It’s decrepit, mouldy, and has been home to more than a few critters.
But it’s symbolic of the strength of the housing market in Canada’s largest city, even as rising interest rates, higher debt levels and increased government intervention marked an uncertain year for the real estate industry. The new owners paid a cool $3.45 million for a shell of a house in a home outside Toronto’s downtown core.
The 12,900-square-foot two-storey mansion in the Scarborough Bluffs neighbourhood had been abandoned for a decade, as reported by the Star. It has 13 rooms and seven washrooms. There is a separate garage that could potentially hold up to 16 cars, and sits on a plot of land with some historical significance. But it has never been lived in.
The partially constructed home needs millions of dollars in work to be completed. Inside there is water damage and animals have been through the building over the years. Would be purchasers were advised by some agents to wear masks before entering.
It was sold under receivership in June. But the sale was initially held up after lenders who held mortgages on the home intervened, saying the sale price was too low. The home was originally listed at $3.8 million.
The estate, originally registered to Christine Drotos, was seized by creditors after a bankruptcy. The property was originally purchased for $1.95 million in 2006. In an earlier listing in April of 2009, the asking price was $5.5 million.
“That is really a bargain price,” said Royal LePage agent Normand Gautreau. “It’s hard to find a property that big overlooking Lake Ontario. It’s a massive piece of property and the views are spectacular. Gautreau estimates that the original owners put up-to $1.5 million to build the existing steel beamed shell structure before construction stopped.
“It’s built like a giant Shoppers Drug Mart. It’s a big square thing that’s really quite sturdy,” said Gautreau. “The last owners really put some money into this.”
Land registry documents first indicated that the new buyer was Frederic Kielburger. That’s also the name of famed Toronto child rights activists Craig and Marc Kielburger’s father. The duo are the founders of WE Day. But Fred Kielburger’s wife, Theresa, told the Star in an email exchange that they were not the owners of the home and Fred Kielburger’s name was on the registry “in error.”
She said the home had however been purchased by a relative and that her husband “helps him where we can with lots of support … he fixes up old houses, rents others.”
After being notified by the Star, Kielburger notified the registrar of the error and the property was transferred in November to a numbered company. The sole director of the company is James Paul Altilia.
Altilia, a nephew of the Kielburgers, said in an email exchange with the Star that “I do real estate on the side, and I haven’t decided on anything regarding 4 Birchmount.”
Documents show that before the sale, there were three loans on the property, ranging from $2,534,582.27, to $1,164,755.78 to $6.7 million for a total of $9.23 million. That’s far more than it eventually sold for, and the subject of contention in an ongoing and controversial court battle between several parties, including the mortgagees.
“It’s a beautiful property, although the house isn’t in great shape,” said Brahm Rosen, president of Rosen Goldberg Inc. and official receiver for the estate. “It had a lot of notoriety over the years, but now someone will take care of it.”
An appraiser hired by the receiver had estimated the value at $3.2 million. The sale was eventually approved by Court of Appeal Judge David Paciocco who ruled that: “The Receiver made efforts to obtain the best price and achieved the offer to purchase after considering the interests of all parties.”
While the home has finally been sold to new owners, mortgagees were left fighting in court over the proceeds, says Rosen. “The outstanding issue that hadn’t been resolved after the sale is who gets what from the sale of the home. This had nothing to do with the new owners, but the former financing arrangements,” said the receiver.
The first home on the property, which was torn down, had some historic value. It was the former summer home of a prominent Toronto family who were proponents of public transit and electricity in the city. Henry Redman was the Town of Scarborough’s first solicitor and his house was the first to have electricity in the neighbourhood.
The size of the lot is huge by any standard at 135 feet frontage by 548 feet. A home with 50-feet of frontage sold four doors down in the same month for $1.239 million. Still, erosion over the years has whittled away some of the property. Gautreau says many years ago he would walk by the property and peer over the sides to see the dozens of wrecked cars, including Model T’s, pushed over the cliff to help staunch the erosion.
The realtor says earlier this year he brought clients through the home who wanted to purchase the land and build townhomes. But the lots could not be subdivided under current zoning.
He says if the existing steel structure is kept, the building would need about $2 million of work to be completed. That would mean the home would cost a total of $5.45 million to complete including the purchase price. But he said it would be worth at least $8 million to $10 million in finished form.
“It needs a lot of work. And it’s certainly a bit of a risk,” Gautreau said. “You need to have deep pockets but whoever bought it will see a lot of upside. I think they got a deal.”
Tony Wong is the Star’s television critic based in Toronto. Follow him on Twitter: @tonydwong