Garry Marr
Province

The Canadian Real Estate Association says allegations it is anti-competitive are “simply false,” according to a legal defence filed with the Competition Tribunal.

The group, which represents about 100 real-estate boards across the country and about 98,000 agents, calls an application filed by Commissioner of Competition to be “fundamentally misconceived” and says consumers already have plenty of choice as to how they can sell their home in the marketplace.

Competition Bureau Commissioner Melanie Aitken filed a complaint with the tribunal in February against the group and its use of the Multiple Listing Service, which is responsible for about 90 per cent of the transactions in Canada.

One of the concerns of the bureau has is that, under CREA’s rules, agents are prohibited from offering consumers the option of simply paying a fee to list a home on the MLS system. Consumers have to opt for an entire suite of services that come with a commission rate of about five per cent, though it differs from province to province.

“Contrary to the commissioner’s allegations, the MLS rules do not prevent entry and impede expansion by competitive business models that provide unbundled residential real-estate brokerage services,” said CREA in its filing to the tribunal.

The association this past week made amendments to its owns rules which would also allow consumers to conduct parts of a transaction without using a realtor.

Those changes were immediately shot down by Aitken because they also included a clause that makes them subject to the rules of the local boards and CREA itself, if it chooses to change its rules again.

The two sides have been engaged in a war of words since negotiations broke down in February.

© Copyright (c) The Province

and three levels of government are starting to pay attention

Lena Sin
Province

Is it possible to live comfortably in a house that measures just 12 feet by 12 feet — a footprint smaller than a giant billboard and only slightly larger than a garden shed?

Well, some habits might have to change, such as learning to put things away immediately and downsizing the size of your wardrobe.

But according to James Stuart, the answer is a definitive “Yes.”

Stuart would know. The 46-year-old Nanaimo resident moved out of his 3,200-square-foot house five months ago and into a tiny house measuring just 144 square feet — smaller than most master bedrooms.

Its saving grace is a 12-foot high ceiling, hence its name, “Twelve Cubed.”

“[My friends] were all thinking I’m crazy, that there’s no way you can live in 12 feet,” he says.

At a time when homelessness and housing affordability continue to be major issues, Stuart’s micro house is rewiring the definition of compact, affordable living — and it’s catching the eye of municipal, provincial and federal governments.

For homeowners looking to lower sky-high mortgage payments, Stuart says his micro house has the potential to bring in rental income as a coach house built in backyards.

And the idea is gaining attention, with 172 people expressing an interest in buying a Twelve Cubed home.

Stuart is neither an architect nor builder by trade. A former military man and salesman, he’s more of an ideas guy who channelled his anger into a bright idea.

The seed was planted in December 2008 when he read about the tragic death of a Vancouver homeless woman who burned to death while trying to keep warm by candlelight.

“There are lots of people here with million-dollar houses and great lifestyles and everything, and some poor woman burned to death trying to stay warm in Vancouver. It just got me really mad,” says Stuart.

It also got him thinking: How small could one make a house? And not just a shell to keep warm in, but a stylish and comfortable home.

With doodles on a paper napkin, the concept started to grow.

“The key is to think cubicly,” he says.

With an innovative movable floor system, Stuart says the house can accommodate two levels that are each seven-feet high, underneath a 12-foot tall structure. Counting both levels, a homeowner would have about 288 square feet, including a bedroom large enough for a double bed and closet, plus a bathroom, kitchen and living room.

Last September, Stuart finished building the pilot house, but most of his friends were still skeptical. They wagered $5,000 that he wouldn’t last six months in it.

Stuart’s now just one month away from collecting the prize, which will be donated to the Salvation Army.

“The comment was: ‘You’ll never get anyone to live in this.’

“I’m a big believer in that if you’re going to get someone to do it, you might as well have done it yourself first. So I said, ‘Alright, I’ll move into it this winter.’ And oh, you should’ve heard the laughter at that one,” he says.

Carolann Stoll, a Nanaimo acupuncturist who’s interested in a Twelve Cubed as a rental suite, admits it’s difficult to understand until you see it.

