied the main floor. He had thought about renovating the rest, but the roof was full of holes and the upper floors were close to collapse.
To Stinson, the site--minus the tavern--held huge promise. For only $2.9 million, he had a plot of land with extensive air rights just steps away from Bay Street. On the narrow lot--180 feet long and just 29 feet wide--he proposed the construction of a 50-storey glass condo called "the Sliver." The deal saver: In light of Stinson's financial problems, Friedberg agreed to let him delay payment. Then, in late 1999, Mirvish signed on.
At first glance, David Mirvish, 61, seems as far along the spectrum from Stinson as you can get. The tall, soft-spoken son of Toronto discount department store and theatre legend Ed Mirvish cultivates the image of an aesthete. But the theatre is also a business, and it has involved Mirvish in real estate development. When he and his father brought the megamusical Miss Saigon to Toronto in 1993, they built the 2,000-seat Princess of Wales Theatre on King Street West, at an estimated cost of $50 million, to accommodate the climactic helicopter scene.
"I'd been aware of Harry for many years and thought he had very inventive ideas," says Mirvish. "Bit by bit, I seemed to become more involved." He liked the notion of more people living and staying downtown, close to his theatres. The Mirvish imprimatur gave the Sliver instant credibility with lenders. The Caisse de dépôt et placement du Québec handed over $90 million in financing, and Mirvish himself invested a substantial sum. How much? "Lots," he says. "Seven-figure lots."
For the first couple of years, however, the Sliver was little more than a few architectural renderings, a Styrofoam model and Stinson sitting in a street-level sales office. The concept seemed to change every few months. In 1999, Stinson rechristened the project the Sliver Lofts, proposing to fill the tower with two-storey units ranging from 1,000 to 3,000 square feet--"real movie set" showpieces, as he described them at the time. Veteran Toronto architect Stanford Downey--his CV includes the ambitious renovations of the Hotel Macdonald in Edmonton and the King Edward Hotel in Toronto--was hired to make sense of the concepts.
To widen the tower, engineers wanted to buy a light-well, part of the Dominion Bank property next door. The Mirvish family had dealt with the Toronto-Dominion for years, and David approached bank CEO Charles Baillie, who initially put him off. But as TD moved ahead in a merger with Canada Trust, the bank relented, selling the whole building for $22 million.
This new twist opened up grand possibilities. Stinson envisioned a hanging garden in the atrium that, as he told a reporter, would "eat the toxins in the air and convert them into oxygen." He talked of creating a decadent Citizen Kane apartment, "with a sensual Roman bathroom." Mirvish considered turning the main hall into a 500-seat theatre and naming it after his father, Ed, and mother, Anne--ironic, given that the family used to send daily cash receipts to the bank. It reminded Mirvish of one of Liberace's jokes: "You know that bank I keep my money in? I bought it."
t's late July, two weeks before the opening of the condo--now renamed 1 King West--and Stinson is about to face a roomful of people who bought suites in the development. Some of them have endured years of delays and design changes. All of them have put down a 20% deposit, and they want to see some income. Stinson, who normally works until after midnight, didn't sleep at all last night, and it shows as he walks to the stage in the ballroom at the downtown Hilton. His cheeks are darkened by a five o'clock shadow, and he's wearing his usual baggy pants and billowy shirt. Tonight, perhaps understanding the importance of the event, he's made a concession to business attire: He's wearing a tie.
Tired as he is, he's full of geeky energy as soon as he hits the stage. "Tonight's meeting is about the future of 1 King West," he announces. About 50 people who will staff the building, all hired in recent days, are paraded through the room. Stinson says he's already paying them by the hour at his own expense. "If you're worried about a month's condo fees, folks, I'm worried about an hour," he quips. His patter continues for a half-hour uninterrupted, as he deftly hypes the hotel and promises to deal with any complaints.
Afterward, one buyer, a veteran Toronto investment adviser, is impressed by the spin, although he's still skeptical that the suites will produce enough income. "You don't bullshit a bullshitter," he says with a laugh. He's thinking of selling his suite quickly in the still-hot downtown real estate market. As he looks around the room, however, he figures most buyers will stick with Stinson, at least long enough to see what happens next.
