The developer of a high-profile site in downtown Richmond is seeking protection from creditors.
Alderbridge Way LP sought protection April 1 under the Companies Creditors Arrangement Act (CCAA) to restructure its operations. The company faces $346.1 million in obligations, while assets total slightly more than $351.4 million.
The largest amount, $175.3 million, is owed to Romspen Investment Corp. of Toronto. A smaller amount of $76.7 million is owed to unit holders including R. Jay Management Ltd., J.V. Driver Investments Inc., MNB Enterprises Inc., G. Wong Holdings Inc., Gatland, REV, Voth Developments Ltd., Inland Consulting Ltd., Dennis Schwab and Lesley Schwab, and South Street LP. Most of the unit holders are also limited partners of Alderbridge.
According to court documents, the limited partners are proposing an arrangement that would convert a portion of the amount owed them into equity, thereby strengthening the developer’s balance sheet and allowing it to repay Romspen.
The proposal will go before B.C. Supreme Court on April 25 for approval. If it is not approved, company assets could be sold.
The court has appointed Alvarez & Marsal Canada Inc. of Vancouver to monitor the company’s affairs. It is also working with the developer’s general partner, Alderbridge Way GP, and its wholly owned subsidiary, 0989705 B.C. Ltd.
Alderbridge Way LP is the developer of Atmosphere, a stalled mixed-use development at Alderbridge Way and No. 3 Road opposite Lansdowne Centre.
Construction began in 2019 with plans for an office tower and 824 residential units in six towers. Five of the towers were to be sold as condos, while one tower would have 112 market rental units and 38 affordable rental units.
A portion of the project was to have been purchased by Global Education City (Richmond) LP, an affiliate of CIBT Education Group Inc., for school facilities and student housing.
But court documents indicate that construction halted in September 2020 following challenges to secure construction financing during the early months of the pandemic. Cushman & Wakefield was retained to sell the property in May 2021, and 31 parties were contacted. Two letters of intent were received and negotiations with “a well-known property developer in British Columbia,” moved forward. However, the negotiations ended in January 2022 without a deal.
It’s not just the fate of the property that’s hanging in the balance. Court documents indicate that 288 units in the development have been sold since 2019, resulting in $48.4 million worth of deposits being held in trust. Many purchasers have been left in limbo while the financial and legal process has played out.
Alderbridge Way LP acknowledged the hardship to buyers in a statement released to media April 1.
“Alderbridge Way LP, the owner of Atmosphere, wants to assure our presale buyers that their deposits are held in trust and protected, and our priority is to work towards maintaining their contracts and advancing the project,” it said. “It is disappointing that we reached this point, and we understand and apologize for the frustration this has caused to people who have pre-purchased strata units and invested in Atmosphere. We assure you that we are moving forward with your best interests in mind.”
CIBT, for its part, announced in its latest annual report that it “expects to fully realize all amounts based on the value of collateral securing the deposit.”
Alderbridge Way LP acquired the property through its numbered subsidiary in 2017 for $113 million. It was acquired from UEM Sunrise (Canada) Alderbridge Ltd., which had paid $70.2 million for the property in 2014 with ambitious plans for a mixed-use development on the site.