“Seeing is really believing. I love the idea of something being so compact and providing so much. It seemed like an unbelievable concept, and when I saw it and moved through it and laid on the bed and stood at the sink and looked at the windows and took in the space, [it felt] a lot bigger than 12 by 12,” said Stoll.

Priced at $24,500 (not including water, sewer and hydro hook-up), Twelve Cubed is much cheaper than building a coach house, which could easily cost upwards of $120,000.

With so much interest, Stuart has partnered with builder Pheasant Hill Homes, which is currently building a show home. The partners are looking for a building plant and predict it will be summer before any units are available for purchase.

Coach houses, also variously called laneway or carriage houses, are still a relatively new concept in B.C. — but one that’s catching on as cities continue to grapple with housing affordability and a tight rental market.

Each municipality has its own zoning regulations, and buyers need to check with their own municipal regulations to determine if a Twelve Cubed home meets their city’s standards.

In Vancouver, a pilot project for laneway houses was approved last year. Regulations stipulate that houses must be at least 280 square feet to a maximum of about 500 square feet on 33-foot-wide lots and 750 square feet on larger properties.

In Nanaimo, coach houses were approved in 2008 with no minimum size requirement, but they cannot be larger than 750 square feet.

Victoria is now considering a policy that would allow coach houses to help ease the city’s rental shortage. A report is expected to go to city council in about six weeks.

But Stuart still dreams that his micro-house will one day be used to house the homeless, the original inspiration for the venture. He believes that Twelve Cubed houses could be easily erected on small-lot holdings owned by municipal governments and scattered throughout a city.

So far, he has had only curious inquiries, including a visit from a provincial assistant minister as well as a call from a federal official. The city of Abbotsford was also interested in learning about Twelve Cubed as a social-housing solution, he says.

He’s glad they’re asking.

“If I could get a measurable decrease in homelessness, I’d be the happiest guy on the planet,” says Stuart.

© Copyright (c) The Province

$450-million project will anchor new entertainment hub

Lena Sin
Province

Plans for a new destination casino-hotel complex next to B.C. Place Stadium will transform the area into a new entertainment hub for downtown Vancouver, says Premier Gordon Campbell.

The $450-million project will feature two hotels, five restaurants and a 110,000-square-foot, two-storey casino open 24 hours a day.

The complex is part of an ambitious plan to revitalize B.C. Place, slated for a $565-million renovation, of which $458 million is earmarked for a new, retractable roof.

The complex is expected to spark a lively debate among False Creek residents when it comes before the city for rezoning approval.

Campbell said the massive casino and entertainment complex will boost tourism and provide economic spinoffs, adding that revenues will help offset the cost of replacing the roof at B.C. Place.

“What we’re doing is creating a whole new entertainment complex for British Columbia,” he said.

“And I think what it really does is it will revitalize this part of town. It won’t just be a place that you drive around and drive through.”

The new 680,000-square-foot centre will sit between the west side of B.C. Place and the Cambie Bridge on a one-hectare parcel of vacant land.

The Edgewater Casino, now located at the Plaza of Nations, will be relocated to the new centre, pending rezoning approval.

Paragon Development of Las Vegas, which owns the Edgewater Casino, is the winner of a private-sector bid to build the complex. It has signed a 70-year lease agreement with B.C. Pavilion Corp. (PavCo), the Crown corporation that runs B.C. Place.

PavCo will receive $6 million a year (plus inflation) in lease revenue for the first 10 years, with the price escalating after the first decade.

The lease revenue will partially offset the cost of replacing B.C. Place’s iconic marshmallow roof with a new retractable version.

Campbell said the new centre attached to B.C. Place will create thousands of jobs — an estimated 3,200 direct and 2,220 indirect jobs during construction and another 1,900 direct and 1,300 indirect jobs when the facility opens.

The B.C. government also estimates it will reap $130 million in gaming revenues during the casino’s first year of operation.

The project still requires the city of Vancouver to grant rezoning of the site.

But Vancouver Coun. Geoff Meggs told The Province that even though he expects a vigorous debate about the project, it’s unlikely the city will block it.

