Toronto’s Black population could once again have its own financial institution if a trio of African Canadian organizations can muster enough community support to get the proposed Pan-African Credit Union off the ground.
Although the proposed institution is not exclusive to people of colour, the goal is to provide an alternate banking organization that better serves the Black community in the Greater Toronto Area, and eventually, the rest of the country, said Adaoma Patterson, president of the Jamaican Canadian Association, one of three entities behind the project.
“It’s a lofty goal,” Patterson said. “Well overdue, though.
The group has set an ambitious target for the credit union to open within two years.
“We hope that we can get through all of the stages to launch by the summer of 2021,” she said.
The main aim is to provide financial services to Blacks who have been traditionally under-served or un-banked, she said.
“People have been asking for it for a while,” she said. “This piece was the next logical step.”
While families will be the core of the credit union’s membership, making investments in Black-owned businesses is also key, she said.
“The community has always talked about economic empowerment,” Patterson said. “It enables all of the other conversations when you have that economic ownership.”
Running a credit union isn’t unfamiliar turf for the JCA, which operated one, that puttered along before it folded in the mid-1990s.
The Star reported on the demise of the organization in 1995.
Prompted by concerns for members, the Deposit Insurance Corporation of Ontario, which insured individual deposits up to $60,000, assumed control of the Caribbean Canadian African (Ontario) Credit Union on Aug. 31, 1995. Continuing operating losses were cited by the Ministry of Finance, according to Bill Foster, an insurance corporation vice-president, who replaced the board as administrator of the organization.
“This credit union has no reserves and is in a deficit position. Its liabilities exceed its assets,” said Foster at the time.
A lawyer for the former board members said, in early August, 1995, that the only problem was the credit union had spent money anticipating $750,000 in funding from the government and had only received $370,000 of it.
Plans to revive the credit union started to regain some life in 2016, after Patterson assumed the presidency of the JCA.
“We were tackling a lot of other things, but it seemed like the financial institution piece was missing,” she said.
Patterson soon discovered that the JCA wasn’t alone in championing the return of a black-focused financial institution. The Lions Circle African Mens’ Association, also had an interest in establishing a credit union of its own.
It made sense to join forces, she said.
The idea started gaining steam, after the Canadian Black Chamber of Commerce, which launched in 2019, joined the partnership. A steering committee, including people from financial backgrounds, has been meeting weekly, in recent months.
Andria Barrett, president of the Black Chamber of Commerce, said she often fields complaints from small business owners about difficulties in accessing financing from traditional banks.
“I’ve heard countless stories from Black business owners, who have made some money, but can’t get a business credit card or a loan, so we have to create our own,” she said.
Still in its infancy, the group is gathering feedback, via an online survey, to test the community’s appetite for the kind of financial institution they want.
Once the survey closes in March, there will be a clearer indication of whether the concept has enough backing to move forward.
“We have been working towards getting regulatory approval,” Barrett said. The chamber is hosting Rod Phillips, Minister of Finance, next week Thursday, to talk about this and other economic issues.
“We’ve been going to different locations and actually promoting the survey,” she said. “The response has been good overall.”
Patterson said early research revealed a daunting road ahead, as “not many cultural credit unions are being approved in Ontario.”
Provincial regulators must be convinced that a sufficient cohort of people will put their money into such a scheme.
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It’s one of the very reasons the former credit union failed in the 1990s.
“You have to show that people are actually willing to put some money into this as a startup,” she said.
In addition to providing financial services, the new credit union will offer financial education on topics from budgeting to wealth-building, Patterson said.
Entrepreneur and philanthropist, Denham Jolly, is already hailing the potential advent of a credit union as a way to break the financial chains holding back the next wave of entrepreneurs.
“It’s not easy for a Black person to get financing of any nature,” said Jolly, renowned for starting Canada’s first Black-owned radio station FLOW 93.5.
He said Black people have long struggled to walk into a bank and “be taken seriously.”
The former credit union, which went under in the 1990s, had a business plan that required it to hold $5 million in assets by 1997, wrote Cecil Foster, a journalist, author and scholar, in an opinion piece, printed in the Star, in 1995.
Jolly bemoans the missteps that led to the demise of the former credit union, but said that’s water under the bridge.
“I would like to be on the board of governors,” Jolly said about lending a hand on a new credit union.
Foster wrote about efforts by the Black Business and Professional Association and the JCA to to save the old credit union, including a membership drive to get more Black groups and individuals to open accounts.
Barrett said the past will help to guide the current application.
“We see the need and we learn from history,” she said.
Oana Branzei, associate professor at Western University’s Ivey School of Business, said there is a persistent disadvantage minorities, especially those of colour, face, and it holds them back from things such as business startups.
