Rocky Mountain Plaza: bids must now take the U.S. consulate's lease

The tower at the corner of Macleod Trail and 7th Avenue SE in Calgary is a 15-storey office building whose main floor once held an internal mall. In June 2023 its owner, Rocky Mountain Alberta Partners Ltd., put it to the City of Calgary's Downtown Calgary Development Incentive Program as a conversion of "over 200,000 sf of 'C' class office space to residential": about 205 units, a dog wash and a rooftop patio, and the tower's exterior to "remain as is in order to celebrate and modernize the brutalist architecture" of a building the submission calls the backdrop of Olympic Plaza. The submission is an exhibit to the affidavit sworn a year later for Canadian Western Bank's receivership application, per the Affidavit of Cory Stark, June 28, 2024, Ex. "B". The bank's affiant, Cory Stark, who describes the exhibit as an excerpt of an appraisal, gives its figures for the project, 402 days and $61,580,000, and deposes that the conversion had not begun, per the Affidavit of Cory Stark, June 28, 2024, paras. 5–6.

The vacancy, 77% in June 2023 on the bank's figures, was 84% when FTI Consulting Canada Inc. became receiver in August 2024, and the receiver ties it to the plan: the company "was attempting to pursue a residential conversion which would require the Building to be vacant, hence the high vacancy rate," per the Affidavit of Cory Stark, June 28, 2024, para. 5 and the First Report of the Receiver, June 26, 2026, paras. 21, 23. Three tenants were left: a Tim Hortons franchise run by TDL Group Corp. on the ground level, on a lease to July 2028; Stone Bowl Korean Cuisine, month to month; and the United States of America, which occupies premises on the first and tenth floors for its consulate, on a lease to June 2029. The building takes in approximately $75,000 a month in rent and has recurring operating costs of more than $100,000 a month, per the First Report of the Receiver, June 26, 2026, paras. 21–23 and the Application of the Receiver, June 26, 2026, para. 7.

The bank had financed the building under an October 5, 2018 commitment letter, secured by a $25,000,000 mortgage, and was owed $19,596,551.00 at June 21, 2024. Mr. Stark, its assistant vice-president of special asset management, describes a demand on July 13, 2023, forbearance agreements extended to February 29, 2024, a $420,000 lump-sum payment the company did not make, and a refinancing from a Toronto lender that the bank had seen no evidence would come. On March 4, 2024, he says, the company's representative forwarded him an email saying the funds "are to be released any day," per the Affidavit of Cory Stark, June 28, 2024, paras. 1, 7–9, 13–23.

Justice J. Simard appointed FTI receiver and manager on August 21, 2024, under s. 243(1) of the Bankruptcy and Insolvency Act and three Alberta statutes, with the consent of the company's counsel, Robertson LLP, dated July 8, 2024. The order gave the receiver and its counsel a charge of up to $250,000 for their fees and disbursements and let the receiver borrow up to $500,000 under a charge ranking ahead of all security interests, trusts and deemed trusts, per the Receivership Order, Aug. 21, 2024, paras. 2, 18, 21, p. 12. Behind the bank, which the receiver's 2026 papers call National Bank of Canada, "previously Canadian Western Bank," stand Dundeal Summer 2011 Collection (GP) Inc., with a $3.8 million mortgage subordinate to the bank's security, and about $1.0 million of unsecured trade payables, per the First Report of the Receiver, June 26, 2026, paras. 15–17 and the SISP Procedure, June 26, 2026, s. 5(p).

Three offers, all for conversion

FTI chose Avison Young Commercial Real Estate Services, LP from four listing proposals. Avison Young listed the building on or around October 15, 2024 at $18,525,000 and sent marketing materials to 677 potential investors and brokers. Nine parties signed confidentiality agreements: one owner-user, two office investors and six interested in converting the building to residential use, per the First Report of the Receiver, June 26, 2026, paras. 24–31.

Three offers came in at the November 14, 2024 bid deadline. The report's table of their "non-sensitive terms" shows one declining to assume the existing leases, another asking fifteen days for due diligence, and a third excluding the consulate's lease. The receiver then asked for best and final offers by December 3, with deposits of at least 10%; the same three parties bid again, and Avison Young advised the receiver that all three meant to convert the building to residential use, per the First Report of the Receiver, June 26, 2026, paras. 32–36. After consulting the bank, the receiver chose the bid of 2663019 Alberta Ltd. as "the best overall bid for the Building" and signed a purchase and sale agreement with it in December 2024, per the Application of the Receiver, June 26, 2026, paras. 19–20.

Among the agreement's terms the report lists a deposit of 10% of the purchase price, paid on or around January 8, 2025 and held in trust; the Tim Hortons and Stone Bowl leases as "the only permitted leases"; the consulate's lease among the non-permitted encumbrances; and court approval, with closing within 30 days of it, per the First Report of the Receiver, June 26, 2026, paras. 38–39. The consulate's lease was excluded because, the receiver's application explains, the buyer's conversion "required complete vacancy of the Building, as it involved, among other things, completely removing and reinstalling plumbing and HVAC for the Building," per the Application of the Receiver, June 26, 2026, para. 23.

A lease to 2029, and a certificate from Ottawa

The company and the consulate signed their lease on July 29, 2019, for five years ending June 30, 2024. On that last day a Lease Amending Agreement extended it by five more, to June 30, 2029. According to the receiver's application, the amending agreement includes an acknowledgement by the parties that the company "was endeavouring to redevelop the Building to residential use" and that the consulate "was attempting to locate a new property to relocate and continue its operations, as a consular premises." The receiver's initial understanding was that the extension "was a temporary measure to ensure that the US Consulate could transition to a new premises, in Calgary," per the Application of the Receiver, June 26, 2026, paras. 10–13. The leased space is approximately 4,623 square feet on the ground level and 14,119 square feet on the tenth, per the SISP Procedure, June 26, 2026, s. 5(ll).

At first the receiver understood the consulate intended to leave by early to mid-2025, per the First Report of the Receiver, June 26, 2026, para. 42. On January 23, 2025 it told the consulate the approval hearing was booked. At a meeting on January 28 the consulate confirmed it was negotiating a lease for new premises. It could not confirm when it would be able to vacate, and the application gives the reason: the consulate "requires specific security protocols to be in place, for consular staff and visitors, as well as secured storage for consular documents, which are protected under Articles 31 and 33 of the Vienna Convention on Consular Relations," per the Application of the Receiver, June 26, 2026, paras. 28–30.

The receiver moved the February 18 hearing to March 20, 2025. On February 21 the consulate said it intended to use commercially reasonable efforts to vacate within 18 to 24 months, with, in the report's words, a "targeted exit date of late 2026 or early 2027." On April 30 its Canadian counsel said it was finalizing a new lease at another location but could give no further details, including a timeline, and the receiver adjourned the March date as well, per the First Report of the Receiver, June 26, 2026, paras. 40, 44–45.