Howard Blank, spokesman for Great Canadian Gaming Corp., which owns River Rock Casino in Richmond, said the company welcomes the competition and has no concerns about its market share.

Construction of the project is expected to begin in early 2011 and completed by mid-2013.

© Copyright (c) The Province

Understanding that your interest is the lesser interest and the strata corporation’s is the greater is a start

Suzanne Morphet
Sun

‘Another election,” we’ll complain, when faced with going to the polls yet again.

During that triple whammy between October 2008 and May 2009 that had us voting in federal, then municipal and finally provincial elections, most of us were worn out by our democratic obligations.

Pity then, those of us who live under yet another level of government, this one with annual elections.

I’m talking about what’s sometimes called the “fourth” level of government, the one that the million or so British Columbians who live in strata developments are part of, whether they like it or not.

When you buy a strata property, developers and their brokers like to say you’re buying a “lifestyle.”

True enough, though it may not be the relaxed, carefree one they suggest.

The lifestyle of a strata owner involves not just elections, but annual budget decisions and — if you’re on council — record-keeping and bylaw enforcement.

This column isn’t intended to scare you away from buying a strata property.

There are good reasons why half of all taxable properties in several of B.C.’s larger urban centres are strata properties: they’re more affordable and carry a lighter environmental “footprint” than detached homes.

Rather, this new column is intended to help you better understand the obligations that go with owning a strata property and to ensure your fourth level of government is operating in your best interest.

Let’s face it: sitting on a strata council or even participating at your council’s annual general meeting isn’t the way most of us would choose to spend our Saturday afternoons.

Retired people often buy a strata property to lighten their load.

And the young adults at the other end of the strata-ownership spectrum are often so preoccupied with careers and families that they have little free time to get involved with their strata councils.

Yet, in many ways, living in a condo requires more knowledge and obligations than other kinds of property ownership.

Consider this list of activities condo owners should be willing to take on, according to our provincial legislators, who passed the Strata Property Act:

– Attend meetings and help make important decisions.

– Understand the bylaws and rules of your strata corporation.

– Educate yourself about the Strata Property Act.

– Compromise your interests for the good of the strata corporation as a whole.

So much for spending all your free time on the golf course!

Elaine McCormack, a lawyer at Alexander Holburn Beaudin & Lang LLP in Vancouver, helps strata corporations and owners resolve problems.

She says the biggest challenge for council members is exercising their quasi-judicial role, which means enforcing bylaws and rules.

“Because you’re standing in judgment of your neighbours and you’re obliged to follow the rules of natural justice and deal with it in a fair and appropriate way,” she says.

“That is something most people aren’t trained for and something that’s very difficult to do.”

Not surprisingly, many strata councils hire management companies to help them run their affairs. But that can be problematic, too.

Imagine handing your life savings over to a financial adviser, giving him or her free reign, then finding out that individual is incompetent, but you can’t easily “fire” him or her. Now what?

Four condo-owners associations exist to help.

The Condominium Home Owners Association, the Vancouver Island Strata Owners Association, the Pacific Condominium Association of B.C. and the Vancouver chapter of the Canadian Condominium Institute all offer seminars and have websites with online information.

Membership ranges from $20 to $550 annually, depending on whether it’s for an individual or a strata council.

At that price, joining an association may be the smartest thing you and/or your strata council do.

© Copyright (c) The Vancouver Sun

Christina Symons
Sun

The Rolston

Project location: Granville at Drake, Vancouver

Project size: 187 units

Residence size: 461 sq. ft. — 890 sq. ft.

Prices: From $300,000

Developer: Rize Alliance Properties Ltd.

