A Toronto builder is undergoing financial restructuring in an attempt to avoid bankruptcy, resulting in construction delays and raising questions about the future of its affordable housing developments.
Assembly Corp. filed a Notice of Intention (NOI) to Make a Proposal under the Bankruptcy Act in May, a process in which the company must develop a plan to pay off debts. The court documents say one lender is owed about $5 million and others are owed about $12.7 million.
It’s the latest builder to experience struggles as the new home industry is hit with low sales and prices, and a standstill on construction in the Toronto region, which has in turn impacted suppliers. Since 2024, there have been several condo projects cancelled or put into receivership, another step in the bankruptcy process.
Assembly’s problems impact vulnerable people because it builds affordable housing.
Business advisory and restructuring firm GlassRatner has been appointed as proposal trustee and interim receiver.
According to court documents, Assembly is working on seven different projects, most of which are being built for public or non-profit organizations in Toronto.
Mark Richardson, technical lead for housing advocacy group HousingNowTO, worries that the projects will not be done by the winter, when they will be especially needed by vulnerable people.
“It may be super hot out there today, but we are probably only five months away from the first snowfall,” he said.
The chief operating officer of Assembly Corp., Kathy Hogeveen, referred questions to the trustee GlassRatner.
Allan Nackan, a senior managing director at GlassRatner, said the company is unable to provide more information beyond what is publicly available on its website.
According to the court documents, Assembly uses a “configure-to-order” system with design elements that can be made offsite and then put together quickly.
The projects include: an eight-storey building on 215 Wellesley St. East for Elizabeth Fry Toronto that is 98 per cent complete and in a “critical closeout phase”; and a 24-bed healing lodge for the Thunder Woman Healing Lodge Society at 2217 Kingston Rd. that is 85 per cent complete.
Assembly is also working on a six-storey mass timber affordable housing project at 7 Vanauley St. for the YMCA of Greater Toronto that is 95 per cent complete; and an eight-storey 50-unit affordable housing project for seniors at 60 Bowden St., near Danforth Ave. and Broadview Ave., for WoodGreen Community Housing that is supposed to integrate a new mass timber structure into a heritage church.
The company is doing renovations and an extension on an existing home at 28 Algoma St. for the Thunder Woman Healing Lodge Society, and its portfolio includes a project in Halton, and another one in Constance Lake First Nation.
On its website, WoodGreen announced that construction at 60 Bowden St. has been paused. A spokesperson there referred questions to the city of Toronto.
Hugh Clark, executive director of the Housing Development Office for the city, said his department is aware of the situation.
“To the best of the city’s knowledge, construction activities at sites involving Assembly remain largely paused while the insolvency proceedings are ongoing,” he said.
“The City continues to work closely with the non-profits to facilitate the resumption of construction as soon as practicable,” he added.
Alex Versluis, senior vice-president, property and development management at the YMCA of Greater Toronto, said the situation has delayed the opening of their project.
“We are keen to open ‘mYplace’ which will provide 31 units of transitional housing for 2SLGBTQIA+ youth who are homeless or at risk of homelessness as soon as outstanding issues are resolved and the project can move forward.”
Thunder Woman Healing Lodge and Elizabeth Fry Toronto did not respond to a request for comment.
Assembly has been “pioneering modern methods of construction,” the court documents note, including mass timber cross-laminated timber (CLT panels) and prefabricated wall systems.
In order to get funding from the Canada Mortgage and Housing Corporation (CMHC), the company had to meet its requirements for fixed price contracts which “resulted in serious financial complication for Assembly,” the documents note.
“Further, the real estate industry generally is experiencing a significant decline in the GTHA. This downturn is affecting suppliers and leading to financial stress,” the documents continue.
There have been “disruptions” on the projects that have forced the company to find new suppliers at premium rates.
Supply chain bankruptcies have contributed to costs and schedule delays has forced it to “absorb costs of supplier failures, impacting Assembly’s cash position.”
Housing advocate Richardson noted that mass timber and other “innovative modern methods of construction” are “incentivized” for CMHC funding.
“But you know there’s only a finite number of firms that can do that,” Richardson said.
“And the other challenge is that all of these projects are very physically different than one another,” he added.
The timeline to file the proposal in the NOI proceedings has been extended until mid-July, according to the court documents.
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