Condo project failed when construction costs raced ahead of contracted selling prices
Derrick Penner
Sun
Two principals in the financially troubled Riverbend condominium project in Coquitlam are also heading the company building a luxury waterfront resort in Ucluelet.
Grayden Hayward, who was director and president of Riverbend’s builder, CB Development (2000) Ltd., and his son-in-law Craig Lochhead, a CB Development director, are also directors of Island West Development (2006) Ltd., according to documents filed with the British Columbia corporate registry.
Island West, in 2006, obtained a development permit to redevelop an old campground, pub, hotel and marina into a 94-unit condominium resort, with an additional 14 units of non-market housing for the community.
CB Development was forced into receivership when its main mortgage lender on the third phase of Coquitlam’s Riverbend project, CareVest Capital Inc. foreclosed on the project.
Hayward said the result of that action won’t affect the Island West project because they are two different companies.
“Our major shareholder [in the Island West project] is entirely different,” Hayward said. “And the investors, equity investors, are entirely different and really no relationship to [the Riverbend project].”
Hayward added that while other media reports have tried to link the Island West and Riverbend projects, there is no connection.
The Riverbend project failed when construction costs raced ahead of the prices CB Development had agreed to sell units for in pre-sale contracts signed with 32 pre-sale buyers over 2005 and 2006.
In March, CareVest said it wouldn’t advance the money needed to complete the Riverbend project or release its loan unless the units were resold at current market prices, and CB Development cancelled its sales contracts.
A receiver’s report indicated that $3.8 million would be needed to complete the project and that CareVest would still lose between $2.6 million and $5 million, depending on which prices units sold for.
Hayward and Lochhead do own an interest in the Island West project, and Hayward said earlier reports raised the question why he and Lochhead couldn’t pull money out of the Ucluelet development to pour into the Coquitlam development.
“If we had a couple million bucks invested, we could try to sell our share and bring it out,” Hayward said, “But that’s not the case.”
© The Vancouver Sun 2007