A BC Supreme Court judge approved what she called an "unusual process" on October 11 to sell The Shops at the Village on False Creek.
Justice Shelley Fitzpatrick agreed with the proposal by receiver EY (formerly Ernst & Young) for a $45.1 million stalking horse offer [an offer that sets a minimum price for a distressed asset] by First Capital Realty (TSX:FCR). First Capital could become the owner unless it is outbid.
Two previous offers for the fully leased and occupied 83,000 square feet of space at the former Olympic Village fell through. EY received the unsolicited offer on September 16. It includes a $2 million deposit and a $1.25 million termination fee to be paid to First Capital should another party acquire the property. The 12 retail/commercial units are anchored by Urban Fare (22,682 square feet) and London Drugs (16,362 square feet).
EY lawyer Steven Devorak of Bull Housser told Fitzpatrick that the package will be offered through advertisements in the Globe and Mail's national edition. EY also contracted CBRE to seek a buyer. He said, "anyone who may be a player is already aware of this property."
If there is no other qualified buyer, the First Capital offer could close within 19 days of the ad campaign. If there are multiple bidders, the property would be auctioned with closure no later than 64 days after publication.
Lawyers for the City of Vancouver and Millennium did not attend the chambers hearing. EY was appointed receiver on November 17, 2010, when Millennium's Southeast False Creek Properties division was petitioned into receivership over $750 million owing to the city. In April 2011, the city estimated it would eventually show a $50 million loss. That figure didn't include the $170 million that it originally expected Millennium to pay for the land. The city bailed out Millennium in the fall of 2008 after Fortress Investment Group stopped lending amid the global credit crunch.
When the Shops deal closes, it will become the biggest single deal at the $1.1 billion complex this year. BK Prime False Creek Residences Holdings Ltd., a division of Bentall Kennedy, bought 119 market rental units for $41.5 million in a deal that closed August 15.
The October 4th-filed Fifth Report of E&Y said $335 million had been distributed to the City of Vancouver from the sale of units and market rental buildings.
Of the 1,108 units, 1,026 have been sold or rented. That includes 55 of the 60 units in the marquee Canada House by the False Creek seawall.
