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.
The One under construction in Toronto (Source: Eduardo Lima, The Globe and Mail
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.