Issues of ownership loom over Genosha
Agreement can't be reached on building's cost
Work continues to be at a standstill at the former Genosha Hotel downtown. The reasoning behind the stoppage was a disagreement between Bowood, the building’s developer, and Richard Senechal, its owner, over how much the building was worth, as the former was going to purchase it. Negotiations will continue, with the contract for incentives between the city and Bowood expiring at the end of this month.
By Joel Wittnebel/The Oshawa Express
The Genosha’s storied ownership history has yet another controversy to add to its growing saga.
The downtown project has been plagued by ownership issues for most of 2016 as the prospective buyer, Bowood Properties, and current owner Richard Senechal have been unable to come to an agreement that would transfer the ownership of the property to Bowood.
Until now, the details about the stumbling blocks have been hidden behind legalities. However, in a letter to the city and following a meeting of the city’s development services committee on April 4, the picture became clearer.
In March 2015, Bowood and Senechal’s numbered company had a letter of intent stating the former would purhcase the property. The amount in that letter was not revealed.
Following council’s passage of more than $1.5 million in grants and incentives to assist the project in July, money was put forward for Bowood in order for work to get started right away.
However, the city’s grants, along with those that would follow from the Region of Durham, were all contingent on the fact that Bowood would retain ownership of the property.
As previously reported by The Oshawa Express, the original deadline for that retainer was December, which has since been extended twice to April 30.
“It’s at a stalemate right now,” Tracey Christie, the CEO of Bowood, says.
According to a letter from Senechal to the city, when the final purchase and sale agreement from Bowood came forward in February, the number was considerably less than what was stated in the original letter of intent.
According to Snechal’s letter, the matter only deteriorated from there, Bowood turned down an offer to become an investor in the property along with Senechal and 70 King Oshawa Inc, another company involved in funding the project, because Bowood lacked available funds.
From there, the offer was given for Bowood to purchase the property outright for the original agreed cost, including the cost of the work to date; approximately $1.3 million, paid for by 70 King Oshawa Inc. It was a price that Bowood couldn’t meet, the letter says.
“During that period where all the work has been done, that all the residents of Oshawa see and have commented so positively on, have been advanced funds from myself and my group to do that, in anticipation of a purchase and sale agreement conclusion,” Senechal says.
“It’s very disheartening and saddening that it’s come to this,” Christie says, “but that’s business.”
If the two parties cannot come to an agreement by the end of the month, Bowood will be forced to drop out of the project, something that Christie says he doesn’t want to see happen.
“I’d like to see it to completion,” he says.
Plan B
However, it seems Senechal has a backup plan.
In the same letter to the city, he requested that the financial incentives approved by council and the region be transferred from Bowood to 70 King Oshawa Inc.
The company also developed and owns the buildings at 11 Simcoe St. N., leased to UOIT and the La Quinta hotel.
However, that request was denied unanimously by the committee, who not only explained that it’s impossible for the regional incentives to be transferred (an entire new application would have to be filed), councillors have not seen any plan from 70 King Oshawa.
“We have no idea what their plan for the place is,” Councillor Bob Chapman said. “Are they going to do exactly what Bowood was doing, or are they going to change their plan?”
For that reason, Chapman said it would be better, if need be, to start the process over. If the contract between the city and Bowood becomes null and void at the end of April, a new application could be filed by 70 King Oshawa and the redevelopment could continue.
“If all the boxes are checked I can’t see any reason why committee and council wouldn’t approve it,” Chapman said. “Chances are the same thing will happen. It will just delay the project a bit, unfortunately.”
Despite that, both Senechal and Christie have said they are committed to coming to an agreement, though it will require some work.
If that fails, Senechal says there is no one more dedicated to seeing the project completed than himself.
“I’ve put a lot of energy over the years and I’ve put a lot of dollars and I’m the primary person who has done that, so I’ve demonstrated that commitment through all my actions over this time.”
The item will be back on council’s April 11 agenda and Councillor John Aker was sure to point out that if an agreement were reached later in the month, a special meeting would be called to address it.