This is the first of a two-part series on the Collier Centre.
Hope is on the horizon for the Collier Centre property in Barrie’s downtown.
According to an open letter written by David Morrison, president of Morrison Financial, released on Dec. 27, as the first mortgagee on the Collier Centre he’s now taken the property back and is planning to put the retail portion on the market within the next few weeks.
“It’s in such a great location. I don’t think there’s a better location in Barrie,” he said in an interview with BarrieToday. “City hall, the courthouse, the downtown is all right there, and it’s good space.
“There’s no question about it.”
The Collier Centre is designed for over 70,000 square feet of retail/commercial space and of that, approximately 40,000 sq. ft. was originally planned for a grocer.
None of that panned out over the three years that Fortress Real Developments owned the property after taking it over from Mady Developments in 2015.
“Recently, as a result of Fortress’ continuing default of our first mortgage, Morrison Financial took control of the Collier Centre project as mortgagee-in-possession,” Morrison wrote in his letter.
“With no tenants other than BMO Financial Group and a Druxy’s franchise, this ghost building has constituted a blight on the city of Barrie’s downtown core.”
Since the letter was released on Dec. 27, the Druxy’s franchise closed its doors, leaving BMO as the only commercial tenant.
Morrison Financial, based in Toronto, invested in the Collier Centre property as the sole first lender when Fortress took over the property from Mady Developments in 2015.
“We took the project over from Mady. They owed the bank a lot of money,” said Morrison. “We paid over the bank position, but not 100 per cent. There was a big discount where the bank lost money on that. We took that first position which enabled us to take over the building.”
Morrison says part of the deal was that Morrison Financial would pay to finish off the residential units in the Collier Centre.
“There were a whole bunch of buyers for the residential building, but it was incomplete,” he said.
“We put up the money to finish off their units. We finished them off and they’re living there now,” said Morrison, adding residents finally moved in about a year ago. All 82 residential units are occupied.
“While we were doing that, Fortress completed the office tower and the base building. They were supposed to lease up the (office and commercial) space during that time,” said Morrison.
“They were unable to do so, I think, because of reputation problems related to Fortress and their business model.”
According to a recent Globe & Mail investigation, Fortress Real Developments has been accused of operating under a controversial business model and is the target of a current RCMP investigation.
On Dec. 4, FFM Capital, a mortgage broker affiliate of Fortress, filed for bankruptcy. Two other brokerages affiliated with Fortress – FDS Broker Services and FMP Mortgage Investments – closed earlier in 2018.
“I think they were also looking for too much money (for rent),” said Morrison. “They weren’t able to finance tenant improvements. If you want to get tenants in, you have to finish the space for them. They didn’t have the money to do that.”
After a couple of years, Morrison says that while his company was receiving interest payments from Fortress, they were still unable to get tenants into the retail and commercial spaces.
“Until they defaulted, we allowed them time,” said Morrison. “Even after they defaulted they said they had a buyer, so we allowed them more time but eventually, nothing came through, so we’ve now taken control.”
In the open letter penned by Morrison and addressed to the residents of Barrie, Morrison says his company has assembled a local team of realtors, including Wayne Hay, to get the property on the market and sold.
While Hay acknowledges that Fortress also tried to sell the retail portion of the property, he says the amount of money they were looking for wasn’t realistic, which may have led to it staying vacant for so long.
“When Fortress had it on the market before, it was for a large number that really wasn’t attainable,” he said.
Lawyer for Fortress Real Developments Scott Fenton did not return a request for comment by publication time.
While the experience of working with uncertainty might sour others from dealing with developers, Morrison says he has no regrets about the investment he’s made and still believes in the Collier Centre's potential.
“It could end up being a great development, it just had the wrong ownership,” said Morrison. “It requires someone with means, capability and credibility.
“The reason I wrote the letter is I want people to know that this is a new era for this building and that baggage from the past should be forgotten. It’s over,” he added. “The long and wayward saga of this landmark property is going to have a happy ending.”
While the ending of the story for Morrison Financial and the Collier Centre building may be one of hope and potential prosperity, there are others who invested in Fortress properties who may not have been so lucky.
Visit BarrieToday tomorrow for Part 2 of this series, which will explore stories of two local investors who put their trust in Fortress and their mortgage affiliates with their savings but are now left with uncertainty.
