Richmond’s Hyde Park funding fails

Ottawa-based developer facing nine construction liens

As the excavator on the Hyde Park Residences Inc. project being built in the village of Richmond, Kanata-based Primrose Cartage & Excavating Ltd. was one of the first companies on the job site in 2010.

The firm secured a $1.5-million contract to dig out the foundation for Immanuel House, a 104-suite building planned as part of an 18-acre community with a private water system, medical facility and community centre designed for residents over the age of 55.

“They were one of the best-paying clients we ever had,” said Primrose president Shawn Stobo. “And then it just stopped.”

By October of last year, payments had dried up from local developer Courtyard Developments Inc., described on its website as a “family-run Christian development company.”

President Steve Hyde’s companies are currently facing nine construction liens filed by contractors who haven’t been paid for their work at the 6143 Perth St. job site.

“Payments were delayed because we were not able to complete previously committed construction financing,” Mr. Hyde stated in an e-mail to OBJ. “We are very close to securing the needed financing and resolving this issue.”

Reginald Stobo, CEO of Primrose and father of the company’s president, said the firm continued work on the job site unpaid until May. On Aug. 8, it filed a construction lien for $435,000 of unpaid labour and materials.

“That’s the problem. People continued to work thinking (Courtyard Developments) would get their problem sorted out,” he said. “It’s too bad, because I think it’s a wonderful project for Richmond.”

A LOT OF LIENS

The younger Mr. Stobo described the situation in Richmond as a “shemozzle,” and he’s not the only one frustrated with the project that is approximately 60 per cent complete.

Fortran Steel Contracting Ltd. filed a lien for $150,000 after its contract worth almost $1 million went unpaid.

“(Courtyard Developments) called us, (saying) they want us to go back to work. (We’d) get paid 10 per cent now and, when we finished, we’d get the (rest of the) money,” said Frank Donato, Fortran’s shop manager. “I don’t want to invest more money and, in the end, I’m not sure I’d get paid.”

His company began work on the project in its Greely workshop at the beginning of the year and stopped in July when payments ceased.

Fortran will attempt to sell the unused material purchased for the job, Mr. Donato said, but will be unable to bring in the $1 million promised in the contract.

George & Asmussen Ltd., a masonry company based in Breslau, Ont., was carrying out a contract worth more than $1 million.

“We haven’t been paid a penny,” said Bill George, co-owner of the company.

To protect itself, the firm said it had no choice but to file a construction lien worth almost $200,000 for work from February until July of this year.

Additional liens were filed by six other companies against either Hyde Park Residences or Courtyard Developments.

The elder Mr. Stobo remains positive about the development.

“I think they have a great project, I just think they’re overextended,” he said.

LIFE LEASE

Hyde Park Canada was founded in 2000 with the intent of building life-lease communities for those over the age of 55. A term coined by the Canada Mortgage and Housing Corp., life leases involve residents buying shares in the development that are then used by the developer to fund construction of the home.

Immanuel House investors had the option of purchasing a suite valued at $156,000 or purchasing “fractions” of a suite valued at $13,000 each. Returns on the investment include decreased rent or monthly revenue for those not living on the property.

But it wasn’t a lack of resident investment that caused the project’s financial difficulties, according to Hyde Park Canada’s website.

“Hyde Park Residences Inc. is not a speculation company,” it stated. “Immanuel House construction will only begin when sufficient suites have been sold...”

Another project by the development company is nearly complete and set to open in Almonte in September. The Hyde Park Jamieson Mills community at 100 Jamieson Ave. consists of 30 apartment units built using the same model as the Richmond location.

Mr. Hyde said the projects are completely independent and that the Almonte location is progressing well and on budget, He added it and will begin closing within weeks.