By Kevin Dono­van – Toronto Star

Kazakhstan-backed devel­oper Michael Gold is sell­ing his prime prop­erty at Yonge and Bloor Sts., sig­nalling that his planned glass tower 1 Bloor condo and hotel project may be dead.

Gold made the deci­sion as part of his court-approved plan to keep the prop­erty out of receiver­ship, where his main cred­i­tor tried to send him ear­lier this week.

Doc­u­ments filed in court yes­ter­day show Gold and his com­pany, Bazis Inter­na­tional of Kaza­khstan, will sell the land on the south­east cor­ner of Yonge and Bloor to an unnamed buyer. The buyer must make a “good faith deposit” as part of the land sale by next Wednes­day, and the deal must close by Sept. 16. Sev­eral other con­di­tions are attached, includ­ing a “due dili­gence” period for the unknown buyer to ana­lyze the deal.

“I have to won­der if the new buyer will want to build the same thing (Gold) did,” said Ray Tabrizi, a pur­chaser of a unit in the 80-storey tower that Gold planned. “Maybe the new guy will go half the size, one-third, who knows?”

The saga of 1 Bloor began in 2007, when hun­dreds of buy­ers lined up for weeks to own a unit in the tallest res­i­den­tial build­ing in Canada. A hotel and retail space was part of the plan. Units went on sale from $500,000 to $8 mil­lion and above.

Com­ment: I think this rep­re­sented the pin­na­cle of Toronto real estate chaos. Peo­ple were being paid $1,000 or more per day to hold spots in line, fist fights, secu­rity guards, etc. More than a few of us shook our heads at that spec­ta­cle… What had become of peo­ple? It was embar­rass­ing. But how that level of inter­est and that many deposits could not save a build­ing, that makes no sense at all.

Gold bought the land, cleared it, but last Decem­ber stopped mak­ing pay­ments on a $46 mil­lion land loan. The bank that advanced the loan sold the loan ear­lier this year to a con­sor­tium of Toronto busi­ness­men at a dis­counted price, the amount hav­ing not been revealed. When the loan con­tin­ued to be in default, the lenders, led by financier Gary Berman, tried to place the project into receiver­ship. Berman’s group offered $50.5 mil­lion, uncon­di­tion­ally, to pur­chase the land and Gold could walk away.

But Gold, whose wife’s fam­ily is behind Bazis in Kaza­khstan, issued an angry state­ment on Mon­day say­ing Berman’s group was try­ing to steal his project. He warned that Berman’s group “plans to can­cel all deals with buy­ers, retail­ers and the hotel chain.”

“If the court deci­sion is approved, almost 500 condo buy­ers, the retail chains, which were to have flag­ship stores in the podium and the Sof­i­tel five-star world-hotel chain at 1 Bloor will all be out in the cold,” Gold said in the statement.

Now, one day later, condo unit own­ers spec­u­late Gold may be about to do the same thing.

The court-approved set­tle­ment refers to a let­ter of intent to pur­chase, but the let­ter itself was not filed in court. The deal calls for the land to be sold as “vacant land” (it has been cleared) but does not say if the pur­chaser wants the prop­erty free and clear of the condo plan.

Last week, Gold down­sized the 80-storey plan to 67 floors.

If Gold’s bid to sell the prop­erty goes through, Berman’s group will be paid out in full. Until then, they will have to set­tle for a $242,823 inter­est pay­ment for the cur­rent month.

Mean­while, about 500 pur­chasers are wait­ing to hear what will become of about $70 mil­lion in deposits held in trust by Gold’s lawyer. Tabrizi, who paid $125,000 down for his $500,000 unit on the 42^nd floor, is watch­ing the Bazis Toronto web­site at www​.1bloor​.com hop­ing for a state­ment from Gold.

“My faith in these guys is gone, my trust is gone,” said Tabrizi, who works in floor­ing sales, and made the pur­chase as an invest­ment for his family’s future. “I should have just left the money in the bank.”

The pur­chasers’ agree­ments promise inter­est on their deposits should the money be refunded.

The court doc­u­ments make no men­tion of Gold’s plan ear­lier this month to bring in $195 mil­lion in loans from BTA Bank of Kaza­khstan, which is under crim­i­nal inves­ti­ga­tion over­seas for loan fraud.

Lawyers and rep­re­sen­ta­tives for both sides refused to com­ment on the events of the day.

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