Around nine months after filing for creditor protection, Mizrahi Development Group is now looking to renegotiate presale contracts with respect to its luxury condo development at 1451 Wellington Street West in Ottawa, also known The Residences at Island Park Drive.
The 12-storey, 93-unit development coming up in Westboro, owned by WellingtonCo, was started back in 2015 and is now in the final stages of construction with just interior finishing and cladding and roofing work still to be done. To date, all the necessary permits and approvals for the project have been secured except the occupancy permit and condominium registration.
The project’s original competition date was November 2023, but suffered major delays attributed to “cost overruns due to construction challenges, the COVID-19 pandemic, market conditions, and increased costs for goods and services,” according to a July 9 report from the Monitor in the CCAA proceedings, MNP Ltd. Phased occupancy is now expected to commence in September 2025 and completion is projected for February 2026.
The Monitor also notes that WellingtonCo has presold approximately 72 units — representing just over a 77% of the 93 units — since 2017, and that deposits related to those presales amount to around $14.8 million. That sum is insured by Westmount Guarantee Services Inc.
Renderings of 1451 Wellington/Mizrahi Developments Group
A majority of the presale agreements were reached in 2017 and 2018, however, and new condominium prices in Ottawa-Gatineau have “increased significantly,” the Monitor notes. Thus, Mizrahi Developments, with support from the Monitor and the Mizrahi’s realtors on the project (PMA Brethour Realty Group), is now seeking to renegotiate the terms of the existing presale agreements so they reflect current market conditions and “to determine whether incremental value can be realized for the benefit of stakeholders.”
In a July 14 sworn affidavit, one of the presale purchasers expressed concerns regarding the termination and disclamation process, saying that he entered into a sales agreement in March 2017 for $1,156,990, paid deposits in the amount of $231,4000, paid $59,109 for upgrades, and that he’s since relayed to Sam Mizrahi that he is not in a position to pay the new updated price.
According to the affidavit, Mizrahi told the buyer in May 2025 that the cost to construct the building was approximately $1,200 per sq. ft. If the updated price is close to that, it would represent an increase of 50% to 60% on the original price, the buyer said, adding that he was concerned about “how much risk the deposit and interest would be exposed to” and “the timeframe for the return of the deposit.”
Nonetheless, the Monitor and Mizrahi received court approval to proceed with their plan on July 15.
Since the project was placed under creditor protection on October 15, the court has granted three stay extensions that have allowed the company to restructure, consult with stakeholders — including unit purchasers — and pay trades, subtrades, and suppliers. Most recently, the court extended the stay to September 30.
STOREYS reached out to Sam Mizrahi of Mizrahi Developments for comment when the CCAA proceedings commenced in October 2024, at which time he said that his company is “committed to ensuring all its projects and developments consistently exceed customer expectations without compromising standards and quality.”
In addition, Mizrahi underscored that many of his projects “have been successfully completed and registered to date with no claims of warranty or otherwise.” He cited 133 Hazelton, 181 Davenport, 128 Hazelton, and the Lytton Park Townhomes, as well as the company’s portfolio of single-family residential projects.
It’s unclear if amended sales agreements have been provided to purchasers of 1451 Wellington at this time. Sam Mizrahi has been contacted for clarification by STOREYS.