Lot that was supposed to be home to SkyCity, Winnipeg's tallest tower, now up for sale

All that remains of the dream of Winnipeg's tallest tower is a weathered billboard on a surface parking lot and hundreds of investors who doubt they will get their money back. 

The troubled $200-million, 45-storey SkyCity project was supposed to be built by 2019 but it never broke ground. 

FAAN Mortgage Administrators, the trustee for SkyCity investors, recently announced the parking lot at at the corner of Graham Avenue and Smith Street is up for sale, with no list price and a deadline for offers of Oct. 15.

The City of Winnipeg assesses the value of property at just over $4.6 million.

Sales for SkyCity, a mixed-use condo project originally announced in 2013, looked good back in 2015, when Richmond Hill, Ont.-based developer Fortress Real Developments said it had sold more than 50 per cent of the units.

But construction was delayed and problems for the company began to mount. 

In 2018, the developer made headlines  when Ontario's mortgage regulator, the Financial Services Commission of Ontario, issued $1.1 million in fines to four brokerages involved in syndicated mortgage investments on Fortress real estate projects.

A couple of months later, the RCMP raided six properties, including Fortress's headquarters in the Greater Toronto Area, as part of an ongoing investigation into syndicated mortgage fraud. No charges have been laid in that investigation. 

'It's my pension'

Condo purchasers' deposits were refunded shortly after the RCMP raid, but they were not the only ones who had money on the line with Fortress. 

According to a Sept. 23, 2020, letter sent from FAAN to lenders, in addition to pre-selling units, Fortress borrowed $32 million for SkyCity from investors through syndicated mortgages  — a pooled investment to pay for marketing and pre-construction costs. Those investors, who are primarily based in Ontario and Eastern Canada, have now been told it's unknown whether they will get any of their investment back.

Carole Skelhorne of Halifax invested $104,000 of her pension into a SkyCity syndicated mortgage. For the first couple of years she was happy, getting 12 per cent interest — and then the payments abruptly stopped.  

"It's heartbreaking. It's my pension," the 52-year-old said. "I've been working a second job to help to try to make [it] up. But I will never be able to make up $104,000 with a part-time job."

She considers herself luckier than some others, who invested insurance settlements that they depend on for income. 

"It never even broke ground," said Skelhorne. "It's very, very frustrating."

In its Sept. 23 letter, the trustee says after refunding all the unit deposits to the condo purchasers, Fortress went back to the drawing board because the original design "had proven to be too tall and with too much commercial space." No revised design plan was made public. 

The trustee has warned syndicated mortgage investors that it is unknown whether they will recover any of the money they invested. 

In addition to the $32 million in syndicated mortgages, there is $9.5 million in priority mortgages, which take precedence for repayment from funds obtained through the sale of the parking lot. The trustee says these mortgages have substantial accrued and unpaid interest and are currently in default.

Angela Mathieson, president of the downtown development agency CentreVenture, says she is happy to see the property on the market.

"It's a prime site, right on the rapid transit mall, surrounded by a number of new developments. We are very optimistic that a purchaser [will] come forward with a redevelopment plan," she wrote in an email.

Fortress did not respond to a request for comment.