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The drama surrounding the mighty The One development at the corner of Yonge and Bloor just keeps getting jucier as the tower, which was set to be Canada’s first supertall skyscraper and its highest residential building, remains in limbo nearly two years past its planned completion date.
The Mizrahi Developments-led complex was put into receivership last fall due to more than $1.2 billion in unpaid debts and additional cost overruns associated with its construction, with leader Sam Mizrahi ousted from key roles on the project just a few months later.
In the midst of all this, the unfinished structure looming dozens of storeys over the key intersection has been adopted by other stakeholders in various capacities: Knightsbridge Development Corporation as project manager, Skygrid Construction as general contractor and Alvarez & Marsal as appointed receiver (and, as of May, seller).
Despite Mizrahi no longer being at the helm of the project, allegations of the alleged mishandling of his over-ambitious venture continue to emerge in court.
Most recently, Mizrahi’s corporation been accused of “improperly charging” millions in various fees and “overpaying” itself, as well as generally breaching contract, including by holding onto commissions from defaulted sales that were supposed to be handed over to creditors — commissions that he paid himself even when buyers did not put down deposits.
These claims come from court documents made available by the receiver on October 18 that also cite missing money, labour rates that “significantly exceeded actual labour costs,” bogus invoices “for work that was not performed or material that was not supplied to the project,” and more.
Here’s what’s happening with the troubled megatower rising on Toronto’s skylinehttps://t.co/rk2qfwSK2Y
— blogTO (@blogTO) September 19, 2024
The applicants, Mizrahi’s creditors, claim his firms owe them total of $58.8 million, though he insists he is the one who is owed money (to the tune of $11 million). He also asserted that the allegations are false and that he “strongly rejects” them when speaking to the Star this week.
Meanwhile, some of his other endeavours have proven to be similarly financially problematic: ongoing residential builds at 128 Hazleton Avenue in Toronto’s Yorkville neighbourhood and at 180 Steeles Avenue just outside the city’s bounds in Vaughan were also put into receivership over the summer.
The private real estate fund backing both sites stated in court submissions that they had “lost confidence in Mizrahi and the Mizrahi Group’s ability to fulfill their financial obligations” as the over-budget, delayed complexes are “at a standstill because of lack of funding.”
Experts don’t have good outlook for troubled 91-storey megatower project in Toronto https://t.co/cDD3QhQVOf
— blogTO (@blogTO) June 28, 2024
In spite of all of this, work on The One persists, though its final height and floorplan have been amended and are still subject to change. The latest plan appears to be for 85 storeys (the original ask before the plan was upped to 91 floors) with 88 more units than earlier blueprints — now a total of 503 — thanks to reconfigurations on some of the upper floors to “generate substantial additional net realizable value.”
