Mike Wuerthele
Apple has pulled itself out of a contentious deal with the developers of Toronto's "The One" retail project, leaving the site without an anchor tenant.
Since 2016, Mizrahi Developments has been constructing what it calls a condominium, an 85-story skyscraper that includes significant shopping areas at the corner of Yonge and Bloor. Then in 2018, Apple was revealed to be involved, with plans for a 9,000-square foot store in the complex.
After threatening to leave the project in February should landmarks and conditions not be met to the company's satisfaction, Apple has made good on its promises to do so. Apple took its actions after the project fell into bankruptcy because of a massive $1.6 billion dollar debt, and construction delays, iPhone in Canada said on Friday.
"The Project recently lost its anchor retail tenant, and no replacement anchor tenant has been secured," stated the court documents filed by lender KEB Hana Bank
Reportedly, in December 2020, Mizrahi Developments told Apple that the project would be delayed to October 31, 2021. The delays were due to the coronavirus, plus a local plumbers' strike in 2019.
It was in response to this new October 2021 date that Apple said it would terminate its lease. Mizrahi Developments sought a court order to prevent Apple leaving, and claims it has not missed these deadlines.
Apple's court filing prior to Mizrahi's request was seeking almost $30,000 to compensate for a agreement made with its long-term designers Foster + Partners, and another $6.9 million in damages.
"[The One will] suffer irreparable harm from losing a world-class tenant that was intended to be an anchor tenant for a world-class property," says the developer in court documents.
Apple's lease was for over 15,000 square feet, which included in excess of 9,000 square feet for retail on the project's ground floor. As part of its deal with Apple, Mizrahi Developments agreed to pay Apple's design costs, estimated to be $6.24 million Canadian ($4.87 million US).
According to Mizrahi Developments' court filings, the developer says it was delayed waiting for Apple to choose a design for its storefront glass.
Apple's space in The One was designed to be surrounded by seven layers of glass with no breaks. The plan was to construct it from 34 custom-fabricated panels costing over $300,000 each. The architect was Foster & Partners, which has designed many previous Apple Stores.
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8 Comments
I would have expected Apple to loan them some money, but clearly that wasn't warranted in this case. They didn't trust the developers due to slowness in completing the project. Rarely do we see projects met on budget and on time. I peg that on greedy companies trying to milk the project for more than it's worth. "Hey, that door knob is $300. Thanks!"
They even stole the name from a residential developer. “The one” was pretty much the most expensive house in the world.
This is not remotely surprising. Nothing gets built on time or on budget in Toronto. Must be something in the water. COVID was a legit excuse but it was the same before and is still the same well after. Dysfunctional city hall doesn’t help.
Apple was wise. Pulling out of that deal, that money, any money given to that company would’ve disappeared immediately into nothing, in fact, if they had done their research, they never would have entered into any deal with Mizrahi development. They are as crooked as making a deal with Trump enterprises or Guess Inc….