“It is not as severe as the U.K or U.S, but it’s certainly a problem,” she said.
Branzei said specialized credit unions are a catalyst for people of colour to bank in a dignified way.
“When this is a movement from within the community, it feels right,” she said.
Branzei said rejecting a community-driven effort, given the discrimination that has taken place, will be politically hard to do.
The first building in Toronto purpose-built for multiple occupancy was the St. George Mansions at 1 Harbord Street, directly opposite where the looming brutalist mass of Robarts Library would later sit.
In 1905, the intersection was part of a relatively quiet and affluent neighbourhood west of the University of Toronto campus.
Dappled sunshine filtered through young trees and little Model T Fords lined the curb. It was a “a district of substantial detached villas,” according to Richard Dennis in a 1989 research paper.
Dennis discusses the St. George Mansions and the real estate market leading up to their construction in detail.
As Dennis recalls, the permit for the building’s construction, the first of its type in Toronto, was issued in 1899 to A. W. McDougald, the president of the Improved Realty Co. of Toronto Ltd. He estimated the building would cost his company about $100,000 – the equivalent of about $2 million in today’s money.
The six-storey pressed brick and Bedford stone building, roughly “C”-shaped with a partially enclosed courtyard, took about five years to complete. Many of its 34 apartments had access to balcony space, though some were decorative Juliet-style affairs with heavy stone balustrades.
In 1904, shortly after it was finished, it contained 34 apartments and was home to 99 people, most of them wealthy middle-aged couples. Three barristers, two professors, two bank managers, and a director of an insurance company appeared on the occupancy list at that time.
Toronto was slow compared to other North American cities to build its first apartment block. The living concept had already appeared in Detroit, Cleveland, Buffalo, and other nearby cities, and was established in the form of “apartment hotels” in Boston and New York City in the 1850s and 1860s.
Apartment hotels were typically marketed at single, city-dwelling businessmen. Buildings such as the New York’s Stuyvesant Flats, built in 1869, had “between six and ten rooms each” and were let for $1,200 to $1,800 per year, according to Dennis.
The buildings of this type often had a central restaurant, laundry, recreational facility, barber, and dentist—complete miniature communities for the residents that turned a handsome profit for the owners.
The living concept became less communal and exclusive in the later decades of the 1800s. Apartment buildings that were constructed around this time were private and self-contained and became accessible to middle class families.
The apartment building concept wasn’t without its detractors.
Observers fretted that apartment living was unsuitable for families, prompting one Milwaukee landlord to offer free rent for every child born or marriage proposed in his building. “It is a shortcut from the apartment house to the divorce court,” Dennis quotes the author of Housing Problems in America, written in 1917.
The St. George Mansions were targeted firmly at middle class occupants when they were finished in 1904. Economic evidence suggested middle income families were less likely to move and were more numerous than the upper class renters, making them the perfect market to tap.
Toronto’s rents spiked massively in the years the building was under construction – up to 95 per cent between 1897 and 1906 – in part due to a sudden uptick in immigration. There were more new arrivals than the number of new homes could accommodate, making apartment blocks and attractive idea for developers.
The second Toronto apartment building was completed a year after the St. George Mansions on University Avenue. The stone, brick, and steel Alexandra was a larger building: 72 suites across seven floors with panoramic views of the city from its penthouse windows.
Like the apartment hotels of New York, the property included a communal dining room and appealed to middle-class renters.
By 1907, Toronto had its first apartment building directory that included Sussex Court at 389 Huron St. and Spadina Gardens at 41-45 Spadina Road, both of which still exist.
The St. George Mansions and the Alexandra are both sadly gone. The former survived until after the Second World War when it was repurposed as Trinity Barracks, the Toronto home of the Canadian Women’s Army Corps.
One contemporary account described the building as “cockroach palace,” suggesting time wasn’t kind to Toronto’s first apartment complex.
Today, U of T’s Ramsay Wright Zoological Laboratories building, built in 1965, occupies its former lot.
Cities west of GTA gain ‘notable traction’ in sales in first six months
New condominium buyers deterred by soaring Toronto prices are apparently venturing further afield to Hamilton, Kitchener and Waterloo, which offer more bang for their buck and the promise of new transit links that will improve accessibility.
Sales of new condominiums in these areas gained “notable traction” in the first six months of the year as regional economic activity picked up and Metrolinx moved forward with its $43-billion expansion plans, according to Altus Group, a market intelligence firm.
In Kitchener, sales between January and June rose to 806 units, up 93 per cent from the same period a year earlier, while 262 units were sold in Waterloo, a 51-per-cent jump. Though sales fell more than 20 per cent in Hamilton to 360 units, the city’s condominium market remains one of the most active outside Toronto, suggesting a continued flight to affordability, said Ray Wong, vice-president of data operations at Altus.
