New St. Regis Hotel developer has yet to erect single building
Five projects Fortress Real Developments is developing are vacant or untouched lots
CentreVenture has put redevelopment hopes for the St. Regis Hotel in the hands of Fortress Real Developments, a company with five more projects across three provinces where not one ounce of concrete has been poured and none have started construction.
In the case of Regina's Capital Pointe, the permit expired after construction delays.
Fortress admitted its Regina and Winnipeg projects are behind schedule but said its three buildings in Southern Ontario are not delayed at this time. This is spite of the fact the lots remain vacant, years after the projects were initially announced.
Winnipeg councillor John Orlikow said there will be no empty lots at the St Regis site.
"We can't have a delay when they rip down the building and all of a sudden say, 'Oh we ran out of financing or something," said Orlikow, adding there will be intense scrutiny by the city before a demolition permit is issued.
Regina still waiting for 'Capital Pointe'
Capital Pointe was supposed to tower over one of the most prominent corners of downtown Regina long before 2015. But all that's on the site is a wooden sign hedged in by a thin metal fence.
The old hotel that sat on the site was demolished in 2011, and the lot has stood vacant since then.
"It is frustrating when plans are put in place, and it takes a long time. It is sort of at the expense of the city in that our downtown has this empty spot for so many years," said Fraser.
The project has undergone ownership changes, like most of the five projects Fortress is developing. It's also been subject to building setbacks.
Fortress took over development in June 2014 but was financially involved as early as October 2012, according to Fortress documents.
"The plan is we will start in the near future without putting a date on this," said Greg Black, project director for Capital Pointe. "Promises were made in the past, and promises were never kept by the previous group. We are not in position where we are going to make promises."
Black said the company continues to work on technical issues and invest money in the project.
"There is an awful lot of details that need to be sorted out before you can move into construction phase of a project of this magnitude," said Black. "I can appreciate if people have a little frustration."
Digging permit expired: extension sought
The building permit that was granted in November 2014 for excavation expired recently because no work had been done in the six-month window — the second permit to expire on the project.
"It is very uncommon that construction does not start within the first six months," said Louise Folk, the director of development services for the City of Regina. "We are working with the developer to confirm status now."
Black said there are many reasons for the delay in digging, including contracts that needed to be signed.
"It is a missing tooth in our city until something goes up there. We are waiting with bated breath to make sure that something happens there eventually," said Coun. Shawn Fraser.
Some condo buyers like Donalie Evans were told they would be living in the 26-storey building by 2013. But Evans is OK with the five-year wait since she put down a deposit.
"The delays have been explainable to me or logical at least. For me, it is frustrating that there is a delay, but it is not that big of a concern," Evans said.
Winnipeg's 'largest skyscraper' yet to break ground
SkyCity Centre, the mixed-use condo project at the corner of Graham Avenue and Smith Street is behind its initial start date of 2014.
Fortress promoted the structure as the tallest building between Calgary and Toronto during its press conference in spring 2013.
SkyCity Centre was originally a venture between Fortress and Mady Development Corp., but Fortress took sole ownership days before a Mady project went into creditor protection in Barrie, Ont. early this year.
"Mady's unwinding and their financial difficulties did not affect SkyCity," said Kersey.
However, it did mean Fortress had to take over the development of the project.
"That transition took a little bit of time but it is now complete," said Kersey.
SkyCity Centre is moving forward at full speed, according to Kersey.
"Fortress has been spending literally millions in getting the project to the stage it is at now," said Kersey, adding the $1 million condo sale office on Garry Street will be finished and open by early September.
CentreVenture sold St. Regis for $4M
CentreVenture, Winnipeg's arms-length development agency, sold the St. Regis hotel to Fortress for $4 million.
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CentreVenture CEO and president Angela Mathieson said it can take the building back if no work starts.
"Our role with respect to the corporation and the assets we hold is to have careful due-diligence in how we manage them," Mathieson said. "They do have projects that they have invested in that are proceeding in other parts of Canada. I mean, the development industry is very difficult, and it takes time, and at the end of the day, we want them to succeed — that's our goal."
Fortress recently took on the developer role
Fortresss recently started developing properties — within about the past 12 months.
It started developing Crates Landing in Georgina,Ont. and Capital Pointe in Regina in June 2014 and Winnipeg's SkyCity as well as Port Place in Saint Catherine's, Ont. in January 2015.
A September 2014 corporate report makes reference to its takeover of the development of Brock Village Munir on Duffins Creek in Pickering, Ont.
"We have a very experienced team here. Some who have been in the development and construction industry for over three decades. We have full confidence in our team to bring these projects to completion," Natasha Alibhai, a Fortress spokesperson, said in an email.
Fortress played a financing role in the projects it is now developing for several years prior to taking them over.
According to Fortress' corporate report it has been in the real estate game since 2008, raising money in the form of syndicate mortgages.
Municipal officials in Southern Ontario are optimistic Fortress will get the job done after years of waiting.
Officials said the projects have been moving forward since Fortress took over.
Fortress' former partner in SkyCity Centre now in creditor protection
The partially-built Collier Centre and Lakeview Condos in Barrie, Ont. is now for sale after a court approved putting it on the market.
This comes after former Fortress partner Mady Development filed for creditor protection due to problems with sub-trades and bad weather. The move comes despite selling all 82 condos and leasing more than two-thirds of the office and retail space.
More than $50 million is owed according to Jonathan Kreiger, the court appointed monitor from Grant Thornton LLP. Laurentian Bank is owed $30 million. Fortress is the second secured creditor with $16.9 million owing. The city of Barrie is owed $3.5 million.
"We are waiting for the outcome of the sales process, and we hope there is a good resolution for the stakeholders of the project," said Krieger, adding bids for the partially built building will be reviewed in mid-June.
On its website, Fortress said it is working on a strategy during the Mady creditor protection "with the ultimate objective of protecting investor principal and completing the project."