The sprawling redevelopment of the old Barrie fairgrounds has been placed under receivership, jeopardizing the future of the historic site in one of the latest instances of a real estate development facing financial difficulties.
The project was set for 175-199 Essa Road and 50 Wood Street, located along Highway 400, which together span about 55 acres. The Essa Road properties were the home of the Barrie Fair since 1961, according to a planning document, while the Wood Street property has been used for industrial purposes since the 1950s.
According to court documents, Digram Developments — through Green World Construction Inc. — acquired 50 Wood Street on April 14, 2022, from 2106580 Ontario Inc. — a wholly-owned subsidiary of Osmington Inc., also known as Osmington Capital Partners. The transaction was financed via a vendor take-back mortgage provided by the vendor to the purchaser, for the principal amount of $48,025,000.
175-199 Essa Road and 50 Wood Street and its surrounding context. / Innovative Planning Solutions
For the site, the developer has proposed nine high-rise towers up to 40 storeys with a total of 2,948 residential units and a collection of four-storey buildings with between 237 and 286 townhouse units, along with commercial space and a school, according to the City of Barrie’s webpage for the application. Court documents, however, state that a total of 4,054 units are planned.
The project has been in the works since at least April 2020, originally by Osmington, which had submitted various amendment applications to the City.
After the property was sold in 2022, revisions were made and a public meeting was held in April 2023. Shortly afterwards, the developer sought out a Community Infrastructure and Housing Accelerator (CIHA) order to expedite the project. After the CIHA tool was eliminated by the Province, the developer then sought out a similar Ministerial Zoning Order. However, the application has since been referred back to the City.
The Receivership
The first-ranking vendor take-back mortgage was registered in favour of 2106580 Ontario Inc. (90% interest) and Osmington (Wood Street) Inc. (10% interest) and was later amended several times. According to the lenders, there were several instances where Green World Construction Inc. failed to make principal payments when they became due, defaulting on their loan agreement.
The lenders say they provided multiple opportunities for the developer to remedy the situation, but ultimately issued a formal demand for payment on April 17, 2024.
The following month, the lenders agreed to give the developer one month to seek out alternative financing. After the developer failed to do so, they initiated receivership proceedings, which was scheduled to be heard on July 22, 2024. However, just before the hearing, the two sides agreed to revise payment terms.
A rendering of the project planned for 175-199 Essa Road and 50 Wood Street in Barrie. / KIRKOR Architects and Planners
The lenders say the developer was then able to make most, but not all, of its required weekly payments until February 28, 2025, since which it has again defaulted. The lenders issued a formal demand for payment on April 4 before then filing their receivership application, which was ultimately granted by the Ontario Superior Court of Justice on May 20. According to the lenders, they were owed approximately $31.7 million as of April 4.
Court documents also state that Waterloo-based real estate lender MarshallZehr holds a mortgage registered against the property in the principal amount of $13,300,000, that the developer also has tax arrears owed to the City of Barrie, and that MarshallZehr has been directing interest payments it received from the developer to the City.
With the project under receivership, the fate of the project is now murky, but it will now likely go through a court-ordered sales process so a new developer can be found, since construction has yet to commence.
STOREYS reached out to Digram Developments on May 27, but has not received a response.