Court gives Jameson House developers two months to raise more money
Derrick Penner
Sun
A view of the financially strapped Jameson House condo development at 838 West Hastings in Vancouver shows the back of the Ceperley Rounsfell building suspended above an excavation for a new parking garage. Photograph by: Jenelle Schneider, Vancouver Sun files
The 1921 heritage building is supposed to be part of the finished building design, above right. Photograph by: Jenelle Schneider, Vancouver Sun files
Attempts to refinance and resurrect construction of the landmark Jameson House condominium project in downtown Vancouver are alive until at least April 30, although a group of pre-sale buyers is fighting the process in a bid to get out of their contracts and recover their deposits.
B.C. Supreme Court Chief Justice Donald Brenner on Wednesday signed an order allowing Jameson House developers to secure $6 million in interim financing to start work on the 37-storey tower’s parking garage.
Brenner also extended until April 30 the developers’ court protection from creditors under the Companies Creditors Arrangement Act allowing them to try to replace the construction financing they lost last November when a key lender pulled its support for the $180-million tower.
“I’m satisfied [the developers] are making reasonable progress,” Brenner said about the developers’ attempts to shore up their financing and put construction on track for a Dec. 31, 2010, completion date that would satisfy terms of the project’s pre-sale contracts with buyers.
And keeping those pre-sale contracts in place, John Sandrelli, the developers’ lawyer argued, is essential for refinancing the project.
But a substantial minority of those buyers, initially enamoured of Jameson House’s design by world-famous architect Norman Foster, petitioned the court on Wednesday not to allow a continuation of the developers’ court protection so they could try to rescind their contracts and get their deposit money back.
Diana Becker, one of the buyers who fell in love with the Jameson’s design and specifications, said she and others have lost confidence that the developers, Vancouver‘s Pappajohn family under the name Jameson House Properties Ltd. and Jameson House Ventures Ltd., can deliver the project.
“I clearly believe the reason the building didn’t go forward [although] it had all the components of being a beautiful building, a landmark building for the city of Vancouver, was because the developers did not have the capital required,” as they stated in the project’s disclosure statements, she said.
Michael Bertoldi, the lawyer acting for a number of the buyers, argued that after four months of trying to come up with a plan to carry construction forward, his clients didn’t see enough evidence that a plan was even possible.
The developers halted construction when the project, on Hastings Street between Hornby and Burrard, was a hole in the ground. A unique truss structure holds a two-storey heritage building, being restored as part of the project, suspended in mid-air.
Becker is also skeptical that the luxury tower can be delivered as promised within its now approximately 18-month timeline for completion.”It’s never been done before,” she said.
But Brenner’s decision noted the buyers’ deposits made were held in trust and protected, and they had binding contracts that give the developer until the end of 2010 to deliver on them.
Brenner said the purpose of the CCAA is to allow a company time to work with its creditors on a plan to carry business forward, and at this point the Jameson’s creditors are co-operating with a plan.
Sandrelli, the developers’ lawyer, said they hope to have a plan complete by the beginning of April that would be approved by the end of April. So far, he said, four key creditors in the project’s consortium of lenders, have not opposed measures proposed for the plan.
Reports to the court from the Jameson project’s CCAA monitor, Ernst & Young, said the developer had reached an initial agreement to bring another developer, Bosa Properties, in as a partner in the project.
A definitive agreement, to be finalized within the extended protection period, would see Bosa acquire an equity interest in the project, take part in management of construction, offer guarantees to the senior construction financiers and fund part of a subordinate loan that would add to the financing needed to resume construction.
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