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Bayview developer pursued by bank
By Peter Varga
Northern News Services
Published Saturday, March 21, 2009
Fisgard Capital Corporation, which helped finance the development of the Niven Lake property has served a court notice to the developer, Bond Street Properties, that they are seeking repayment of a $3 million loan for the development.
Meantime, Bond Street has informed the city that it is continuing to seek financing to complete the project, according to Mayor Gord Van Tighem.
"They told us they were looking for more money," the mayor told Yellowknifer on Wednesday. "That was last week."
According to the mayor, the Edmonton-based developer is seeking "financing, partnerships, whatever. They're not going to let it go away."
Court documents show that Fisgard Capital, a Victoria, B.C.-based investment and lending firm, had issued a statement of claim demanding Bond Street repay a mortgage in arrears used to develop Bayview Estates – or face court action in the Supreme Court of the Northwest Territories. A letter to the developer from Fisgard's lawyer states that, as of January 9, 2009, "the amount due, owing and in default is $3,178,217.25." This consists of $3 million principal and the rest in "interest and costs."
Court files on the matter show, in a document dated March 9, Bond Street properties failed to deliver a statement of defence "within the time provided by the rules of the Supreme Court of the Northwest Territories."
The defendants in the case are listed as Bond Street, Shakeel Mohammed Kiani, who is the company's president, and Georgina Kiani. Fisgard Capital Corporation is the plaintiff.
Contacted in Edmonton by telephone, Bond Street senior vice-president Maurice Yusep would not comment on the status of the Yellowknife project.
"We're still working on some avenues with the city," Yusep said. "But there's no comment to be made at this stage."
A Fisgard representative confirmed the capital firm has a mortgage on the property, but would not comment on their court action.
"Not much can be said until we go through the process in court," a representative from the company's underwriting department said. "That takes time."
The company's lawyer in Yellowknife also said he couldn't comment on the matter.
Bond Street has usually been prompt paying taxes on the properties, according to the city.
"They've always paid their taxes on time to avoid being listed as in arrears when we go to the auction stage," said Carl Bird, director of corporate services with the city.
Construction of the 92-unit townhome development began in the spring of 2006, but has not been completed. Unfinished units have been sitting idle for at least two years.
Bond Street bought the land to build Bayview Estates in 2003. Yellowknife realtor HomeLife Sunrise Real Estate took on the task of pre-selling units in the development, which includes semi-detached and row houses, as early as November 2004. The realtor pre-sold a total of 24 units -- 16 that had been under construction, and eight that have not started construction.
"A number of people have asked for their money back, and they get it back," said James Clark, co-owner of Home Life. "We hold all the deposits," the long-time Yellowknife realtor said.
Clark said pre-sale contracts were written bearing in mind that units had yet to be completed.
"In layman's terms, if Bond Street doesn't go ahead with this project, then they (pre-purchasers) will get their money back," he assured.
Purchasers who have requested their money back all got it back within a single day, Clark said. The realtor declined to say how many have asked for refunds, although he confirmed the majority have not.
Meanwhile, the incomplete wooden houses continue to sit idle, without roofs, windows or siding. Ravens flutter around the structures and pressed wood paneling show signs of weathering from the elements.
The Yellowknife fire department confirmed that the developer has ensured the unfinished project does not present a safety hazard. Common safety standards for development projects under construction appear to be in place, according to Fire Chief Albert Headrick. These include 24-hour security and water accessibility. "So in essence, is it abandoned? No it's not," said Headrick.
"When we met with the property owner last year, they ensured us that there is a watchman onsite at all times," said NWT Fire Marshal Stephen Moss told Yellowknifer. "Otherwise we would have required them to close the buildings.
"These buildings have been sitting for so long, we have the expectation that this extra requirement be in place so that any safety concerns are being addressed immediately," Moss said.
Still, the state of the unfinished homes is questionable.
"I think the city had better start feeling uncomfortable because the project has been sitting out there for about two or three winters," Clark commented. "Not a good sign. I mean, that old chipboard, it doesn't last forever. It's just a big headache."