“The amount of demand in downtown Toronto, especially in the office market, has been well known for the last number of years and with that, demand for housing has steadily ratcheted up,” he said. “As these outlying areas are developed with more infrastructure in terms of restaurants and retail, it’s made them a lot more attractive.”
Those areas offer another powerful draw: the chance to secure a much larger space with a limited budget.
A buyer in Toronto with $500,000 to spend would likely have to settle for a one-bedroom unit of about 521 square feet, said Kruti Desai, manager of national research insights at Altus. But the same budget in Waterloo would secure a two-bedroom unit of 967 square feet.
Those in search of even more space could consider Barrie, Brantford, Cambridge, Guelph, Kitchener and St. Catharines, where $500,000 will buy a two- or three-bedroom unit with more than 1,000 square feet of space, she said.
“Individuals can get more bang for their buck when looking outside the Toronto market,” Desai said, adding that Hamilton, Kitchener and Waterloo are seeing the greatest amount of activity.
Momentum in Kitchener-Waterloo was linked both to affordability and to the economic growth kickstarted by Kitchener’s innovation hub and Waterloo’s Idea Quarter, a growing cluster of startup and technology companies operating in former BlackBerry Ltd. buildings.
Located close to the University of Waterloo campus and a future light-rail station, the Idea Quarter has attracted a range of firms — including OpenText Corp. and Auvik Networks Inc. — that “are now successfully competing for talent against Greater Toronto Area companies, helping stimulate condominium development,” Altus said in its report.
Hamilton, meanwhile, is expected to remain an attractive place to live for professionals working in Toronto, especially those who can take advantage of flexible working arrangements, Altus said.
A spike in new condominium sales in the city during the first three months of the year was credited to Television City Phase I, a 30-storey tower released in May 2017 that has since sold 80 per cent of the units on offer. Phase Two of the project, released in March, had sold 50 per cent of its units by the end of the second quarter.
On the opening day of sales for the glitzy new condo project in downtown Ajax, the lineup of hopeful buyers spilled out of the sales office onto the sidewalk, wrapped around the building and extended hundreds of metres.
Inside, the office was cramped like a concert venue. Sales agents struggled to find flat surfaces on which to sign contracts, as investors and first-time home buyers clamoured to get in on the ground floor of one of the region’s most anticipated new developments.
The frenzy continued for three straight weekends and Central Park Ajax was sold out in less than a month.
Two-and-a-half years later, ground has yet to be broken, the project is mired in litigation and frustrated purchasers are asking for their deposits back.
Central Park Ajax is not officially dead — a court decision expected sometime this fall could save it — but it is on life support. For now it seems destined to become the latest failed venture by the LeMine Investment Group, a company headed by Tong (Thomas) Liu, a developer who dreams big but can’t seem to get anything built.
Liu’s failure to deliver his ambitious projects has left hundreds of purchasers in the lurch. Meanwhile, the 35-year-old is embroiled in at least 14 lawsuits that allege, among other things, that he misrepresented himself, owes millions to investors and doesn’t pay his bills. Earlier this year a judge found that Liu engaged in self-dealing and acted in bad faith.
Liu admits his lack of experience has led to some mistakes, but he says his intentions were always noble.
“It was never the intention to hurt someone, to hurt investors or to hurt individuals who have worked with us before,” he said in an interview.
Among the sites of Liu’s good intentions is an overgrown, empty lot at 3070 Ellesmere Rd. That’s where he says he still intends to build The Academy, a 26-storey condo tower marketed to investors as providing much-needed rental housing to the growing student population at the nearby University of Toronto Scarborough. Presales for the project sold out in 2014, but construction has yet to begin and the project seems irretrievably stalled, although it is not yet canceled. “We’re stuck,” Liu said.
Leveraging slick marketing in a nearly insatiable real-estate market, Liu convinced investors, municipal officials and eager purchasers to buy into his plans, despite having no track record in development. He used industry accolades and photo-ops with politicians to project credibility, but there was little substance behind his self-promotional sheen. While he tied up valuable land and collected millions of dollars worth of deposits without ever breaking ground, purchasers watched their money lose value. Many are now priced out of the market. Investors, meanwhile, are turning to the courts to recover their losses as land that could have helped ease the region’s housing crunch remains unused.
Liu isn’t the only GTA developer to strand purchasers. Twelve condo projects have been canceled in the Torontoarea since the beginning of last year, according to market research company Urbanation. Two massive developments in Vaughan were recently canceled, leaving more than 2,000 buyers in their wake and leading to calls to increase protections for purchasers. With rising construction costs making it harder for developers to secure financing — or reap their desired profits — more cancellations could be on the way. Liu, who struggled to secure financing for his Ajax project and won’t say if he ran into a similar problem with The Academy, insists his projects are merely delayed.