Architect: IBI/HB Architecture

Interior design: Cause + Affect

Sales centre: 999 Seymour Street (at Nelson)

Hours: noon -5 p.m., Sat — Thur (opens mid-April)

Telephone: 604-688-8927

E-mail: [email protected]

Web: therolston.com

Occupancy: Summer 2012

—

In the early 1950s, then-B. C. education minister Tilly Rolston stood up for a controversial sex education curriculum called Effective Living. Rolston, a member of W.A.C. Bennett’s Social Credit Party and co-founder of the B.C. Council of Women, was emphatic in her defence of the subject matter, declaring: “We want no sausage-machine citizens. We want no tremendous amount of uniformity. We want a measure of individuality …”

She obviously wasn’t referring to the likes of the open-minded set who’ll seek an address at the savvy new tower rising from the roots of the Cecil Hotel, an infamous strip joint adjacent to the Yale Hotel at Granville and Drake. But today, the same desire to foster a sense of spirited, informed living resonates.

Fittingly, the building, much like Rolston herself, promises to be a Vancouver original.

“Tilly Rolston was someone who was very pioneering,” says Will Lin, chief executive officer of property developer Rize Alliance. The politician’s surname has also been given to a Granville-area street called Rolston Crescent. “Architecturally, the building feels very original to us -as though it says, ‘I’m strong and I belong here.'”

The backstory on Rize Alliance includes selective, yet signature additions to Vancouver, including the first loft conversion project in Yaletown in 1991, the London Building on West Pender, the Cossette Building on Homer and Metropolis on Richards.

The Rolston project, Rize Alliance’s latest, was initiated by Wade Luciak, the long-term owner of the Yale and a previous owner of the Cecil Hotel.

Luciak aimed to do a sensitive redevelopment, says Lin. Refreshing the Yale, the rhythm and blues capital of Vancouver, was also a priority.

A proposal call went out to developers and ultimately, Rize Alliance rose to the top. After a year of negotiations, the team was invited to enter into an agreement with Luciak to purchase and develop the Cecil Hotel property, while providing the Yale with much-needed revamping.

And so, the Cecil is coming down, new residences are going up and the Yale will be revealed, a fresher version of itself. The Yale Hotel housing will also be modernized with 44 rooms renovated for single-room occupancy. Existing residents will be relocated, with each given first opportunity to move back in.

“The Yale is not going to change in terms of programming,” Lin says. “But the architecture, mechanical and electrical, will be upgraded . . . .”

Meanwhile, design of the new Rolston tower and residences is suitably daring.

The 23-storey LEED gold-equivalent building has a dynamic tiered exterior expression, a strong juxtaposition next to the heritage neon face of The Yale. Without being fussy, it’s a multifaceted tower worthy of anchoring the north side of the Granville Street Bridge, signifying the emergence of the lively new neighbourhood tagged Midtown.

The Rolston steps backs politely from itself at level 16, with The Terrace protecting the coveted downtown view corridor while offering residences a generous amenity for barbecues and outdoor living. On a higher level The Garden terrace has a long communal party table, adding to a sense of openness, with space for all the necessities of city living: yoga, chilling and urban farming.

Inside, design and layout of the units by Vancouver’s Cause + Affect is unique and alluring.

Unlike many downtown developments that merely offer a choice of colour palettes, the Rolston provides buyers with a selection of two boutique-living environments, says Bill Szeto of Otezs Marketing and who is charged with selling the units.

“Rather than a predetermined floor-plan design,” Szeto notes, “here, owners can decide between two layouts or what we call personalities, for almost every suite.”

Door No. 1 is light and airy, yet fairly conservative, and called the Yale. Door No. 2 is slightly saucier, the “stripped down” Cecil with its risque curtained-off bedroom.

There are also three standard colour palettes to pick from and more custom options and upgrades.

The residences are outfitted for style, ease and entertaining with lots of glass and a generous balcony in each. A suite of full-sized stainless steel appliances means business in the kitchen, while custom-designed built-in wardrobes and closets add efficiency, blending in seamlessly.

Here and there, stylish little touches such as the Blanco undermount kitchen sink and tile-surround soaker tub stand out. In addition to the boudoir finery, the Cecil layout also offers a cool built-in credenza for entertainment systems, plus a dining space.

The outside neighbourhood, like the property, also has a new lease on life. Basking in the afterglow of the Olympics, cafes and shops up and down the recently refreshed blocks are abuzz.

You can’t help but notice that city hall recently spent more than $20 million improving the streets and sidewalks. Literally steps from Yaletown proper and a few blocks to downtown and the seawall, Granville North is overripe for revival and is now attracting visitors enjoying the street again.

