1. Why is the Museum Flats project being cancelled?
We are not able to obtain construction financing for the Museum Flats. Banks require a minimum of the following to proceed with a financing:
• A budget verified by a third-party cost consultant that shows an industry standard and viable profit margin;
• All development approvals obtained and building permits available;
• Adequate guarantees.
We do not have a viable budget acceptable to Lenders and despite our best efforts, we have not secured all of the development approvals or available permits.
2.What were the approvals/permits that were not acquired?
The site-specific Official Plan Amendment and Zoning Bylaw were finalized at the Ontario Municipal Board (‘OMB’) on May 27th, 2014 through a settlement process. The final order on the planning instruments was released by the OMB on August 11th, 2015 when the Section 37 Agreement was finalized and executed.
Although the zoning is in place, we have been unable to obtain the following approvals processes despite our best efforts:
• Draft Plan of Subdivision;
• Site Plan Approval;
• Minor Variances;
• Building Permits.
Without the Draft Plan Approval, none of these necessary approvals are obtainable. We have been actively seeking approval of the Draft Plan of Subdivision application for a number of years.
3. Why was the project cancelled and instead of just delayed? Why is the project cancelled now when there is another year to notify purchasers?
We know today that the budget will not allow the Museum Flats project to proceed. As time progresses, the cost numbers only get worse and our revenue is fixed. As soon as we knew the prospect of proceeding was no longer possible, given the circumstances, we let the Purchasers know.
4. I'm a purchaser. How am I just hearing about this? How do I get my money back?
Each Purchaser should have received a letter dated October 25, 2017 and the return of your deposit by registered mail. If you have not received letter and your deposit, we may have incorrect information on file and ask that you contact us and reconfirm your address at email@example.com
5. What cost increases have caused the Project Budget to no longer be viable?
The delay in planning approvals has caused the hard costs from the point of sale to date to increase by 13%. Recently, the industry has been experiencing the most significant cost increases in a decade. Projected Budget Soft Costs for the Museum Flats (all consultant costs and development fees and charges) will have almost doubled. Hard Costs are expected to increase by 8% over the next year.
Our soft costs will also continue to increase over the next year until all the development approvals and permits are obtained.
6. Will the Museum Flats project be relaunched? If so, when?
The Museum Flats in its current form and design cannot be relaunched. We will go back to the drawing board and determine the best possible way to get the entire Lower Junction project moving forward. We cannot proceed to market with this phase or any other residential phase without building permits being available.
7. What incentives, if any, will the Museum Flats purchasers be given for future residential development within the Lower Junction neighbourhood?
We have had numerous conversations with disappointed Purchasers and we have stated that all Museum Flats Purchasers will be given a ‘first opportunity’ before any other party. This will come with a discount to be determined at the time. To be clear, we will not be relaunching Museum Flats, but whatever residential phase is put forward in the future within the Lower Junction project, this ‘first opportunity’ and discount will apply.