The Star reviewed court records, documents obtained by Freedom of Information requests and interviewed more than 20 people with connections to Liu and his companies (former employees, partners and consultants, as well as industry executives who worked with LeMine), many of whom spoke only on the condition of anonymity, saying they feared a lawsuit from Liu.
“His intentions were excellent,” said architect Clifford Korman, whom Liu describes as a mentor. “His experience and follow-through were not.”
“I didn’t trust him at all,” said Allan Duffy, the former mayor of Richmond Hill who said he was courted by Liu as a potential advisor. “I dropped him and told everybody I could to do the same.”
“I’ll be happy to get my money out and move on,” said Ayesha Karatella, one of the Central Park Ajax purchasers.
Ontario’s Progressive Conservative government said it is looking into increasing protections for consumers when developers don’t deliver.
In the meantime, Liu said he’s looking forward to his next project.
LeMine’s Richmond Hill office could be a metaphor for the company itself — impressive from a distance but mostly empty. Emblazoned with the company logo, it stands two storeys and stretches the length of half a city block, just west of Highway 404 on 16th Ave. LeMine has only a handful of employees, Liu said, but he rents the entire building — he wouldn’t say for how much — because he said he likes to be able to accommodate partners, investors and contractors. On a recent weekday afternoon the office was quiet. The front door was locked and there was no receptionist.
Outside of real estate, LeMine’s other undelivered promises include a billion-dollar trade deal to send Canadian canola to China and a commitment to invest in a private rail project in Ottawa. Neither materialized. Liu said the canola deal fell apart because the Canadian government did not get a required import certificate from China. The director of the Ottawa rail project said he and his staff declined to work with Liu after reviewing his company.
There is nothing tangible to which Liu can point that his company has successfully delivered. Asked to explain LeMine’s greatest achievement he mentioned the company’s investment philosophy and also a “flash mob” organized in Yonge-Dundas Square in 2014 to celebrate the 65th anniversary of Chinese independence. “We have over 50-million views on the Internet for a single event,” Liu said, adding that the video was shared widely on WeChat, a Chinese social media platform.
In a wood-paneled boardroom, Liu, who grew up in China’s Hunan province — “famous for spicy food and pretty girls” — said the purpose of his company is to “create a platform for Chinese capital.”
Liu first came to Canada when he was 18, completing his final year of high school at a private boarding school in Hamilton. He earned an undergraduate degree at the University of Toronto Scarborough before opening a small immigration consultancy. When one of his Chinese clients asked him about development opportunities in Canada he realized there was an opportunity to connect Chinese investors with Canadian real-estate projects. He started LeMine in 2011.
In January 2014, he paid $1.9 million to buy the land at 3070 Ellesmere Rd., on which he planned to build The Academy. Liu hired Kirkor Architects, Korman’s firm, to design the tower, Devron Developments as project managers and the Milborne Group as sales agents.
Like Central Park Ajax, the project sold out quickly and was heralded for its sleek design. LeMine and its partners won the “People’s Choice Award” in an online vote by the Building Industry and Land Development (BILD) Association. Liu was named the Chinese Business Chamber of Canada’s “Person of the Year in Real Estate Development and International Business.”
Despite the accolades and rapid sales, Liu did not begin construction. He was backed by foreign investors but undercapitalized and he couldn’t secure sufficient financing, according to interviews with three people familiar with the project.
That didn’t stop him from simultaneously taking on another major project. In September 2014, he signed a deal with another developer to take over a multi-phase condo development on land owned, in part, by the Town of Ajax. That project would eventually become Central Park Ajax, envisioned as the first step in a long-term revitalization of the downtown area.
Rob Chaggares, who worked for LeMine as an accountant in 2015 and 2016, said Liu’s “downfall” was taking on too many projects at once. “I thought: What are you doing? Just focus on trying to figure out how to get a shovel in the ground.”
Liu saw himself and his company in grandiose terms, Chaggares said. “I remember one time he said, ‘Let’s not talk millions, let’s talk billions.’ ”
Liu is alleged to have mortgaged The Academy property to finance the Ajax development, according to a statement of claim filed by an investor named Xiangdon Zhao, who said he invested $2 million in The Academy and has not been paid promised dividends. He accused Liu of making “negligent misrepresentations” and leveraging the undeveloped property to fund other projects. Zhao declined to comment through his lawyer.
Liu, in his statement of defence, denied the allegations made by Zhao, whom he said is not currently entitled to any dividends. Liu also insisted The Academy project is still alive and that Zhao’s funds were used exclusively for its development.
Another group of investors in The Academy sued Liu saying he breached their contracts, cannot account for their money and won’t return their deposits. A default judgement, issued in May after Liu did not file a statement of defence, awarded the investors $541,275.
