Apple Bails Out of Troubled Toronto ‘The One’ Retail Development, Leaving Site Without an Anchor Tenant

Apple has pulled out of a troubled retail development project, leaving the site without an anchor store. The contentious project is Toronto’s The One retail project.

The Mizrahi Developments project, which Toronto’s BlogTO said would be “Canada’s tallest tower” has been under construction since 2016: an 85-story skyscraper located downtown at the corner of Yonge and Bloor that includes condominiums located above a significant shopping area of 18 floors of retail space.

It was announced in 2018 that Apple would be involved in the construction project, with plans to build a 9,000-square-foot retail store in the retail complex.

However, in February 2022, Apple threatened to pull out of the project if certain milestones and deadlines could not be met to the Cupertino firm’s satisfaction, and Apple has now made good on that threat. iPhone in Canada reported on Friday that the project fell into bankruptcy due to a massive $1.6 billion dollar debt, as well as several construction delays.

“The Project recently lost its anchor retail tenant, and no replacement anchor tenant has been secured,” stated the court documents filed by lender KEB Hana Bank.

Mizrahi Developments reportedly told Apple in December 2020 that the project completion would be delayed until October 31, 2021, due to delays caused by the coronavirus pandemic, as well as a 2019 strike by the local plumbers’ union.

Apple told Mizrahi Developments at that point that it would terminate its lease. The development firm then sought a court order to prevent Apple from pulling out of the deals, claiming that it had not missed the disputed deadlines.

“[The One will] suffer irreparable harm from losing a world-class tenant that was intended to be an anchor tenant for a world-class property,” says the developer in court documents.

For its part, Apple was seeking nearly $30,000 to compensate for an agreement the iPhone maker made with long-term design partners Foster + Partners, as well as another $6.9 million in damages.

“Apple is profoundly disappointed with Mizrahi,” said Apple Canada in an application filed on January 28, 2022, in Ontario’s Superior Court of Justice. In addition to the $6.9 million in damages, Apple was also seeking a court order to allow it to terminate its lease with no repercussions due to Mizrahi Developments’ missed deadlines.

Apple has planned to lease more than 15,000 square feet, which would include a 9,000+ square feet retail area on the project’s ground floor. The retail space was expected to incorporate a design that would be surrounded by several layers of glass with no breaks. The plan would use 34 custom-fabricated panels costing over $300,000 each.

Mizrahi Developments’ court filings claimed that it was delayed due to waiting for Apple to choose a design for its storefront glass.

In a deal reached with Apple, Mizrahi Developments will pay Apple’s design costs, which are estimated to be $6.24 million Canadian ($4.87 million US).

The project, developed by Sam Mizrahi and Jenny Coco, was initially slated to be completed by December 2022 at an estimated cost of $1.4 billion. Unfortunately, construction of the 85-story project has only reached the 40th floor. The new completion date for the build is projected to be March 2025, and it’s expected to have a final overrun of $600 million.