A church's business deal with a controversial developer who has a lengthy history of questionable real-estate dealings has forced the sale of the church’s south Edmonton property and may result in the church’s closure.
Under a judicial court order, a commercial realtor listed the Victory Christian Center at 11520 Ellerslie Road on July 6 for $14 million.
"We have had a significant amount of interest," Brad Gingerich, a senior vice president with CBRE Ltd., said Friday.
Neither the church’s pastor, Cal Switzer, nor its lawyer, Lyle Brookes, would comment on the loss of the church.
But an affidavit sworn by church advisor Clayton Rayner states that, "the Ellerslie Road Lands are in foreclosure proceedings and it appears likely that Victory's operations will come to an end if the lands are sold in the foreclosure proceedings. Victory owns no other buildings from which it can conduct its operations for the church, children’s daycare and school."
Court documents show Switzer sold the Victory property to developer Kevyn Frederick in August 2008 for $18 million.
Frederick transferred the land to a numbered company he controlled but didn’t register the mortgage, which would have guaranteed the property reverted back to the church if he didn’t make his payments.
The documents show Frederick made a down payment of $2.8 million but paid nothing more. The property fell into foreclosure and eventually a judicial sale was ordered.
As part of the deal, Frederick was supposed to provide the church with land in Leduc for a new church. But documents show he also reneged on that deal.
Court documents show Switzer cut the deal with Frederick without any independent legal advice.
Frederick has history of questionable real estate deals
Sources say the 41-year-old Frederick, also known as Kevin Frederick, Kevin Sheldon Frederick, Kevin Ronald Frederick and Portia Frederick, got his start in Edmonton’s hot real estate market as a condo flipper, buying apartment buildings and turning them into condos for a profit.
Frederick is the subject of numerous legal proceedings related to real-estate deals in which he borrowed huge sums to finance purchases, only to have the deals collapse when he defaulted on mortgage payments.
One of those deals was for the Chateau Lacombe Hotel in downtown Edmonton. That deal collapsed after Frederick defaulted on the mortgage without making a single payment. Another deal, the Bellavera Green Condo development in Leduc, also collapsed.
The mortgage holder in the Chateau Lacombe deal slapped a $32 million mortgage on Frederick’s Victory church property in an attempt to recover some of its money.
Edmonton dentist Ram Singh also put a $10 million mortgage on the Victory church property to try recover the money he is owed on the Bellavera Condo deal. It was those creditors that forced the judicial sale of the Victory property.
Frederick is also being sued by resident owners of a Fort McMurray condo building after their reserve fund disappeared.
Court documents show Frederick borrowed nearly $1.7 million from an Edmonton bank to develop the building, but defaulted on the loan leaving the condo in receivership.
The lawsuit accuses Frederick of "embezzlement, unauthorized misappropriation and secret misdirection" of $268,000. The condo owners are now stuck with the future cost of maintenance and repairs.
The allegations in the lawsuits faced by Frederick have not been proven in court.
Victory church’s lawyer said they have no idea where Frederick is. Sources tell CBC Frederick was last seen in Edmonton about two weeks ago, and is now believed to be living in Las Vegas.
Frederick is scheduled to appear in court in Edmonton in November to face two counts of uttering forged documents.
It’s alleged he used those documents in 1997 to obtain aliases from Alberta’s registry system. In January he is expected to appear in court in Leduc for a trial on an assault charge.