The development of 72 townhomes on Gorham Street faces more uncertainty after the developer had its licence suspended amidst receivership proceedings.
The Home Construction Regulatory Authority proposed to suspend the licence of Stateview Homes as the company enters a receivership situation. Although the developer has previously said it still intends to go ahead with the development in Newmarket, the suspension means it can no longer build homes for the time being.
The HCRA said with the company in financial turmoil and mired in an alleged $37 million cheque-kiting fraud scheme, it doubts the company’s ability to operate properly.
“The HCRA does not believe Stateview Homes can reasonably be expected to be financially responsible in the conduct of businesses, nor can these licensees be expected to carry on business in accordance with the law and with integrity and honesty,” the June 19 HCRA order said. “As a result, the HCRA seeks to suspend the Stateview Homes’ licenses while the receivership process unfolds.”
Stateview has previously blamed the alleged fraud matter on a financial officer and denied threat of bankruptcy. It has also said it intends to go ahead with the Newmarket development, and it will be unaffected, even as other lands from the company are sold off through receivership.
But HCRA said the receivership entities have entered 689 contracts to sell new homes, collecting $69.5 million in deposits and have allegedly spent all these dollars without providing any contracted homes. On June 5, the court approved a sales process for some lands associated with the receivership entity’s projects.
The HCRA said the court has ordered that prospective purchasers will not have to honour Stateview’s previous agreements with purchasers.
NewmarketToday did not receive a reply to a request for comment from Stateview Homes before publication deadline. The allegations against Stateview have not been proven in a court of law.
The Stateview Homes proposal on Gorham Street and Muriel Street had not yet received municipal approval, but the town deemed the application complete in 2022. A public meeting was scheduled to occur sometime in 2023.
The town planning department said it is waiting for a resubmitted application to address some agency and department comments received through the first application submission. It said the developer has not provided any updates on the project to the town.
The Stateview Homes website links to a 404 error page as of July 13. It had previously said that the homes proposed for Newmarket, known as the Elia Collection, had been fully reserved.
Other projects of Stateview Homes are also impacted. A housing development in Barrie that was further along has halted construction with the receivership proceedings.
Residents have expressed concern with the project. Doug Mossop said it would not really fit in well with the community, and there are space concerns with the number of units.
“We’re not against housing. We know we need housing, but when people are buying million-dollar townhomes and condos, that doesn’t fit. People can’t even afford that,” he said.
Regardless of whatever comes on the property now, Mossop said he hopes any future development properly considers the neighbourhood.
“That’s my concern. They really look at it from an environment standpoint and a community fit,” Mossop said.
-With files from Bob Bruton
