From the Toronto Star:
July 22, 2009
Kevin Donovan STAFF REPORTER
Kazakhstan-backed developer Michael Gold is selling his prime property at Yonge and Bloor Sts., signalling that his planned glass tower condo and hotel project may be dead.
Gold made the decision as part of his court-approved plan to keep the property out of receivership, where his main creditor tried to send him earlier this week.
Documents filed in court yesterday show Gold and his company, Bazis International of Kazakhstan, will sell the land on the southeast corner of Yonge and Bloor to an unnamed buyer. The buyer must make a "good faith deposit" as part of the land sale by next Wednesday, and the deal must close by Sept. 16. Several other conditions are attached, including a "due diligence" period for the unknown buyer to analyze the deal.
"I have to wonder if the new buyer will want to build the same thing (Gold) did," said Ray Tabrizi, a purchaser of a unit in the 80-storey tower that Gold planned. "Maybe the new guy will go half the size, one-third, who knows?"
The saga of 1 Bloor began in 2007, when hundreds of buyers lined up for weeks to own a unit in the tallest residential building in Canada. A hotel and retail space was part of the plan. Units went on sale from $500,000 to $8 million and above.
Gold bought the land, cleared it, but last December stopped making payments on a $46 million land loan. The bank that advanced the loan sold the loan earlier this year to a consortium of Toronto businessmen at a discounted price, the amount having not been revealed. When the loan continued to be in default, the lenders, led by financier Gary Berman, tried to place the project into receivership. Berman's group offered $50.5 million, unconditionally, to purchase the land and Gold could walk away.
But Gold, whose wife's family is behind Bazis in Kazakhstan, issued an angry statement on Monday saying Berman's group was trying to steal his project. He warned that Berman's group "plans to cancel all deals with buyers, retailers and the hotel chain."
"If the court decision is approved, almost 500 condo buyers, the retail chains, which were to have flagship stores in the podium and the Sofitel five-star world-hotel chain at 1 Bloor will all be out in the cold," Gold said in the statement.
Now, one day later, condo unit owners speculate Gold may be about to do the same thing.
The court-approved settlement refers to a letter of intent to purchase, but the letter itself was not filed in court. The deal calls for the land to be sold as "vacant land" (it has been cleared) but does not say if the purchaser wants the property free and clear of the condo plan.
Last week, Gold downsized the 80-storey plan to 67 floors.
If Gold's bid to sell the property goes through, Berman's group will be paid out in full. Until then, they will have to settle for a $242,823 interest payment for the current month.
Meanwhile, about 500 purchasers are waiting to hear what will become of about $70 million in deposits held in trust by Gold's lawyer. Tabrizi, who paid $125,000 down for his $500,000 unit on the 42nd floor, is watching the Bazis Toronto website at http://www.1bloor.com/ hoping for a statement from Gold.
"My faith in these guys is gone, my trust is gone," said Tabrizi, who works in flooring sales, and made the purchase as an investment for his family's future. "I should have just left the money in the bank."
The purchasers' agreements promise interest on their deposits should the money be refunded.
The court documents make no mention of Gold's plan earlier this month to bring in $195 million in loans from BTA Bank of Kazakhstan, which is under criminal investigation overseas for loan fraud.
Lawyers and representatives for both sides refused to comment on the events of the day.
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