“Granville Street is now a happy place,” Lin asserts, noting that revitalization has exceeded his hopes. “We were expecting it to be upgraded, but this is a very pleasant surprise overall and I think that the Olympics has really done Granville Street justice.”

Young, creative people who thrive in the heart of the action will likely love it here. A promotional web reel created to sell the Rolston captures that proposition perfectly with its young, hip stars and a soundtrack selection that says, “show me your passion.”

“It’s going to be a person who’ll treat the coffee shop, the pub, the bagel store downstairs or in the nearby streets as an extension of their living room,” says Lin of his buyer. “Mostly singles or young couples who are a little more creative in terms of their selection process.”

Still in the tentative stages and somewhat hush-hush, plans are also in the works to bring back The Cave — Vancouver’s upscale supper and dance club — to the street space near to where the Cecil stands. A revival of The Cave, which was renowned for showcasing prominent acts that included Louis Armstrong and Chuck Berry, would provide a new destination of considerable calibre.

“I’ve lived in Vancouver all of my life and I’ve been to the Cecil and I’ve been to the Yale,” says Szeto. “But I’m really excited about that supper club we’ve proposed because there is absolutely nothing like it in the city.”

Whatever ends up going there, the team insists it will be iconic in the best way that urban architecture can be: that is, singular, exciting and welcoming.

“It’s not an ivory tower, by any means,” says Lin of the overall intent of the project and what it will add to the community. “The Rolston will simply appeal to people who are confident and feel strongly about what they want within the city.”

Perfectly poised for that demographic, the Rolston also boasts Twitter, Facebook and Flickr sites, with cool links to local hot spots and design inspirations, making it easy for potential buyers and fans to try on the lifestyle while they stay up to date.

© Copyright (c) The Vancouver Sun

If you don’t your home will look more likely than not like a junk shop

Marta Gold
Sun

“Re” has become the latest style buzzword for an Edmonton designer — as in reuse, repurpose and recycle to revamp the old, reintroducing it into a restyled home.

“People aren’t really wanting to reinvent their whole house,” says Rosalyn Lazaruk. “They’re just wanting to incorporate a few trends, figure out how they can use what they have and maybe make it new again, upcycle it, or sell it to purchase something new that they want. I think that has a lot to do with the economy.”

Lazaruk’s inspiration comes from her support for Habitat for Humanity and its ReStores across Canada, which raise funds for the charitable organization by reselling used home furnishings, fixtures and building materials.

The curious, unique mix that results from this upcycling fits perfectly with the current design trends, she adds.

“That’s what’s so fantastic about design right now. We’re really taking a look back at all the different design trends over the last 20, 30 or 40 years.

“We’re looking at mid-century modern pieces being paired with even some shabby chic pieces that were more of a ’90s trend, so really mixing design esthetics so that you show your personal style out of it, which is really awesome, because, then, every space is unique and not cookie-cutter.”

Lazaruk says she’s seeing many of her clients following this “upcycle” trend, as well as becoming fans of flea-market and antique shopping, something that has long been popular in eastern provinces, but has not, until now, found much favour on the Prairies. “People are finally catching on to that here, that if you put a little TLC into something old, it can be better than new.”

For her display at an Edmonton home show, Lazaruk has taken an outdoor bench and refinished it for use as a bench alongside a dining room table.

She has used glass shelving from a broken-down wall unit and installed it as a backsplash in the kitchen. A roll of copper nails intended for a nail gun will be turned into an art installation on the wall, she says.

For do-it-yourselfers, here are some of Lazaruk’s easy tips on how best to reuse, repurpose and upcycle:

– Don’t jump on the bandwagon by transforming your entire home into an eclectic mix of styles that make it look more like a junk shop than a living space. Incorporate a few new pieces, but try to be creative in their use, she suggests.

“Maybe your nightstand actually works better as a side table beside your couch, or the lamps that are in your dining room … work better in your living room,” Lazaruk says. “It can be as simple as moving things around your house and really feeling the sense of how it works.”

