Developer Sam Mizrahi was officially taken off The One on Wednesday, as new construction manager SKYGRiD took over the embattled project.
In the weeks since, according to the receiver, construction has continued "as scheduled," noting there has been "no material disruption among the trades, suppliers or project employees." "While it’s early to speak to specific details, SKYGRiD is working collaboratively with all parties involved to ensure a smooth transition of The One’s construction management into its care," SKYGRID said in a statement to STOREYS. "Once complete, The One will be a significant addition to the fabric of Toronto and SKYGRiD is happy to be moving development forward and seeing it through to completion.
A report released by Alvarez & Marsal on Monday confirmed that SKYGRiD was chosen, in part, because their costs were lower than current construction manager Mizrahi Inc., describing Mizrahi Inc.'s fees as "above comparable market rates." SKYGRiD's construction management fee came in at 3.2%, compared to Mizrahi Inc.'s 5%, which equates to roughly $200,000 per month in savings.
In their report, however, Alvarez & Marsal say that "the amounts paid to were not in accordance with the agreement, or any other agreement between and the Debtors." As such, they "determined that continued payment of all costs included in the General Contractor invoices was not commercially reasonable." Mizrahi and the receiver engaged in negotiations, but were unable to reach a mutually acceptable arrangement.
"Those contracts required that receive payment based on the progress of the Project against an agreed-upon budget," the report reads. "Based on the Receiver’s review, did not produce a reliable Budget or Schedule."roughly $4M in commissions that were collected on condo sales from purchasers who defaulted on their purchase agreements "by paying no deposit or failing to pay the full deposit required.