Apple bails out of troubled Toronto retail construction project

AppleInsiderAppleInsider
Posted:
in AAPL Investors edited October 2023

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
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.

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Comments

  • Reply 1 of 8
    coolfactorcoolfactor Posts: 2,323member
    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!"
    watto_cobra
  • Reply 2 of 8
    JapheyJaphey Posts: 1,772member
    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!"
    Why, exactly? They are years behind schedule, $1.6b in debt, and bankrupt. How confident would you be loaning them your money? They’ll just choose a new location and probably still open before The One. 
    edited October 2023 watto_cobraAnilu_777
  • Reply 3 of 8
    9secondkox29secondkox2 Posts: 3,026member
    They even stole the name from a residential developer. “The one” was pretty much the most expensive house in the world. 

    These folks sound like a nightmare. 

    Originally supposed to be in 2020 then the pandemic delayed to 2021. Now it’s two years later? 

    They want to blame apple for the whole delay, simply because they were waiting on apple’s fancy windows? 

    Come on dude. The entire building could have been built and a glass facade added at the end. It wasn’t foundational or structural. 

    These folks clearly can’t manage a project, never mind their company. Sad sad story. 
    edited October 2023 watto_cobraronnAnilu_777byronl
  • Reply 4 of 8
    GoLeafsGoLeafs Posts: 2member
    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.
    byronl
  • Reply 5 of 8
    danoxdanox Posts: 3,283member
    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….
    edited October 2023 Anilu_777ronnbyronl
  • Reply 6 of 8
    Anilu_777Anilu_777 Posts: 570member
    They even stole the name from a residential developer. “The one” was pretty much the most expensive house in the world. 

    These folks sound like a nightmare. 

    Originally supposed to be in 2020 then the pandemic delayed to 2021. Now it’s two years later? 

    They want to blame apple for the whole delay, simply because they were waiting on apple’s fancy windows? 

    Come on dude. The entire building could have been built and a glass facade added at the end. It wasn’t foundational or structural. 

    These folks clearly can’t manage a project, never mind their company. Sad sad story. 
    According to the Globe and Mail, they still haven’t built above the 40th floor and all creditors want their money. The South Korean lender wouldn’t give any more this time. The project is a mess and Apple was right to pull out.  https://globe2go.pressreader.com/article/281509345859763
    edited October 2023 Japhey9secondkox2Bart Y
  • Reply 7 of 8
    eriamjheriamjh Posts: 1,730member
    They can anchor it with a Microsoft store.  
    Bart Y
  • Reply 8 of 8
    22july201322july2013 Posts: 3,695member
    9secondkox2 said:
    They even stole the name from a residential developer. “The one” was pretty much the most expensive house in the world. 
    I'm not sure how it's "stealing" since titles/names can't be copyrighted. Titles can be trademarked, but something as simple as "The One" likely can't be trademarked, primarily because it's very likely a common title already, as your post suggests. The term "Apple Computer" can be trademarked, while the term "Personal Computer" probably cannot, for the same reason that "The One" probably cannot, for an address. Not long ago there was a movie called "Waiting for Superman" which you might think could be sued for using the word "Superman" (which is trademarked) but since the movie wasn't about superheros, they were able to use the word "Superman" in the title.
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