FRIDAY,SEPTEMBER13,2019 | THEGLOBEANDMAIL O H3
L
amb Development Corp. has begun
offering deposits back to presale
buyers in a downtown Toronto
condominium apartment project,
according to documents shared with The
Globe and Mail.
A spokesperson for Lamb Develop-
ment, owned by and named for condo
impresario John Bradley Lamb, declined
to comment. As of Sept. 1, at least some of
the holders of agreements of purchase
and sale with Lamb Development Corp.’s
proposed 218-unit Bauhaus condo project
at 284 King St. E. have begun to receive
letters, asking them to either extend the
terms of the contracts or take their depos-
its back.
In recent years, thousands of presale
contracts for condominiums apartments
and townhouses have been cancelled by
developers, usually in a process that in-
volves applying to Ontario’s new-home
warranty regulator Tarion. There’s an al-
ternative to cancelling an entire project,
although it involves securing the co-oper-
ation of buyers.
“As it stands now, we do not believe we
will be breaking ground for at least 2
years, with an estimated completion date
of late 2025,” reads the letter Lamb Bau-
haus clients received. “Our date for waiv-
ing the municipal and provincial zoning
approval, 80 per cent sales achieved, and
approval for construction financing are
maturing September 1, 2019. We of course
cannot waive the conditions.”
The conditions referred to are clauses
that allow the buyers to walk away from
the project if the developer hasn’t met
deadlines. The Lamb letters offer buyers
an option: either extend the early termi-
nation date to March 1, 2020, or “opt out
of your deal and have your deposit re-
funded.” The letter directed buyers to con-
tact Lamb staffers Debbie MacDonald or
Jessica Russell. In recent years, Lamb has
taken a similar approach to projects that
faced planning delays: In 2018, presale
buyers in a downtown condo called Wel-
lington House received letters offering de-
posits back because “your unit no longer
exists,” thanks to planning changes to the
building that had eliminated several
apartments. Also in 2018, Lamb cancelled
a downtown condo project called The
James, later resold to buyers as The Wood-
sworth.
Land registry documents show that
Lamb Bauhaus Inc., a company created to
hold the land for Lamb Development
Corp., purchased the building and land at
284 King St. E. in August, 2016, for $10-
million, and immediately registered two
$6.5-million mortgages against the prop-
erty. The first was with Home Trust Com-
pany, which was to be due Sept. 1, 2019,
and charged 4.75-per-cent interest; the
second charged a much higher rate of
interest – 45-per-cent annual interest –
and was registered to Quincey Invest-
ments Ltd., Fort 1 Inc. and a variety of
numbered companies. The guarantors on
that mortgage were Jawad Rathore and
Vincent Petrozza, two of the principals in
Fortress Real Developments Inc., a pio-
neer in syndicated mortgages that loaned
$920-million from 14,000 public investors
between 2009 and 2017. A court-appoint-
ed trustee is now administering many of
those loans and trying to recover money
for the investors.
In February, 2017, a further $6.7-million
mortgage (charging 8-per-cent interest
over a five-year term) was registered
against the King Street property with
Building & Development Mortgages Cana-
da Inc., or BDMC, another lender connect-
ed to Mr. Rathore and Mr. Petrozza’s For-
tress.
But in 2018, Ontario’s financial services
regulator got court approval to transfer
control of BDMC to FAAN Mortgage Ad-
ministrators Inc., to act as receiver for the
outstanding $560-million in loans from
11,000 investors. FAAN has warned those
lenders, many of them ordi-
nary Canadians, may not be
fully repaid in many cases.
In reports to the court, FAAN
has said 24 of the 45 BDMC
loans it manages have ma-
tured, but the principal has
yet to be repaid and there
are a dozen projects that
face enforcement actions.
Lamb’s projects were fre-
quent recipients of Fortress
and BDMC money; FAAN
documents show that, as of
2018, several outstanding loans were regis-
tered to Lamb properties in Toronto. The
Wellington House project (also delayed,
awaiting city approvals) owed $6.3-mil-
lion to BDMC and $8-million to Cameron
Stephens Financial Corp.; the Harlowe
building (completed in 2019) had three
loans: $54.2-million with MCAP, $18-mil-
lion with Aviva and a third mortgage with
BDMC for $15.9-million. The Woodsworth,
formerly The James, had $4.2-millionowed to KingSett Capital Mortgage Corp.
and $5.7-million to BDMC. In December,
2018, Lamb paid $15,562,896 to settled the
Harlowe debt and in April, 2019, the court
approved a $4,842,541 settlement on the
James/Woodworth loan.
There are 110 lenders in
the Bauhaus syndicate loan
from BDMC, and over the
ensuing years there are mul-
tiple additions to the syndi-
cate of creditors on the For-
tress-connected loans, held
in trust by Olympia Trust
Company of Calgary and
Vancouver-based Computer-
share Trust Company of
Canada.
On Bauhaus, according to
paperwork filed with FAAN,
Lamb still owes $5.6-million to the BDMC
syndicated loan, $6.1-million to KingSett
Capital and $3.42-million to the 45-per-
cent interest Quincy group loan.
