Alvarez & Marsal, the court-appointed receiver for a troubled 85-storey tower expected to be Canada’s tallest residential skyscraper, is replacing the project's general contractor and developer.
Toronto-based Skygrid Construction has been put in charge of completing The One in downtown Toronto, replacing the project's original developer, Sam Mizrahi and his related companies.
Construction of The One started in mid-2017 and plans included 416 luxury condominiums, as well as a hotel on floors five to 16, ground-level retail and a restaurant on the third floor. The project was once slated for completion in 2022, but has faced years of delays and other issues before going into receivership in October.
The project's senior lender, a division of South Korea-based KEB Hana Bank, asked the Ontario Superior Court of Justice to appoint Alvarez & Marsal's Canada office as the receiver of Mizrahi’s companies in October after The One's developers failed to make loan payments related to the project. At the time, Mizrahi and his company were still expected to oversee the project's completion.
But that's not the case anymore: Alvarez & Marsal has hired Skygrid Construction as the new construction manager of The One, effective March 13, according to a statement posted this week by Alvarez & Marsal.
CoStar News was unable to reach Mizrahi through phone or email for comment.
'Dreamer Who Delivers'
The One is one of the most audacious real estate projects in Canadian history and bears a name inspired by its address at 1 Bloor St. W, one of the key intersections of Canada’s biggest city. The development sits at the corner of Yonge and Bloor streets, where Toronto’s two main subway lines meet. The One's website describes the tower as “the singular vision of Sam Mizrahi, founder and president of Mizrahi Developments. A dreamer who delivers.”
The luxury condo structure remains under construction with concrete poured more than halfway to the top. If built to full height, the building would reach 1,076 feet, overshadowing Canada's current tallest conventional building, the 72-floor, 978-foot First Canadian Place in Toronto, although both are not as tall as Canada's tallest tower, the 1,185-foot CN Tower in downtown Toronto.
Mizrahi purchased the site for The One in 2014 for $300 million, receiving municipal permission two years later to build an estimated $1 billion project. Mizrahi signed a credit agreement for $1.2 billion in August 2019 with the project's senior secured lenders, according to court documents. The project's current estimated cost is expected to surpass $2 billion, according to court documents.
Mizrahi, president and founder of Mizrahi Developments, rose to prominence in the world of real estate after gaining a fortune from his dry cleaning business Dove Cleaning. Mizrahi was a partner in The One with Jenny Coco, CEO of the Coco Group, a company that bills itself as Canada’s largest family-owned building and paving company.
Coco remains involved with the project but a Superior Court document from October described her relationship with Mizrahi as "acrimonious" and said the two have "significant and material disputes about their respective obligations and their involvement in the project generally." CoStar News was unable to reach Coco through phone or email for comment.
Since being appointed to oversee The One's development in October, Alvarez & Marsal has leased property at 181 Davenport for a sales office and at 625 Church for mock-up hotel suites, according to court filings.
The One's new builder, Skygrid, is a Toronto construction company that has been led by Fernando Tito since 2012. CoStar News was unable to immediately reach a company representative by email to obtain more details about their plans for the project. Knightsbridge Development will continue in its role as Alvarez & Marsal's project manager.
The new court orders put into question whether the structure will be completed in the same form as Mizrahi originally planned. The Globe and Mail reported this week that Mizrahi wrote them an email saying that he was not willing to "compromise or change the vision we have built and developed to date on The One."
Financial conditions have soured on the Toronto condo market recently, as indicated in data from Urbanation, a group that analyzes the condo market. New condo sales in the greater Toronto area fell 41% in 2023 from the prior year, reaching a 15-year low, according to Urbanation.