Before these troubles with The Academy emerged, Liu was building his relationship with the Town of Ajax.
In the fall of 2015, he arranged a two-week trip to China for Mayor Steve Parish and three other Ajax officials. There were business meetings, but also sightseeing trips to The Great Wall, Tiananmen Square and other tourist spots. (The town covered the airfare and cost of visas for the mayor and staff, while LeMine covered all other expenses on the trip.)
LeMine’s design for the project — a 10-storey building comprised of two, six-storey residential condo towers on top of a four-storey podium — was fully approved by December 2015. As part of the agreement, LeMine was required to begin construction by July 15, 2017.
The Town of Ajax enthusiastically endorsed the project. They publicized it on their website, advertised it on municipal property and even had government officials appear in LeMine’s promotional videos.
Purchasers who spoke to the Star said the town’s official stamp of approval gave them confidence the project was secure. “The town so openly supporting it the way they did led us to believe that this was pretty much a surefire thing,” said Christopher Chong-St. Amant, who is among the purchasers awaiting the outcome of the court case before deciding whether to ask for their deposit back.
Before sales launched, 3,500 people had already registered on LeMine’s website, according to Liu.
Carl Hamilton, another Ajax purchaser, remembers the rush to buy when sales opened. “There wasn’t really time to second guess because there were droves of people behind you that were ready to sign.” Chong-St. Amant said the sales centre was “like a madhouse” on the opening weekend.
As with The Academy, Central Park Ajax was a marketing triumph and pre-construction sales of the 410-unit project sold out in a matter of weeks.
Problems arose almost immediately. Just weeks after selling out, Liu met with the mayor and said he wanted an additional five storeys — a 50-per-cent height increase.
“I indicated that this would not have my support,” Parish wrote in an internal email describing the conversation to his staff. Parish wrote that he told Liu adding the extra storeys after selling the presales would be “unfair to existing purchasers,” “contrary to our longstanding agreement” and “could cause political difficulties.” Liu “did not want to hear this,” Parish wrote. “(He) seems to think he can have whatever he wants.”
Korman, the designer on both projects, said he believes Liu once again “undersold the project versus the construction costs. … He got caught the same way in Ajax as he did on The Academy — without enough finances to carry the project through.” Liu said this is not true.
Liens started to appear on the property from unpaid tradespeople. Town officials grew increasingly concerned. In September 2016, lawyers for the town wrote LeMine a stern letter, saying they were spending too much time responding to “various lien claimants and their lawyers.”
In November, fewer than nine months before the deadline to begin construction, LeMine sought to amend the approved site plan by increasing the project from 10 to 12 storeys and from two to three levels of underground parking. (The town says in court filings they did not consider the material LeMine submitted to be a complete application because it was missing key elements.)
Meanwhile, LeMine’s sales centre was becoming a symbol for the project itself. Rain and wind had badly damaged the facade, while the company’s signage was torn and peeling. The place looked abandoned. If LeMine couldn’t spend “a couple grand” — as one town staffer put it — to clean up the sales centre, how would it build a multi-million-dollar condo?
Ajax’s chief administrative officer, Rob Ford, who has since retired, wrote Liu twice in the first four months of 2017 to request “urgent” meetings. Ford listed a litany of issues: LeMine still hadn’t fixed the sales centre; they were ignoring emails; liens had not been cleared and new ones were being added; and LeMine still hadn’t secured financing to begin construction.
Real estate agents who brokered sales began contacting the Town on behalf of their clients with concerns about the viability of the project. In one email a Royal Lepage agent whose name is redacted lists a number of questions for the Town, including: “Does the Town of Ajax regret doing business with LeMine Investment Group as much as my clients and I?”
Some skittish purchasers started asking for their deposits back.
Problems persisted throughout the summer of 2017 and when the July 15 deadline to start construction came and went without any progress, Ajax sent LeMine formal notice that it intended to invoke its right to repurchase the land. This triggered a 90-day grace period. There was nothing stopping Liu from beginning construction at this point, the Town’s lawyers would later argue in court. “LeMine had only to file for its building permit, but it did not do so.”
Even after the grace period elapsed, Ajax gave LeMine a new deadline of Dec. 8 to pay its creditors, bring its mortgages into good standing and secure construction financing. That deadline also came and went. On Jan. 11, 2018, the town publicly announced its plans to repurchase the land and formally end its partnership with LeMine.
Six days later, a frustrated Liu stormed into Ajax’s town hall and demanded to meet with Ford. Liu had been asked to leave the offices three months earlier because he had made staff “uncomfortable,” according to internal town emails. On this occasion he was escorted out, the emails said.
