The City of Thompson has received the lion’s share of money owed to it by the former owner and the receiver of Forest View Suites, with the exception of about $226,000.
The apartment complex, better known by its former name of Princeton Towers, was sold by receiver Ernst & Young in September 2022 for a price of $11,100,000, according to a document filed with the Manitoba Court of King’s Bench in October of last year. Ernst & Young was appointed as receiver in July 2019 when Polar Bear Properties, which acquired the two nine-story apartment buildings with a total of 275 suites in 2009, was no longer to pay the costs of a $23,500,000 mortgage it acquired from RBC in 2016.
Receiverships are a way for secured creditors (such as the bank that holds the mortgage on a property) to recover amounts they are owed when a debtor defaults on loan payments.
At the time the buildings were placed into receivership, Polar Bear Properties owed about $25 million, including $23,130,300 to RBC and about $1.5 million to the city in the form of unpaid property taxes, unpaid water bills and other debts. The company had only about $65,000 cash.
Further debts to the City of Thompson accumulated over the course of the receivership, which was discharged by the court on Jan. 30 of this year, totalled about $3 million.
A memo from Gail Taylor to mayor and council that is part of the agenda for the Feb. 6 committee of the whole meeting said that the receiver has paid the city $4,114,051.52 of $4,340,197.14 that was owing, which included amounts owed by Polar Bear Properties at the time it went into receivership and amounts incurred between then and when the receivership was discharged.
Taylor’s memo recommended that the city write off the remaining $226,145.62.
“As this was a receivership, there are no other means to collect the amounts that are owed,” Taylor wrote. “This should not set precedence for future requests to have taxes, utilities or receivables written off.”
RBC received about $6 million of the proceeds from the sale of the towers to a B.C.-based company.
A company contracted by Ernst & Young to sell the buildings established an asking price of $15,500,000 and received multiple expressions of interest, including 17 from prospective buyers who signed a confidentiality agreement that gave them access to various information about the towers, including historical financial and operational information.
The towers have a checkered history. Originally developed as upscale apartments with balconies and great views of Thompson, as well as an indoor pool and sauna, they were, by the time that Polar Bear Properties went into receivership, undesirable addresses with elevators that frequently broke down and the locations that Thompson RCMP and Thompson Fire & Emergency Services were called to most frequently. In September 2019, a fire in the north tower, which RCMP and TFES believed occurred due to suspicious circumstances or deliberate criminal action, according to court documents filed by Ernst & Young, forced the evacuation of the building and resulted in occupancy being prohibited until damage from the fire and previously existing health hazards were remedied. At the time of the fire, the building’s insurance coverage had lapsed and losses related to the fire were not covered.
