More than 200 condo buyers may lose homes after development fails

About200 people who bought condo units inan Etobicokehigh-riseproject maylose their homes after the developmentwasplaced into court-ordered receivership due tomassive financial problems.

The project, still only about 15per cent completesix years after it was first marketed to potential buyers, will now be sold off by the receiver in a bidding process.

The buyers who paid for the pre-sold condos 208 of the project's 242 units will get their combined $6.3 millionin deposits back.But the condos they bought and waited years to move intowill likely be sold off at much higher current market values by whomever steps in to complete the project.

Some of the original buyers had purchased their units as far back as 2011when Toronto homeprices were about half of what they are today.

Development's collapse financially 'devastating'to many buyers

Toronto condo lawyer Denise Lash says many of those buyers may now find themselves priced out of the market.

"It can be devastating" she told CBC Toronto, adding if they want to buy their units from the new developer, it's likely"they have to purchase at 2017 prices, not the prices they paid [years earlier]."

Lash says while "it's rare" for condo projects to fail in Toronto's red-hot housing market, buyers should always "research the developer. There are resources ... do your due diligencewhen you're buying."

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The project, proposedby Terrasan327 Royal York and marketed through its sister company Stanton Renaissance, is located on Royal York Road adjacent to the Mimico GO station. Both Terrasan and Stanton Renaissance are owned by Toronto resident Louie Santaguida.

Aptly namedOn the Go Mimico, buyers were promised 27 storeys of luxuriously finished condo units with retail space on the main level. It was supposed to be the first condo building of its kind in Toronto with direct access to a Metrolinx station. Stanton Renaissance also promised buyers a "commitment to sustainable urban dvelopment."

But almostimmediately there were problems. In 2012,Metrolinxbacked away from the deal to partner with the developer. The regional transit agency's spokesperson, Anne Marie Aikins, told CBC Torontothat "some information had come to our attention that made this a less than desirable agreement to enter so we pulled out of that agreement [that year]."

By 2013, soon after excavation of the site began, crewswalked off the job claiming they weren't being paid by the developer.

Developer had never built condos before,had history of corporatebankruptcies

Santaguida's other business ventureshad a troubled history of bankruptcies leaving creditors on the hook for millions of dollars in unpaid bills.The financial issues promptedBrantfordcity council to walk away from an agreement that would have seen one of Santaguida'scompaniestake on a big industrial redevelopment in that city.

Stanton Renaissancehad never built a condominiumor a residential tower anywherebefore the companyappliedto the city of Toronto to build and sell its condos to hundreds of potential buyers.

The City cannot refuse to accept applications or issue approvals...-Bruce Hawkins, City of Toronto spokesperson

City councillors rezoned the land for the developer and staff issued the various building permits needed to move the projectforward.

In an email toCBC Toronto, city spokesperson Bruce Hawkins wrote,"the City cannot refuse to accept applications or issue approvals (including both planning approval and building permits) on the basis of past history of the applicant/developer/owner, or based on an evaluation of the financial stability of the applicant/developer/owner."

Local councillor big booster of the condo project

The local councillor, Mark Grimes, who represents Ward 6, Etobicoke-Lakeshore,was a vocal proponent of the project. Grimes supportedthe developer's application to increase the height and number of units beyond whatwaspermitted in the original proposal.

Grimes appeared in a promotional video for the project. While twoother councillorswereseenin the video, they didn't speak. Grimes, however, appearedto be wearing a wireless microphone under his golf shirt as he answeredquestions about the project.

"We're on the platform of a GO station. So, out your back door you walk one minute to the platform," he said in the video. "So, people who don't have a car, this is the place you want to buy."

In 2015, when CBC Toronto first outlined growing financial problems atthe project, Grimes saidhe didn't knowhe was being filmed for promotional purposes. He also saidthe video was edited and used without his knowledge or consent.

Monday, in an email exchange with CBC Toronto, Grimes said he was not aware of the developer's previous financial history and that he feels "terrible for anyone who may lose their purchasing opportunity. It is very unfortunate thatthis happens quite often in the city."

He also added. "What's to say the market doesn't crashtomorrowand the buyers are better off than prior to the bankruptcy?"

Court documents allege the developer started defaulting on paymentsjust months after being loaned $21 millionin construction money last year. The documents also allege Santaguidadirectedmore than $2millionearmarked for the project toother uses.

Land registry records show trades companies have put more than $5millioninliens on the project, claiming the developer hasn't paid them for work completed. The tower is only about 10-15 per cent done. according to documents filed by the court-appointed receiver.

Local community groups are also affected by the financial collapse of the condo project.

The city allowed Stanton Renaissance to use ahistoric train station located in a public park across the street from the construction site as a sales centre for more than two years.

In return, Stanton Renaissance agreed to restore the building.Community groups say the developer has left the building looking like a modern condo sales office, not ahistoric train station as they believed was promised.

Stanton Renaissance's websiteboasts plans to build threemore condo projects in Toronto and Hamilton.

CBC Toronto reached out to Santaguida through Stanton Renaissance, but did not receive a reply.