Be mindful of the scale and lines of the furniture, more so than the colour or era, she adds. Don’t pair a sleek chair with an overstuffed sofa. Keep things on a similar scale so no one thing overwhelms the others.

– Play with colour. “A lot of clients I have did go out and invest in quality furniture in neutral colours, and they bought the sofa, the loveseat and the matching chair. And now that we’re looking at more of this eclectic design style, they don’t want to get rid of those pieces, but how do they make it a bit more their own?” Toss in throw pillows, area rugs, artwork and small pieces of furniture in punchy, bright colours, says Lazaruk.

– – –

How to repurpose . . .

– Brass light fixtures from the ’60s and ’70s

“Those sorts of ornate styles are in, but the metals are different or the colours are different,” says Rosalyn Lazaruk.

Get them professionally sprayed in chrome, or do it yourself with Rustoleum spray paint, which now comes in fabulous colours. Replace the shades with a more contemporary drum shade.

– Ornate dining room chandelier

Spray-paint it hot pink and hang it in a girl’s bedroom, or spray it high-gloss black for a sleek, new dining-room fixture. “Really think about how just changing the colour or the shades or the crystals on it can reinvent it for a really fun and playful space.”

– A small dresser

Use it in the entry hall for mitts, keys, etc. Put it in the bathroom for storing towels. Paint it a fun colour, or, if you like the wood, change the hardware. “I’ve wallpapered the tops of dressers and just added a custom-cut sheet of glass to the top to jazz it up,” says Lazaruk.

– A door

Add ornate legs and make a dining-room table.

– A small dining table

Cut down the legs for a new coffee table

© Copyright (c) The Vancouver Sun

‘World loves Vancouver . . . a very safe place to invest . . . to park money’

Barbara Gunn
Sun

The thousands of international visitors who came to Vancouver to take in the Winter Olympics may have come and gone, but investors in many parts of the world won’t soon take their eyes off the real estate in the city’s core.

That was the message delivered this week by the veteran organizer of new-home project sales and marketing campaigns, Bob Rennie, to a gathering of about 250 real estate agents in the Jameson House sales centre on West Pender. Jameson House is a 37-storey residential tower that was stalled during the height of the recession when it suffered a loss of financing, then headed to the courts for restructuring.

The Games, Rennie said in a 10-minute state-of-the-market address, made Canadians feel “unbelievably positive” about themselves, a feeling that’s reflective of the way offshore investors view downtown Vancouver real estate.

“I don’t think, as positive as I am, that I understand how [much] the world loves Vancouver,” he told the group. “It’s a very safe place to invest, it’s a safe place to park money … Yes, we went through a nine-month downturn, but from last September, it’s been pretty amazing. If you have a house listed for $1.6 million on the westside, you just wait until Sunday and you count the offers you’re going to be presenting. That doesn’t happen anywhere else in North America.”

Rennie reminded the agents, however, that when it comes to international demand, there are two distinct real estate markets in the Lower Mainland: the market in the suburbs and Fraser Valley, where there is “a constant supply of products, predominantly based on local incomes,” and the market in the city core, the one fuelled by outside sources.

“We have China,” he said. “I don’t think we understand how much they’ll follow the entrepreneurial footsteps of Hong Kong — out of Hong Kong and into Vancouver — especially given the turmoil of America. In America, everybody is nervous.

“If you look at the market of downtown Vancouver, the westside markets, and markets with constrained land supply and constrained inventory — that’s where outside eyes [are focused], whether it’s China, whether it’s Korea, whether it’s Europe … I don’t think until six months before the Olympics we really saw Russian money here. It’s coming.”

Bosa Properties’ Jameson House, a condominium development designed by world-renowned architect Norman Foster, represents one of the last luxury developments likely to be erected downtown, Rennie told the group.

“Look at Jameson House — it’s like waterfront: it’s an eroding market,” he said. “We’re just not going to see a lot more of it. I think that the luxury market is sort of capped at the amount that’s coming on.”

