Developer Harry Stinson says Hamilton projects continue despite accusations he broke provincial securities law
Developer Harry Stinson says accusations levelled by Ontario's securities regulator over a Buffalo hotel redevelopment put a cloud" over him but have not slowed his Hamilton projects.
The Ontario Securities Commission alleged in papers filed last month that Stinson and his companies improperly solicited $19 million for a planned condo conversion of the historic Buffalo Grand Hotel, misled investors and ended up using some of those funds for other projects.
The accusations have not been proven. But Stinson faces a Wednesday tribunal hearing over OSC requests for orders to, among other things, stop trading in securities and pay administrative penalties potentially in the millions of dollars.
The always-quotable developer disputes the allegations and stressed in an interview there is no mob of investors screaming we were robbed."
Stinson predicted the allegations will eventually be proven to not be quite as alarming as they may sound," but added he will not publicly go through a point by point rebuttal" during his efforts to reach a settlement with the commission.
I am not hiding from this ... Allegations have been made, we disagree with them, and we'll see the process through," he said. It's not causing me to slow down (on local projects). But does it put a cloud on things? Of course it does."
The 69-year-old, once known as the Condo King' in Toronto, moved to Hamilton in 2008 and immediately grabbed headlines with an ambitious plan - ultimately unrealized - to build Canada's tallest tower behind the Royal Connaught.
He is likely now more familiar to Hamiltonians for conversions of the former Stinson and Gibson schools into condos and rental lofts - and more recently, an oft-changing proposal to redevelop the former Cannon Knitting Mills complex.
The historic but contaminated collection of mill buildings constructed between 1854 and 1935 sat vacant for years during a failed private-public partnership with the city meant to redevelop the complex.
Stinson bought the complex for $3 million in 2016 with plans for a six-storey hotel and condo conversion. The plan grew to include 20 storeys in 2018 - and may grow again before any major construction begins.
The developer said he has deposits from would-be condo buyers for up to 20 floors, but he needs more height to make the costly remediation and redevelopment economically viable" in today's market.
Neighbours are increasingly anxious to see redevelopment of the vacant and crumbling industrial icon, said Mike Borrelli, a longtime member of the Beasley Neighbourhood Association.
It has been what, five or six years without anything happening? It's tough to see, because Beasley needs new housing more than ever before," said Borrelli. I think a lot of people are saying, develop it or sell it to someone who will.'"
Ward Coun. Jason Farr said he is also antsy" to see the complex transformed. He acknowledged Stinson has been in talks with city planners about various concepts" for the property but the reality is nothing is happening yet."
Farr declined to comment on the OSC allegations other than to wish Stinson a speedy resolution. If it means we can get the Cannon project going, more power to him to put this episode behind him."
The OSC allegations primarily relate to a U.S. plan to redevelop the historic, 486-room Buffalo Grand Hotel, which Stinson bought for around $17 million in 2018.
That project has been fraught with setbacks, including Buffalo city court charges last year related to licence and building infractions and massive fire damage from arson last December that Stinson said made parts of the hotel look like something from a Die Hard movie."
The OSC allegations include:
- Illegally promoting the improper purchase of company shares or debt in the hotel project;
- Promoting that investments would be eligible for retirement savings plans, which the OSC said is false. (In an interview, Stinson said he would contest this point;)
- Allowing investor funds to be combined with bank accounts for other projects or used for other projects;
- Continuing to issue shares to Buffalo Grand investors despite repeated orders to stop since 2020.
The statement of allegations also notes Stinson previously reached a settlement with the OSC in 2006 over securities law breaches related to a different hotel-condo project.
So far, Stinson said the allegations have not placed undue constraints on his finances, but he conceded they could in future if they affect his prospects with lenders.
The Spectator reported in 2009 that Stinson pulled the plug on a downtown Hamilton Grand" hotel proposal after investors were spooked by an OSC investigation into a Toronto investment company financing the project.
It could cause an element of doubt," Stinson said of the current OSC allegations he is facing. (But) it's not stopping me from doing what I have an obligation to do, complete the project for investors, for people who buy units."
Matthew Van Dongen is a transportation and environment reporter at for The Spectator. mvandongen@thespec.com