The development firm has faced a cash crunch in recent years because of the combined effects of the COVID-19 pandemic, the increased price of materials, high borrowing costs and a downturn in the market for commercial leased space.
Court and property records show Ashcroft Homes faces financial challenges that go beyond its Eastboro development, leaving many local contractors unpaid.
Earlier this week, it was revealed that the development firm, founded by engineer-turned-entrepreneur David Choo, had lost control of its 200-acre Eastboro development, which had been sent into receivership.
While Eastboro was plagued by unique construction challenges, the parent company has faced a cash crunch in recent years because of the combined effects of the COVID-19 pandemic, the increased price of materials, high borrowing costs and a downturn in the market for commercial leased space.
In June, Ashcroft defaulted on a $6.5-million loan, which resulted in three Richmond Road condominium properties going into receivership.
Now, the Ottawa Citizen has learned that a fourth property, 114 Richmond Rd., owned by a subsidiary of Ashcroft Homes, was also sent into receivership earlier in October due to a loan default.
The Royal Bank of Canada applied for the receivership order because an Ashcroft subsidiary failed to make $511,000 in interest payments on a $7-million loan connected to the property, according to material filed by RBC. The property is home to a 19th century convent that was the subject of a years-long debate about its proposed redevelopment.
The recent financial turbulence at Ashcroft has also left a number of unpaid contractors in its wake.
Ten local firms have this year registered $6.5 million in construction liens against Ashcroft Development Inc., another Ashcroft subsidiary, in connection with two seniors’ residences, The Astoria and The Astoria II, at 150 Central Park Dr.
Evening Update
Liens are a type of legal claim for goods and services that have gone unpaid. When a property is sold, some or all of the money is used to pay the lien.
An electric contracting company, Lecompte Electric Inc., registered a $2.5-million lien against Ashcroft; Serco Construction, a drywalling firm, registered a $1.6-million lien; and Coffrages Synergy, a concrete formwork company, registered a $1.1-million lien.
Other firms with liens include Stephenson’s Rental Services ($237,216), YSB Hoist Inc. ($151,323), Sunbelt Rentals of Canada ($135,612), M. Davis Landscape and Design ($136,854), Canada Paving and Construction Ltd. ($152,160) and Ontario Iron Works Ltd. ($123,868).
Some frustrated contractors have even protested outside Choo’s Clemow Avenue home in an attempt to have their bills paid.
Ashcroft chief financial officer Manny Difilippo said Friday the liens for the Astoria project had been resolved.
“We are unfortunately in a tight liquidity position, and we continue to work with lenders and all trades so that trades are paid for the work that has been completed,” Difilippo said, adding: “It is an ongoing process, which will take time to resolve.”
Other firms have registered liens against the Eastboro development, which means they’re likely to be paid only some fraction of what they’re owed.
Taggart Construction has a $2.75-million construction lien and a related lawsuit against Ashcroft Homes-Eastboro Inc. to recover the outstanding cost of sewer and road work it did to advance the Eastboro development. That work was completed on May 30.
The lawsuit, launched earlier in October, also names Ashcroft Homes and the City of Ottawa as defendants.
Bolton Electric has launched a $202,000 lawsuit against Ashcroft Homes-Eastboro Inc. in an effort to obtain payment for materials and electrical installation services at the same development. The lawsuit also names Ashcroft Homes, Ashcroft Construction and Choo as defendants.
In August, Iron Horse Corporation, an Ottawa security firm, launched a lawsuit against Ashcroft Homes and Ashcroft Construction in an effort to recover $190,000 for its unpaid bills. The statement of claim in the case contends Iron Horse provided security services at Ashcroft’s Astoria building and at its Navan Road construction site.
“Despite numerous attempts to recuperate the debt owed by Ashcroft, none of the invoices provided to the defendant have been paid,” the lawsuit alleges.
Ashcroft has yet to file a statement of defence in the case.
Jeff Arsenault, owner of Black Anvil Iron Works, says he has placed a $60,000 lien on another Ashcroft development, CitiPlace, on Colonnade Road. His firm performed structural steel work on the project, but has not been paid.
“It makes it really hard when people don’t pay their bills on time,” Arsenault said in an interview. “Business hasn’t been great this year, and you really count on the revenue you have out there to carry you through slow periods like this.”
Our website is your destination for up-to-the-minute news, so make sure to bookmark our homepage and sign up for our newsletters so we can keep you informed.
