Court approves $298-million 'sale' of Trump Tower Toronto to creditor

Mar 31 2017, 8:45 pm

A judge with the Ontario Superior Court of Justice has approved the sale of the controversial Trump International Hotel & Tower to the main debt holder of the tower after no other bids were submitted.

The controversial hotel and condominium building was listed for sale by commercial real estate broker CBRE in January after a court-mandated receiver minimum sale price of $298 million, which was $3 million less than what the building owed.

However, the tower received no other bids other than a “stalking horse” offer of $298 million from JFC Capital, which acquired the building’s debt last fall.

The 65-storey, 908-foot-tall tower – one of the tallest buildings in the city – is located on the southeast corner of Bay Street and Adelaide Street in downtown Toronto’s financial district. It consists of 211 hotel units, 74 market condominium units, commercial and retail spaces, and amenity spaces.

The tower bears the name of the US President, however, he does not own it and is only engaged in the project through a licensing agreement that utilizes his brand and hotel operations. It was built and originally owned by Talon International Development, which defaulted on its construction loan in 2015.

A lightning rod of controversy

Construction began in 2007, taking six years to reach substantial completion, and cost $500 million. Elements of the building remained uncompleted nearly a year after the official opening date, and plans by the developer to connect the building to PATH underground network were canceled over high costs.

There have also been concerns over the building’s physical condition. Glass fell from the 34th floor of the building and damaged cars below in 2012, and a cracked window in 2015 also led to another street closure as a safety precaution.

The area around the building was also closed for two days in the summer of 2015 when the building’s antenna spire was seen swaying in the wind.

Investors in the tower have also sued the developer over lower-than-expected profits from condominium sales. As well, hotel room occupancy has been below projections.

The tower project originally began as a joint venture between the Ritz-Carlton hotel chain and another developer, however, the partnership collapsed and was not revived until Talon joined the project.

Kenneth ChanKenneth Chan

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