Two Waters in Colwood is on the market to pay off $25.4 million in debt

The 26.5-acre Two Waters Colwood property is on the market to pay off a $25.4-million debt in a court-ordered sale.

Colwood Mayor Rob Martin hopes a sale will finally lead to construction of hundreds of new homes on the sloping site facing Esquimalt Lagoon, after other plans fell through.

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“We have a real aspiration to build that out and to see that completed,” Martin said Wednesday. “Council and myself are very supportive of moving that project forward.”

After an initial 88 units were built more than decade ago, there has been no additional construction by subsequent owners, who each announced ambitious development plans.

The land is zoned to hold 707 new homes and features views of the Olympic Mountains and downtown Victoria.

Ross Marshall, senior vice- president of the investment properties group at CBRE Limited in Victoria, pointed to today’s hot real estate market, saying well-capitalized developers are showing interest, given that this a large tract of land, with ocean views, and where residential construction can be carried out in phases.

The site is currently zoned to build low- to mid-rise multi-family dwellings. Development permit approval has already been granted for the first phase of development.

An asking price has not been set but Marshall said he has been given guidance to look at about $30 million.

Conversations are taking place with potential purchasers as CBRE concentrates on getting the word out to as many qualified purchasers are possible, he said.

It may happen that a date will be set to submit offers but that decision has not been made yet.

When an acceptable offer comes in, it will go to court for approval. At that time, others interested in the property would also be able to submit offers through the court.

Some have indicated they may pare down the allowed density and propose a different mix of housing than previously contemplated, he said.

Potential purchasers “understand that they’re going to have to get shovels in the ground in order to start to get some traction with respect to sales, as opposed to what had happened in the past, which was trying the pre-sales route.”

Two Waters has gone through name changes and different owners in the past 14 years.

Developer Peter Daniel bought it and called it Aquattro in 2007. He built the initial 88 units in three condominium buildings and six townhouses.

Financial woes led to a receiver being appointed in 2010. Seacliff Properties Ltd. of Vancouver bought the site in 2013 under a court-ordered sale and renamed it Ocean Grove.

At that time, Seacliff figured it would cost close to $250 million to create a community featuring amenities for those interested in an active lifestyle. The property borders a bird sanctuary at the waterfront.

Seacliff obtained a rezoning from municipal hall but construction did not go ahead. In 2018, Relevant Properties purchased the site and changed its name to Two Waters.

A Relevant official predicted the first phase of 61 townhouses would be complete about spring of 2020. But again, construction did not start.

In December 2020, Master Carolyn Bouck of the Supreme Court of B.C. granted an order of sale to Bridging Finance Inc. Court documents state that Relevant Properties and its related numbered companies owe $25.4 million, plus daily interest.

As well, Seacliff said in a court document that as of March 2020 it was owed $9.5 million, plus interest.

Marshall is acting for lenders Bridging Finance and has been talking to possible buyers. As some markets elsewhere in the country, such as Alberta, have softened somewhat, developers are looking to reallocate capital to the west to places like Victoria with its “exceptionally strong residential market,” he said.

Sellers in Greater Victoria’s market are in a favourable position because inventory is low. Homes frequently sell at above the asking price. Colwood is eager to support more development and its Royal Bay and Royal Beach developments are among projects adding new housing to the growing community.

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