Major Vancouver developer seeks creditor protection over $700-million debt

A Vancouver development company with a massive portfolio of unfinished real estate projects is seeking creditor protection, citing more than $700 million in outstanding debt.

Coromandel Properties Ltd., which has a former longtime Vancouver city councillor among its principals, filed a petition in B.C. Supreme Court this week asking for time to sort through a maze of financial problems due to sluggish progress on 16 development projects — most of which are unfinished — and difficulty servicing its debts due to rising interest rates.

Coromandel has been acquiring land and developing multi-family residential towers and townhomes around Vancouver since 2013, but is struggling to make payments on its 16 properties — all but a few of which remain in the acquisition, planning or construction phases.

The petition lists Zhen Yu Zhong as the sole director and officer of Coromandel Properties. Former Vancouver city councillor Raymond Louie, who served five terms representing COPE and then Vision Vancouver on council until 2018, was hired in 2019 as Coromandel’s chief operating officer and his LinkedIn profile still lists him in that role.

Louie did not immediately reply to a request for comment Wednesday. The lawyers from the Vancouver firm Clark Wilson LLP, who filed the petition in B.C. Supreme Court earlier this week on behalf of Coromandel, did not reply to emails and phone messages.

Responding to a request for comment, Coromandel Properties sent an emailed statement Wednesday to Postmedia saying: “The Coromandel Group (“Coromandel”) recently submitted a petition to the Supreme Court of British Columbia for relief under the Companies’ Creditors Arrangement Act. If the court grants their request for protection, Coromandel will work towards restructuring its finances and advance its operations.”

The court filing lists 16 major projects in Coromandel’s portfolio, including many along the Cambie corridor that are in various stages of development. Only a few are already producing rental income, and several of those are envisioned as expanding into higher-density towers around the city’s transit hubs.

The petition complains that its financial difficulties stem, in part, from Vancouver’s “complex, expensive and slow” process for developing real estate. It also says it often takes years just to complete land assemblies for the larger projects and that the planning process, including rezonings and development applications, also “can take many years.”

Delays in the developments have led to difficulty securing pre-sales, says the petition.

“Due to the rise of interest rates since 2022, the petitioners have had difficulty servicing the secured debt on the projects,” it says. It lists a number of secured creditors who have called their loans in the millions of dollars and liabilities to eight secured lenders who have demanded repayment amount to about $218 million.

In all, there is $700 million in outstanding debt secured against Coromandel’s projects, the petition says.

Citing interest rates, delays at city hall and “liquidity concerns,” Coromandel has “been unable to meet their obligations as they fall due” and has “insufficient cash flow to complete development on the projects… As a result, the development work on the various properties is in jeopardy.”

The development company has 30 employees working either for Coromandel Properties Ltd. or its subsidiaries Mulberry Capital Ltd. and Baystone Properties Ltd.

Coromandel’s real-estate portfolio

Here’s a list, in alphabetical order, of the 16 properties in Coromandel’s portfolio, and the status of the projects:

Alberta 40: Six parcels to be developed into 18-storey, high-density multi-family residential towers with 349 rental units in the Cambie corridor.

Ash & Manson: Eight parcels in rezoning application process with the City of Vancouver for development into two 18-storey towers and one six-storey building for social housing, also in the Cambie corridor.

Cambie 43: Three parcels with rezoning approved to develop a 29-storey market residential tower and a 15-storey hotel tower; presales are set to launch this fall.

Cambie 45: Five parcels to be developed into a 21-storey market residential tower and an 11-storey hotel tower with office space.

Cambie 59: One parcel approved by the city to develop two six-storey condos; a revised plan could be submitted for higher density.

Coromandel Ash: Two parcels to be developed into four storeys of condos, another project that’s part of the Cambie corridor plan.

Georgia Court: An existing 25-strata unit complex in Chinatown. Coromandel started buying individual units in 2017 and to date has purchased 24 of 25 units for a total of about $25 million, the petition says. The developer had an agreement to purchase the 25th unit with a closing date in January 2023, the petition says, but has “not been able to complete the sale as they lack the financial resources to do so.” Coromandel had planned to redevelop the property into a larger strata building in the future.

Kingsway Frame: One parcel with a redevelopment application approved for a 10-storey project with 219 market strata units. Some units have been pre-sold but construction financing has been halted because of inadequate presales.

Laurel 57: Five parcels to be developed into a high-density, multi-family complex as part of the Cambie corridor plan.

Oak West 52: Construction is 60 per cent complete on 23 townhouses, 22 of which have been sold.

Pacific Burrard: Existing seven-storey commercial building historically known as the Kilborn Building. It’s currently being rented out but there are discussions about a high-density tower on the site.

Southview Gardens: A 2.7-hectare property with 140 existing townhouses and apartments that are rented out. Discussions are underway with the city to redevelop it into a residential complex of four six-storey buildings with 1,150 units.

Transit Projects: Three separate projects near rapid transit that are expected to get increased density under a revised official community plan. AC Nanaimo is nine parcels; Nanaimo 22 is 11 parcels; and Slocan 29 is six parcels. All are currently being rented.

Wilmar: A South Vancouver development where construction has stopped on a heritage-designated home that is 65 per cent rehabilitated. Five new in-fill homes on the property are 95 per cent complete.

jruttle@postmedia.com

dfumano@postmedia.com

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