The project Stinson and Mirvish envisioned early on has changed dramatically. The theatre is gone. So is Stinson's tower-of-duplex-condos concept, as well as the decadent Citizen Kane lair. As the hotel component of the project grew, the suites got smaller. Now, most are a compact 450 square feet or so, comprising a bedroom, bathroom, sitting area and small kitchen.
Many of the changes were due to market forces. Four or five years ago, even at around $400 a square foot--prices that seem cheap now--it was hard to attract enough high-end buyers to a building that contained only large condos. Mirvish and Stinson entertained the idea of erecting a conventional hotel. It could generate ongoing revenues, but it would take years for those revenues to come on stream, and room rates would have to be high enough to recover upfront capital costs and generate an operating profit. The answer: combine condos with a hotel, and presell suites to pay some or all of the upfront costs.
For architect Stanford Downey, that meant going from two units a floor to 12. There were also enormous engineering challenges. Even though he widened the tower to 45 feet, 1 King West still takes honours as the tallest and thinnest residential tower in the world. "People just can't believe that it doesn't fall over," Downey says. To prevent that, the walls had to be thick--32 inches at the base and 16 inches at the top floors, well over twice as wide as a typical apartment building. There's also a set of 10 water tanks in the roof of the tower that will steady it when the wind gusts. To meet modern earthquake standards, Downey had to drive supports through the old bank building, all the while preserving its historic features.
Costs climbed with the complications and additions. To hear Stinson tell it, by late 2001, Mirvish was worried about losing a big chunk of his investment. Paraphrasing what Stinson says next as politely as possible, Mirvish then hired a hard-ass--project manager Peter Kofman. To hear Mirvish tell it, Stinson hired Kofman. "I didn't know Peter," says Mirvish. "This was someone Harry brought to my attention." To hear Stinson retell it, "Well, yes, I introduced Kofman, but David hired him." To hear Kofman tell it, Stinson hired him, but Kofman quickly realized a big part of his job was to "kind of watch herd over what was happening," on Mirvish's behalf.
Kofman, CEO of Toronto-based Projectcore Inc., is certainly familiar with big egos and the rough-and-tumble of the development world. He worked for Garth Drabinsky in the 1980s and early 1990s at both Cineplex Odeon and Livent Inc., and he supervised dozens of projects, including the Pantages and Ford Centre theatres in Toronto.
At 1 King West, Stinson complains that just about all of Kofman's economies--from skimping on china in the suites to killing the hanging garden--could annoy suite purchasers. Kofman, for his part, refuses to engage in any finger pointing. He says his role was always to include as many elements as possible in the building, within the economic boundaries that existed. "I've been through this my whole life," he says. "Every visionary fights for what he wants, and wants to put his signature on the bottom corner of the building. That's the normal tension that exists between the economic guys, the project guys and the guy who has the idea in the first place."
Downey offers a wry smile when asked about the clash of visions. He met weekly with Stinson, Mirvish and Kofman for years. "We've all had our moments," he says.
n the last Friday in July, 1 King West is at the finish line, although not quite across it. Stinson had hoped to open 75 to 100 suites this weekend as more than a million U.S. visitors pour into Toronto for the annual Caribana Festival. Instead, he, Mirvish, Kofman and a handful of advisers are meeting in Mirvish's offices next to the Princess of Wales. Mirvish still hasn't transferred title to 1 King West's common areas and facilities--including the Dominion Club--to Stinson's building management company, or agreed on the terms for doing so. Stinson is worried: Could he get pushed out of another project? Before the meeting, he says, "I'm not saying anyone has an agenda right now."
Afterward, however, both Stinson and Mirvish are in bliss mode. Mirvish has given Stinson more time to pay for the Dominion Club and the other areas, and he may hang on to some unsold suites, knowing there's a better chance of selling them when the project is complete. He's also impressed by Stinson's hotel team, which saves investors the hassle of renting out the suites themselves. "This is the thing about Harry," says Mirvish. "He goes far beyond what is promised." The 1 King West marketing material touts the building as "designed to operate in the spirit of the classic 19th-century 'apartment hotels,' which provided superior and personalized service to long-term residents for whom their suite was a city 'pied-a-terre,' and one of several homes." Amenities include 24-hour room service, high-speed internet and a private dining room in the bank's old basement vault for Dominion Club members. Stinson figures the hotel will be perfect for movie people or executives working in town for weeks or months at a stretch. (At least one wag on Bay Street envisions other uses: "We call them lunch-fuck suites.")
