Ontario Construction News staff writer
A large residential project at the busy intersection of Baseline Road and Clyde Avenue has been left as an unfinished concrete shell for almost three years, a victim of a significant financial failure by a major Quebec company.
The two-tower project at 1357 Baseline Rd. broke ground in 2022 and was initially intended to be a retirement residence. However, construction stopped late that year when the original co-developer, Montreal-based Groupe Sélection, sought creditor protection under the Companies’ Creditors Arrangement Act (CCAA).
At that time, the project was a 50-50 joint venture between commercial real estate trust Smart Centres and Groupe Sélection, one of Canada’s largest private operators of senior living facilities.
As per CCAA filings managed by monitor Pricewaterhouse Coopers (Pw C), Groupe Sélection entered creditor protection in November 2022 after being caught in an unfortunate economic situation. The company had built up over $5 billion in assets during a time of historically low interest rates. When central banks began raising rates aggressively in 2022 to fight inflation, the developer faced soaring borrowing and refinancing costs.
At the same time, the COVID-19 pandemic heavily impacted the senior living sector, increasing operational and health expenses while reducing occupancy rates and slowing down pre-leasing for new developments. This put pressure on Groupe Sélection’s cash flow just as their debt servicing costs were rising.
The final blow came when a group of major Canadian banks, owed hundreds of millions of dollars, lost faith in the company’s management and rejected their proposed restructuring plan. The lenders pushed for a creditor-driven restructuring through Quebec courts, which led to the liquidation of Groupe Sélection’s assets and quickly unraveled joint ventures across Canada – including the towers in Ottawa.
After navigating a complex legal process, Smart Centres – which also owns the adjacent Laurentian Plaza strip mall – gained full ownership of the property. According to recent financial disclosures from Smart Centres, they completed the project’s foundational concrete structure to protect it before halting construction.
The developer has since changed plans for this project from a retirement community to a 402-unit residential apartment building. However, getting construction back on track has proven challenging. To restart work, Smart Centres is looking for new partners and financing while also having to go through a site-plan renewal process with the City of Ottawa due to changes in how they intend to use the building.
The lack of progress has frustrated nearby residents who see these unfinished buildings as an eyesore amid an ongoing housing shortage.
“I find it kind of sad. Every time we go by we say, ‘Is anything happening?’ Nothing’s been happening,” one local resident told Ottawa in a recent broadcast about the site. Another resident described it as an “eyesore,” saying that “more could be done and it’s taken too long to do it.”
The stalled towers remain a frequent topic among complaints from constituents for River Ward Coun. Riley Brockington.
“These buildings have been empty for way too long. They are now an eyesore within the community,” Brockington told . “We want to see this project completed. We support Smart Centres advancing with these residential towers. Let’s get it done.”
With the concrete structure exposed to harsh Ottawa weather conditions for three winters now, some residents have raised concerns about its structural integrity. Brockington assured them that safety measures are in place at the site.
“My understanding is the building is sound,” he said. “It is monitored 24 hours a day. There are cameras, and it is visually inspected on a normal frequency.”
While Brockington indicated that discussions with Smart Centres suggested completion of municipal site-plan processes should happen this year, there isn’t any set date yet for when heavy machinery will return or when units will finally be available for tenants.
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