A bid to sell the troubled Atmosphere project on Alderbridge Way and No. 3 Road in Richmond has been paused pending efforts to make it a development-ready project for prospective purchasers.
The outside closing date for the project has been extended several times, most recently on Nov. 1, when the courts approved an extension until Dec. 27.
But documents filed with B.C. Supreme Court in advance of a Dec. 9 hearing in Vancouver note that Bowra Group, the court-appointed monitor, “has not received any bids that are compliant” with the sales and investment solicitation process (SISP) underway since the spring. The process is being handled by Cushman & Wakefield ULC.
Court documents do not provide on the bids received to date.
With the consent of the project’s primary creditor, Romspen Investment Corp. of Toronto, Bowra suspended the SISP “until the building permit issue is resolved.” It has requested a stay of court proceedings until Feb. 24, 2023. It expects to initiate a new sales process in the spring.
A key hurdle is the fact the project’s building permit has expired and a new one is needed.
“[We] previously extended the SISP dates in anticipation of successful negotiations with prospective purchasers,” Bowra reported Dec. 7. “All prospective purchasers have indicated that until the new building permit is issued, no final offers would be submitted.”
But to obtain a new building permit, the services of GBL Architects are required. GBL, however, is owed approximately $540,000 for architectural services provided to Alderbridge LP, the project’s original developer, under an agreement with South Street Financial Corp.
Without the cooperation of GBL and a new building permit, Bowra told the court that the project would lose its density entitlements and command a lower value from the market. It could also experience a delay of up to 18 months while a new owner secures approvals.
Bowra has therefore asked the court to compel GBL to continue providing services so that a building permit can be obtained, the sales process can resume, and creditors can receive the best possible resolution of their claims.
A brochure Cushman & Wakefield prepared for the property earlier this year described it as “one of the largest, high-exposure properties along No. 3 Road,” noting that “site excavation and other work-in-place completed, enabling significant time and cost savings in the overall project timeline.”
It added that “exceptional market receptivity” to the project meant that “strong end-unit sales … can be assumed.”
The project’s buildable square footage exceeds a million square feet, with 822 residential units averaging 750 square feet and approximately 200,000 square feet of office and retail space.
Alderbridge acquired the property in 2017 from UEM Sunrise (Canada) Alderbridge Ltd. through a numbered subsidiary for $113 million. It initiated construction in 2019 with plans for an office tower and 824 residential units in six towers. Five 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.
Court documents indicate that 288 of the residential units in the development sold following the project’s launch in 2019.
But court documents indicate that construction halted in September 2020 following challenges to secure construction financing during the early months of the pandemic. An initial effort by Cushman & Wakefield to sell the property in 2021 in early 2022 without a deal.
With obligations totaling $346.1 million, the project sought protection from creditors under the Companies Creditors Arrangement Act on April 1.