On paper, at least, early purchasers have already made money. When Stinson started selling in 1998, the smallest suites were priced near $140,000. In July, the smallest remaining suite, just 380 square feet, was listed at $237,900. But both the hotel and the Dominion Club also have to earn an operating profit if Stinson is to attract investors to the Sapphire and his other as yet unplanned "iconic properties." To do that, he's created a new arrangement in Toronto, but one that is common in the U.S. and in some Canadian resorts: After selling suites, he will manage the rentals and housekeeping, all for a monthly fee. Stinson is encouraging owners to put their units in a revenue pool. Nightly receipts will be shared, based on the size of the units, even if an individual unit isn't occupied on a given night.
Stinson views the Dominion Club as the "jewel in the crown." In addition to 1 King West residents and guests, he's trying to get 3,000 people to pony up the $7,500 initiation fee--soon to climb to $10,000. "Join Toronto's business leaders today," say billboards surrounding the building. The early buzz is skeptical. Establishment haunts like the Toronto Club and the York Club don't advertise for members. They don't tout easy access to the subway as a selling point. They don't even have signs with their names out front.
Compared with the proposals for the Trump and Ritz-Carlton developments, Stinson's hotel and club look so, well, retail. The mid-market strategy has advantages, though. The hotel-condo concept is sweeping the U.S., and according to Jeff Boland, director of hospitality and tourism at Colliers International Realty Advisors Inc. in Toronto, plenty of wealthy but not super-rich baby boomers in their 40s and 50s are looking for places to "park wealth." Investing in hotel or short-stay condo suites allows them to participate in the real estate boom. In the Sapphire Tower, apart from a handful of multimillion-dollar suites, most units are priced from $200,000 to $1.5 million.
But Stinson doesn't have an international brand. That makes it hard to attract international investors, especially ultrawealthy ones who are, in any case, more apt to buy in U.S. cities like Miami and New York. He doesn't have a global marketing and reservation network either. Also, if interest rates climb substantially, those mid-market investors may drift away. With the Sapphire, Stinson hasn't bothered to try to wheedle big money out of banks and other institutional lenders. Their caution annoys him to no end. "The cost of risk aversion is far greater than the cost of proceeding," he says.
Maybe it's time for him to invest in some suits.
Whose is Biggest?
What Toronto apparently needs to make it more world-class are more superluxurious downtown hotel-condo towers with suites selling for a million bucks or more. A handful have been proposed in recent years, each more fabulous than the one before. These three are scheduled to open in 2009.
Trump International Hotel & Tower, Toronto
Tale of the tape 70 storeys, 324.29 metres tall
The gimmick With the addition of the ersatz Chrysler Building spire, Trump's tower will be the "tallest residential building in Canada"--a whole three metres higher than Harry Stinson's proposed Sapphire Tower around the corner (see below)
The bucks The 265 hotel rooms and suites start at $700,000. The 109 apartments range from $1.7 million to $15 million, the latter being the sticker price of a three-level penthouse
The bling In the 18,000-square-foot spa, owners and guests will have tired muscles kneaded back to life; two Mercedes S-Class limos wait on-call. The architectural drawings include no ballrooms: These attract conventioneers, wedding parties and other riff-raff
Sapphire Tower
Tale of the tape 94 storeys, 322 metres tall
The gimmick The tallest residential building in Canada, at least it was until it was Trumped The bucks Of the 1,135 suites, the entry-level is priced between $200,000 and $300,000; mid-levels will go for between $500,000 and $1.5 million; the eight penthouses will sell for $7 million each
The bling Spa, pool and greenhouse; a restaurant overlooking City Hall; high-end convenience market; helicopter pad for quick shuttles to Pearson
The Ritz-Carlton Toronto, The Residences at the Ritz-Carlton
Tale of the tape 53 storeys, 213 metres tall
The gimmick From the 26th floor upward, the south wall slopes forward, giving the building a Leaning-Tower-of-Pisa aesthetic
The bucks While the 267 hotel rooms and suites are not for sale, the 135 apartments are: Prices climb from $700,000 all the way up to $11 million, the latter for the top-floor penthouse
The bling Toronto's first official five-star hotel; the base of the building is home to ballrooms and an expansive 23,000-square-foot spa, all surrounded by glass "to create a sense of interaction between the street and the lobby." Most floors restrict the number of apartments to four