Speaking recently, Liu said there was “miscommunication” with town officials, but he wouldn’t elaborate. He said he did have concerns about the “economic feasibility” of the Ajax project last year, but it is “ready to go now” if the town was willing to work with him.
In March, Liu sued Ajax for $300 million for the “unlawful termination of a land development contract.” Liu said the town did not have the right to repurchase the property because they had not yet made a decision on his revised site plan application. The town said his application was incomplete. The trial was held this summer and a decision is expected before the end of the year.
“The town is blaming the developer, LeMine is blaming the town; I don’t really know where the blame lies,” said Karatella, one of the purchasers. “But I don’t care whose fault it is, someone should be accountable for the money I could have made on my investment.”
In an emailed statement to the Star, Parish, Ajax’s longtime mayor, said that when LeMine approached the Town “it presented a solid proposal which detailed a vision for the project, work being done in other jurisdictions, resources and a healthy financial picture.”
While Liu, the town and purchasers who haven’t yet pulled their deposits await the court’s decision, Liu is dealing with a slew of other legal problems.
Among the lawsuits filed against Liu are former consultants and contractors claiming he owes them money; investors who said he can’t account for their funds and won’t pay them back; and allegations that Liu misused investors’ money.
In one case, decided earlier this year, investor Valbonne-Canada won a judgment against Liu for more than $2.1 million. The case related to a proposed townhouse development in Thornhill, which was never built or pre-sold to the public. Liu later sold the undeveloped properties, but not before he “pilfered” the project funds for his own benefit, paid his own company $761,000 in dubious “project management fees” and “drained” the bank account that once held the investors’ money, according to Valbonne-Canada’s allegations.
In a scathing decision, Justice Thomas J. McEwen ruled against Liu and found him personally liable, saying he acted in bad faith, engaged in self-dealing, and showed “an utter disregard for the legal rights of the Applicants.”
The judgment included a “notice of garnishment” against Liu, but Liu said it is not being enforced and he is working on a settlement. Valbonne-Canada’s lawyer declined to comment.
In another case in which both Liu and his spouse, Yixuan Wang, are defendants, Toronto Capital Corp. and other creditors are seeking to take possession of Liu’s Willowdale home, which was cross-collateralized with the Ajax property, meaning a default on either mortgage would count against the other.
Liu and his wife allegedly defaulted on the Ajax mortgage in April 2017 and owe more than $2 million, according to court documents.
A default judgment was issued in February, but Liu said he didn’t lose his house and the lender was eventually paid. He said he didn’t default on the Ajax mortgage. He did not explain why the judgement said he did. “I consider this as one of the hard lessons we had to learn when dealing with Jewish people … Jewish lenders.” Asked to explain the comment, Liu said, “On the deals, they’re difficult. … Chinese (people) tend to believe people are good. Sometimes when we have that perspective we corner ourselves and they take advantage of our willingness.”
Liu declined to explain what happened or who specifically he was speaking about. Frank Mondelli, the principal broker of Toronto Capital Corp., declined to comment.
Another case alleged Liu and his staff told Chinese investor Miaogen Zhou that he could obtain permanent residency in Canada if he invested in The Academy. Zhou alleged he paid Liu $496,703, which he believed would be held in trust. Despite “repeated requests,” Zhou claimed Liu has “failed to provide a single piece of information … showing what happened to Zhou’s funds.” Liu has not filed a statement of defence, but he denied offering Zhou permanent residency in exchange for an investment.
Liu declined to discuss the lawsuits in detail but said he has never used investors’ money for other projects without their permission. He suggested litigation is simply the cost of doing business in the development industry. “I believe if you look at any of the big developers in Toronto you would find the same or even much more trouble than what we have now.”
Speaking generally, Liu admitted to making mistakes, attributing it in part to being a first-generation Canadian running a complex business. “Sometimes we learn in a hard way,” he said.
Others said Liu got in over his head. “His reach far exceeded his grasp,” said a former consultant to LeMine with extensive experience in the development industry. “But it wasn’t a minor gap — it was a big gap.”
In an overheated housing market, it’s often the purchaser who is most vulnerable when developers like Liu falter, said James McKellar, professor of real estate and infrastructure at York University’s Schulich School of Business. In the “race to sell out,” McKellar said, Liu probably set his prices too low and didn’t account for realistic construction costs.
But the cost to purchasers isn’t just financial, McKellar added. “If you buy something with the anticipation you’re going to get it in four years, you’re planning your family, etcetera. The interest rate is a very small part of it. It really sets you back.”
For Karatella, 29, the two-bedroom condo unit she purchased in Central Park Ajax was going to be her first home. She hasn’t asked for her deposit back yet, but if the project doesn’t go ahead she isn’t sure what she’s going to do. “To get something comparable to what I purchased is $100,000 more,” she said. “It’s totally ridiculous that my money is just sitting there and nobody’s accountable for it.”
