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Toronto's massive The One mixed-use project has been placed in receivership as it grapples with more than $1.2 billion in debt.

Receiver Appoints New Developer for The One

A court-appointed receiver has named a new construction manager for Toronto’s massive The One condominium development project.

Alvarez and Marsal said in its first report, that SKYGRiD Construction will start serving as general contractor and developer March 13. Located at 1 Bloor Street, the 85-storey project is grappling with more than $1.2 billion in debt.

SKYGRiD replaces Sam Mizrahi, a local real estate developer who also co-owns the project.

Mizrahi had been retained as construction manager after the project was placed in receivership in October 2023. Alvarez & Marsal cited concerns about Mizrahi’s firm’s performance and monthly fees, which are at or above the high end for projects of a similar scale.

The receiver’s concerns include the lack of an accurate schedule, budget, subcontractor certified-payment process and formal procurement processes, as well as limited use of construction management software and an absence of formal tracking of progress

“The receiver engaged in negotiations with [Mizrahi Inc.] in an attempt to reach a mutually acceptable go-forward arrangement in respect of a number of issues, including go-forward payment
terms,” said Alvarez & Marsalis in its report. “The parties did not reach an agreement.”

Mizrahi disagrees with the receiver’s position and believes its fees were reasonable, Alvarez & Marsal reported. The receiver added that the dispute with Mizrahi had undermined its ability to work constructively with his company.

An Ontario Superior Court judge approved South Korean lender KEB Hana Bank’s application to appoint Alvarez & Marsal Canada as the receiver in the case. KEB Hana has agreed to provide an additional $315 million to ensure that the project is completed.

The project has been plagued by numerous delays amid a dispute between Mizrahi and co-owner Jenny Coco. In its receivership application, KEB Hana said Mizrahi and Coco’s has become “increasingly acrimonious and dysfunctional” due to lawsuits and arbitration cases between them.”

Construction, which commenced in 2017, is continuing on the project, which hotel and retail components. The receiver said its next steps include the implementation of a sale and investment solicitation process.

Image: Wikipedia


Inside The Story

Alvarez & Marsal CanadaSam Mizrahi

About Monte Stewart

Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate. Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s. In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star. Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.

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