Jameson’s loss of financing in the fall of 2008 was followed by a struggle to restructure under court protection from creditors. One condition of the restructuring was that the project’s pre-sale contracts be held in force, even though a number of buyers had fought for the right to rescind their deposits and get their money back.

Of the 138 Jameson homes, 34 remain available.

Rennie told the gathering that the recent downturn has created a “new economy” — and that’s created a new, more conservative mindset for consumers.

“In the old economy … we were going to have more and more and more, and retire earlier. Now we’re going to have to work a little longer. I forget who said this, but it’s no longer about the return on my investment, it’s the return of my investment.”

Also changed is Rennie’s thinking about mortgages, given recent predictions that interest rates may be heading upward in the coming months.

“What I’ve been telling everybody with more than one property is, over the last two to three years, float,” he said in an interview. “Over the last year to 18 months, we’ve been saying you should lock in half your portfolio for five years and let half of it float.

“And now we’re telling everybody, go take five or seven years because the buyer that’s buying with the minimum 25-per-cent down, or even 10-percent down … can’t afford the risk. So go lock in. Rates are extremely low right now, and we’re urging everyone that’s buying in a pre-sale: go lock in your mortgages now. I don’t think we should gamble with our principal residence.”

Interest rates may represent a guessing game, but so too will be the effects of the looming harmonized sales tax, set to take effect on July 1, on residential purchases, Rennie suggested.

“It’s how the offsets, how the developers are going to pass those through to the consumer, and I don’t think everybody’s figured that out yet,” he said. “We just have to see how things move along. is it going to be that people are going to buy seven-per-cent more, or will they just buy seven-percent-less household?”

© Copyright (c) The Vancouver Sun

Master Partnership owes lenders more than $300 million, court documents show

Andrew A. Duffy
Sun

The Bear Mountain Master Partnership, placed under creditor protection on Thursday, was in default on some of its loans and owed lenders more than $300 million, according to documents filed in B.C. Supreme Court.

At the request of its largest lender, HSBC Bank Canada, which is owed $250 million, the partnership was placed under the provisions of the Companies’ Creditors Arrangement Act and developer Len Barrie was removed as the company’s CEO.

HSBC claims Bear Mountain, near Victoria, has been defaulting on payments since 2008, and the bank no longer has confidence the partnership can make good on its outstanding debts.

But that is just one of the issues facing the 500-hectare development as other lenders, who are trying to remove themselves from the CCAA process, have painted a picture of a development in serious financial trouble.

In an affidavit, CareVest Capital CEO Richard DeGroat noted his company had loaned Bear Mountain more than $41 million — secured by a first mortgage on 74 lots within the development.

DeGroat, suggesting to the court that CareVest should not be affected by the CCAA proceeding, said he had been in discussions with Bear Mountain about CareVest taking back the lots to satisfy its claims. He said Bear Mountain’s willingness to discuss this suggested to him that the lots are not “an integral part of operations of the hotel and the golf courses.” He was also hoping the process would do nothing to interfere with a number of impending sales.

In an affidavit, Wesley Roitman, managing partner of Romspen Investment Corp., said his company loaned Bear Mountain $16 million, half of which was to be used to build an office building, with the rest used as operating funds, including $5 million to pay debts owed to HSBC. Roitman said the loan is in default, and Romspen has not received any payments since April 2009.

He said the company was about to commence proceedings to recoup its losses six months ago, but was persuaded by Barrie and other Bear Mountain representatives that a refinancing or sale of the development was imminent and the project would again move forward. Roitman said they held off until about a month ago, “as we are of the view that no refinancing is forthcoming.”

Romspen’s $16-million loan is secured by first mortgages on the incomplete office building, two commercial condominium units, Jack’s Place restaurant and the Bear Mountain fitness club. In his affidavit, Roitman said the only way the company can recoup its loss is to take title on those secured assets, finish the office building and lease out the commercial space. And while the development undergoes court-ordered protection as it seeks to restructure its financing, there’s not much good financial news expected in the coming month, according to cash-flow projections provided by Bear Mountain. The Bear Mountain partnership expects to take in $730,000 between March 26 and April 16, but will spend more than $2.3 million.

© Copyright (c) The Vancouver Sun