Mondo Condo

From Wikipedia, the free encyclopedia

Mondo Condo is the nickname given to the former hotel property located at 2737 Keele St. in Toronto, Canada. The property is at the center of a financial scandal that has been called "the Enron of Canada." The nickname "Mondo Condo" originates from the title of an online series of articles at Members for Democracy and topic thread discussions which detail the colourful 30-year history of the property.

The history includes...

a fugitive German financier wanted by the RCMP on 41 charges [1] stemming from the largest business fraud in Canadian history [2]
a former Catholic priest ten-times convicted of sex offences against teenage boys [3]
one of Canada's largest unions, the United Food and Commercial Workers, its revered leader [4] and the high-powered directors of its biggest pension plan [5],
the former Prime Minister of Canada, Jean Chrétien, and the former Premier of Ontario, Bob Rae.

[edit] Early History

Toronto Land Registry documents, along with archived newspaper material, trace the ownership and development of the land as follows...

1968 - Irving Investments and Irving Ungerman, a Toronto boxing promoter and entrepreneur, lease the land to a group of developers that include Yore Developments, Luhur Construction and three limited companies headed by Angelo, Elvio and Leo Del Zotto [6].

1971 - The Toronto Star publishes an article detailing hotel development plans [7]. An innovative "Drive-In" concept, a completion date of summer 1973, and a project name of "Keelson Inn" are outlined but fail to materialize.

1972 - The Del Zotto's lease the land to another one of the myriad of companies they control, named Deltan Realty.

1975 - The newly built hotel known as the "Triumph" opens for business in the late summer.

1978 - Deltan Realty sells the property to York-Hannover for $10.5 million. York-Hannover borrows $8.3 million from Deltan Realty towards the purchase.

York Hannover was a large international real estate business with interest in hotels, commercial buildings, nursing homes and shopping malls, including the Centre Eaton in Montreal. Karsten von Wersebe [8], a media-shy German magnate, was the President of its Canadian operations from the time of purchase right up to its bankruptcy in 1991.

1981 - York Hannover borrows $7 million against the property from the CIBC

1982 - York Hannover borrows a further $13 million against the property from the CIBC

This practice of over-mortgaging would continue for the next few decades.

1988 - On January 13th, the hotel received two additional loans from York Hannover Developments Ltd. in the amounts of $5.5 million and $10,323,878. On November 23rd, a further $10 million was mortgaged from the CIBC.

During this period substantial hotel renovations were undertaken. An additional wing, included a conference centre, was built at an estimated cost of over $7 million dollars, far below the total recently borrowed against the property.

1989 - On January 17th, the two York Hannover Development Ltd. mortgages ($5.5 million and $10,323,878) were transferred to a company named Castor Holdings Ltd., run by German Wolfgang Stolzenberg [9], who would later become an international fugitive. On April 10th, the CIBC, York-Hannover and Castor Holdings agreed that the CIBC was the first creditor and that its $10 million mortgage would have priority over the $15 million in mortgages that had been transferred to Castor Holdings.

1990 - Hard on the heels of the Castor Holdings transfer, the hotel began to default on many of its bills. Early in the year, a series of construction liens were registered against the property. These liens related to various unpaid bills for the major renovation work undertaken in the late 1980's. In May, tax arrears of $1.8 million were registered against the property by the City of North York.

By the time the hotel closed in 1991, the liens alone totalled over $500,000.