Mizrahi Developments Ottawa project enters restructuring

If you scroll through the Mizrahi Developments website, it may appear that the company has several ongoing projects (across Ontario, but mainly in Toronto), but as we found out, several of these projects have been or are underway. financial problems to one degree or another.

It’s not just The One – although that is by far the highest-profile project – there are also projects in Yorkville and Vaughan, both of which are now sold out, as well as Mizrahi’s 12-storey, 93-unit project at 1451 Wellington. in Ottawa, known as The Residences on Island Park Drive.

The order dated October 15 states that MNP LLC was appointed curator of the project within the framework of Law on Agreement with Creditors of Companies after Mizrachi apparently filed for creditor protection. Court documents state “a maximum principal amount of approximately $25 million to be provided to TCC Mortgage Holdings Inc.” (…) in accordance with the DIP loan agreement, which must be concluded before the first hearing.”

Additionally, they say Mizrachi is seeking “interim funding of up to $2,345,000.”

The documents also note “unaudited financial statements” which indicate that the majority of Mizrahi’s asset base consists of land acquisition and development costs, which are estimated at $85 million (as of December 31, 2023). It also claims that the Ottawa project spans “previously two separate properties,” including 1451 Wellington Street West and 1445 Wellington Street West (both in Ottawa). The two properties were merged on October 26, 2023.

According to court documents, “the project is currently in the final stages of construction with further work remaining to be completed,” and to date approximately 72 of the 93 units have already been pre-sold. Deposits were collected from approximately $14.8 million in pre-sale funds.

For reference, the Ottawa project started in 2015 and was supposed to be completed by November 2023. and cost overruns on goods and services,” according to court filings. “As of October 9 (…) the project is approximately 85% complete, with most of the structural and mechanical work already completed.”

STOREYS reached out to Sam Mizrahi for comment on the proceedings and he said that “Mizrahi Development Group is committed to ensuring that all of its projects and developments consistently exceed client expectations without compromising standards and quality.” He added that his company does not “compromise.” on its values ​​and will always remain true to its vision.