McKellar said there should be penalties for developers who can’t deliver. “People are paying the price for this exuberant industry,” he said. “This is why governments have to step in.”
NDP housing critic Suze Morrison, who represents the provincial riding of Toronto-Centre, agreed there should be more protections for condo purchasers, but she didn’t think the solution was penalizing developers. Morrison said the NDP is looking into possible reforms to the Tarion Warranty Corporation, but did not provide specific details.
Progressive Conservative MPP Todd Smith, the minister of government and consumer services, said in an emailed statement that his government is looking into the issue “to determine how best to strengthen the protection of consumers.” Smith did not provide specifics, except to say that the government will work with “industry, stakeholders and consumers as we determine next steps.”
Liu’s court troubles persist.
In June, a numbered company which is Liu’s current partner in The Academy — his original partner cut all ties with the project in 2016 — got a court order to temporarily freeze the property after alleging Liu kept trying to borrow against it without the company’s consent, according to the judgement. Liu said the property at 3070 Ellesmere was not frozen. He did not explain why there are documents showing otherwise. Property records show there are three mortgages on the property totalling $13 million. Liu said the actual amount owing on the property is less than that.There is also a $3.95 million construction lien.
Sitting in his boardroom, Liu agreed his company is in trouble.
“Yes, I am,” he said. “(But) you say trouble, I say it’s difficult matters that we need to handle. We’re in business. Every business has difficulties and we need to manage them.”
Some of Liu’s former partners said his reputation within the industry is in tatters, but Korman said he would be willing to work with Liu again — as long as he’s paid upfront. “I’m not stupid.”
Liu said there are still lots of good things happening with his company. New investors are coming in every month, he said, and he’s working on launching a new project. He declined to discuss it.
Source: Toronto Star – By BRENDAN KENNEDY Investigative Reporter Thu., Sept. 27, 2018
In 1985, when Ronni Fingold launched Forest Hill Real Estate in a tiny 450 square foot space in the heart of Toronto’s Forest Hill Village, she had no idea that her vision of a boutique luxury family run brokerage would quickly become a formidable force in the area’s real estate market and beyond. Today, with 31 offices established across southern Ontario, the idea of family is still one of the key driving forces behind the day to day business and ongoing expansion of the company.
“Forest Hill was born around a kitchen table in my home,” Ronni says. “Surrounded by family and loved ones, we imagined a brokerage that would offer greater sophistication and service while always offering the personal touch
Ronni maintains that real estate is most often about family, and that it’s a sacred trust to help families find the right home while passing their well-loved property on to new owners.
“The business is also a family,” says Ronni. “It’s a place where friends and associates can work in a supportive nurturing atmosphere to achieve prosperity and success.” In addition, Ronni’s children and grandchildren have also built their own careers around Forest Hill Real Estate. They recognize the unique and thriving atmosphere that their grandmother has developed and take pride in contributing to this legacy.
In fact, Ronni’s daughter, Catherine Himelfarb Borden, is the Branch Manager of the Yorkville office. Catherine’s son, Rich Himelfarb is a successful realtor and her daughter, Rebecca, serves as both the corporate Head of Recruitment and the Director of Operations for Forest Hill Real Estate Yorkville.
Early on, Ronni welcomed partners, David and Elie Wagman, who were integral to taking the company to an even greater heights. As experts in the Forest Hill marketplace, they understood real estate and the clientele in the area intuitively. Today, they are still a dynamic force and their son, Jeffrey Wagman is the Broker of Record for the entire company continuing the tradition of engaging the strength and talent of family members in expanding the business further.
Forest Hill’s offices stretch from Oakville to Muskoka and smaller centres including Peterborough and Gilmour to the east. Each office is looking to hire new, qualified agents at the same time as the company is open to establishing new branches. But the expansion has never been driven by growth for growth’s sake.
“Unlike many brokerages, we award new offices according to an attractive well thought-out business plan,” says David Fingold, Ronni’s husband and the company’s president. “Our focus is on attracting people who have demonstrated success in the business and are qualified to run their own shop. We look at sales history, new office location, the knowledge and integrity of the agents associated with the business and the applicant’s trajectory for growth. You don’t purchase a Forest Hill office—you’re asked to join us by demonstrating merit.”
There are a multitude of benefits that come from establishing a Forest Hill Real Estate branch that David reviews with all aspiring Managing Partners.
Ronni Fingold notes that the made-in-Toronto Forest Hill brand has developed solid traction outside the city. “The words ‘Forest Hill’ are associated with quality wherever they’re used,” she says. “Our distinctive brand emblem and signage announce our presence in every market we enter.”