The Quincy loans have also undergone
some changes, most recently on Jan. 9
with Fort 1 Inc., controlled by Tonino (To-
ny) Amendola (who was president of FMP
Mortgage Investments, which surren-
dered its mortgage license in 2018) trans-
ferring its interest in the mortgage to370271 Ontario Ltd. and Massimo Giovan-
netti, president of Royal Canadian Mort-
gage Investment Corporation. Quincy In-
vestments Inc. is registered to 31 Densley
Ave., the same address as Access Restora-
tion Services run by brothers John and Joe
Gagliano. The Quincy group has appeared
as a lender in several Fortress-organized
projects over the years.
In July, 2017, Home Trust transferred its
Bauhaus loan to Kingsett, and rather than
being registered solely against the 284
King St. E. land, the loan from that point
on was also registered against dozens of
condominium apartments, many owned
by companies associated with Mr. Lamb.
Mr. Lamb has described a similar ap-
proach to securing debt in a podcast he
publishes on his website: In an episode
from June, 2019, he discusses his first
building project where he used his per-
sonally owned condos as collateral for
loans.
Despite being unwilling to comment
for this story, on his podcast, Mr. Lamb’s
offers candid views of the City of Toron-
to’s planning regime.
“Virtually every property is a site-spe-
cific zoning, so you never really know
what you’re getting ... you’re taking a
chance in Toronto,” he said. “In my case,
they never agree with what we want to
build – all our projects are slated to go to
the OMB.”
With Bauhaus, the city staff report on
his proposal to erect a 32-storey tower on
a narrow slice of King Street East said it
represented “overdevelopment of the
site.”
“The proposed development is inap-
propriate because the proposed height
and tower setbacks would cause excessive
negative impact on the adjacent 14-storey
residential building to the east and its out-
door amenity space in terms of shadow,
sky view, and privacy,” the report reads.
“The proposed development is also inap-
propriate because it would adversely im-
pact the adjacent property to the west,
does not provide new office space to re-
place the existing office space, does not
provide a sufficient amount of indoor res-
idential amenity space and does not pro-
vide a sufficient number of three-bed-
room units.”
Lamb’s most recent submissions note
that a planning approval has been granted
for a similar height building just steps
away: ODC Holdings (V) Ltd. won an OMB
ruling to build a 34- and a 36-storey towers
at 254 King St. E.
A hearing at the Local Planning Appeal
Tribunal on the rezoning of the project is
scheduled for Sept. 16.
Mr. Lamb also describes the drawbacks
of preselling a condo before having site
planning approved, a practice that has
been connected to several condo cancella-
tions in the GTA since 2017.
“In the past, I would always sell it in
advance of zoning, because I always felt
zoning would ultimately come,” he said.
“Now, I will never again sell in advance of
zoning ... because you just don’t know
when it’s going to happen.”LambDevelopmentdelaysTorontoproject
Somepresalecontractholders
withBauhauscondo
receiveletteraskingthem
toextendtermsortakerefund
SHANEDINGMAN
REALESTATEREPORTER
TORONTO
ALambDevelopmentlettertoholdersofagreementsofpurchaseandsalewiththeBauhauscondoprojectinToronto,seeninrenderings
aboveandbelow,saystheprojectwillnotbebreakinggroundforatleasttwoyears.RENDERINGS BY LAMB DEVELOPMENTWith Bauhaus, the
city staff report on
his proposal to erect
a 32-storey tower on
a narrow slice of
King Street East
said it represented
‘overdevelopment
of the site.’THE ACTIONThis two-bedroom-plus-den
corner suite is in an area saturated with
high-rises near Humber Bay Park, yet it
still found 16 interested shoppers during a
quiet period mid-July.
“It’s a relatively new building, so the
developer still had some units on higher
floors, but we weren’t in direct competi-
tion with other units while we were list-
ed,” agent Christopher Bibby said.
“In that pocket, the days on market are
typically higher than the downtown core,
so we’re not seeing things turn over in
under a week typically.”
WHAT THEY GOTOn the fourth floor of Jade
Waterfront Condominiums, this 878-
square-foot unit is a modern space with
an open den and a central kitchen, living
and dining area decked out with hard-
wood floors, walls of windows and sliding
doors to a balcony wrapped around its
south and west sides.
Six appliances, a locker and parking
complete the package.
Each month, $635 pays for water, heat-
ing, concierge, common media room,
gym, outdoor pool and rooftop deck.THE AGENT’S TAKE“One of the things that
made this unit so special was it had a very
efficient floor plan with two bedrooms,
plus a den and two baths in under 900
square feet,” Mr. Bibby said. “It had a great
design aesthetic, upgraded appliances
and a wraparound balcony looking out to
the lake that really drove up traffic.”
Buyers were also thrilled to hear that
those vistas will be protected. “There is a
lot of development in that pocket ... but
the land directly to the south of this
building is in the process of being com-
pleted as a City of Toronto park,” Mr. Bib-
by said.- SYDNIA YU
33ShoreBreezeDr.,No.410,Toronto
MIMICO
Asking price: $745,000
Selling price: $735,000
Taxes: not available
Days on the market: Seven
Listing agent: Christopher Bibby, Re/Max
Hallmark Bibby Group Realty
DONE DEAL
Strongwaveofinterest
incornerunitwithlakeviews
REALESTATE|