“We’re seeing a lot of new offices established by motivated and qualified brokers,” she says. “But we’re particularly proud when someone decides to switch an existing brokerage to the Forest Hill name. They’re trading their success for the promise of greater success.”
Randy Drohan of the Mississauga suburb of Streetsville exemplifies that transition. His family has planted deep roots in the area. Following a successful real estate career, he launched Drohan Real Estate in 2014—along with the support of his mother’s accounting acumen.
But Drohan didn’t want to relinquish control of the business he’d founded. At the same time, he realized that a successful real estate brokerage needs to do more than simply buy and sell real estate. It also needs to grow its brand.
“In Streetsville, Forest Hill was already a well-known brand, synonymous with luxury and prestige. In our discussions, Forest Hill offered me what I needed to grow the brand without asking me to give up the company.”
Drohan unfurled the Forest Hill banner in January 2018. A dozen employees, including seven agents, made the transition.
“Six months later we’ve doubled the size of the company to 24 employees,” he says. “The Forest Hill name has made it significantly easier for us to attract and hire the type of quality agents we need to achieve sustainable growth..”
Drohan says he is proud to have the Forest Hill name on the sign over his brokerage door. “Our family has now become part of Forest Hill’s family.”
Forest Hill Real Estate is now the fastest growing luxury brand in the country with more than 900 active agents across Ontario and plenty of room to grow within the province. Ronni, her partners, her own family and her business family have developed a unique formula for marketing, promoting and selling real estate in Ontario’s exciting housing market and for this privilege, they are extremely grateful and proud.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Forest Hill Real Estate
The potential for rapidly dropping prices in southern Ontario is forcing appraisers to have a second look at properties they have already assessed to see how much the market has shifted.
Claudio Polito, a Toronto appraiser and principal owner of Cross-town Appraisal Ltd., says lenders basing mortgage decisions on value, as opposed to income and credit history, are really trying to stay on top of a market that appears to be changing rapidly.
By his estimates, prices in the Greater Toronto Area have dropped anywhere from five per cent to 15 per cent over the last 30 days. The next set of statistics from the Toronto Real Estate Board are due out Monday and will mark the first full month of data since provincial changes to cool the market that included a tax on foreign buyers.
“Lenders I deal with they want to know if your property is still worth $1 million if they are loaning you say $650,000,” said Polito. “They don’t base it on anything else. We have to be precise because it’s not a bank, (smaller lenders) can’t afford to lose a dollar.”
It wouldn’t be the first time, appraisals have lagged purchases prices — a phenomenon that previously caught some Vancouver buyers by surprise when it was time to close.
A lower appraisal could increasingly be an issue for people with previous deals, not yet closed, in Toronto, especially when buyers are coming up with only the minimum 20 per cent down payment for a non-government backed loan.
If you buy a home for $1 million with $200,000 down, you need an $800,000 loan to close. But if your appraisal comes in at $900,000, your financial institution will only agree to a maximum $720,000 loan based on 80 per cent debt to 20 per cent equity. Those buyers are left searching for a second mortgage — at a higher rate — to get the extra $80,000 if they can find someone to loan them the money.
“We are seeing some people walk away from deals,” said Polito, because they can’t close — a move that comes with myriad problems if the sellers seek legal damages. “What we are seeing is properties sold in January and February, values are still there but if it sold in March, it is very hard to support the value.” Toronto prices rose 33 per cent in March from a year earlier.
Keith Lancastle, chief executive of the Appraisal Institute of Canada, said the warning for buyers is probably not to get into bidding wars if they don’t have a cushion to come up with a higher down payment. “I would expect it’s quite routine where the appraisals are being done and it’s coming in at lower than people hoped to see.”
He says the volume of sale in Toronto makes it easier to find comparable sales but the pace at which the market is changing makes it “tough to keep up” and that forces appraisers to look at some data and consider whether it’s an anomaly or part of trend.
A more difficult market to assess is one like Calgary, which has seen transactions drying up, making comparisons hard to find.
“The more valid data you have access to, the simpler the task of preparing the appraisal becomes,” said Lancastle. “When the Calgary market was slow, the lender would say we want sales that are within the last 90 days for comparable. If nothing has sold for comparable for 90 days, you ask the lender if they want to extend the time or the geographic window.”
Nicole Wells, vice-president of home equity financing at Royal Bank of Canada, said her institution is relatively conservative when it comes to appraisals to begin with — limiting the impact of a shifting market.
“Given how quickly prices rise, you really have to make sure you are adequately appraising the property,” said Wells. “We always promote affordability, making sure you know what you want and what you can pay. It’s really dangerous to get into a bidding war (with the minimum down payment).”
Source: Financial Post – Garry Marr | June 1, 2017