Third in a five-part series
St. John’s-based developer Myles-Legér faced more than one lawsuit stemming from its early development work, before it was declared bankrupt in July 2004 — a case still unresolved.
The company had a subsidiary, Myles-Legér Construction, taking on work that might otherwise have been subcontracted out.
It is not unheard of for development companies to have construction arms. And Myles-Legér also hired subcontractors from time to time.
But the level of work undertaken by the company on its own, early on, stood out for some members of the local real estate and development industry.
And claims against construction work started to dog the company after a few years.
Myles-Legér’s Patrick Street project — redeveloping an aging apartment building to fresh condos known as Hillshire Manor Condominiums in St. John’s — was the subject of a lawsuit in 2003.
Myles-Legér was general contractor on the project. Once the job was completed, the units were sold, and ultimately a collective of unit owners was created, incorporated as the Hillshire Manor Condominium Corp.
The new owners soon had a list of issues with the property, ranging from rust damage on exterior railings and lime leaching on outside walls to what they felt was a need for weather stripping on exterior doors.
They brought the list to the attention of Myles-Legér, according to court documents.
“The (Hillshire Manor Condominium Corp.) states that (Myles-Legér) undertook to effect repairs on the deficiencies as noted, however such deficiencies remain outstanding despite repeated requests by (the corporation) for those repairs to be completed,” the claim reads.
Myles-Legér never argued. The company did not file a defence.
A similar case came in April 2004. The Charter Club Condominium Corp. filed a lawsuit relating to leaking roofs at the condos at Charter Avenue and Janeway Place.
Myles-Legér had flipped the buildings in its first summer of business, taking existing apartments and renovating them.
The condominium corporation that subsequently evolved was a collection of owners of individual units. Ownership of common areas and management of the five buildings in the Charter Club complex was transferred to the homeowners’ corporation in June 2001.
Then came the leaks.
The problem was unexpected by the new owners, according to court documents, given that the roofs on the buildings were supposed to be new, with an associated five-year warranty.
In April 2002, a second building in the complex, at 54 Charter Ave., was hit with leaks, damaging several individual units.
“(Myles-Legér) denied the existence of a warranty and refused to fix or pay for the repairs to the roof,” reads the claim.
The condo corporation spent more than $11,000 for the fix.
In 2002 and 2003, there was more than one leak discovered at 11 Janeway Pl. Each required a repair call to minimize damage and about $6,000 was paid for temporary fixes. “(Condo owners) asked that the roof be fixed pursuant to the warranty. Again (Myles-Legér) refused to pay for or arrange to fix the leak,” the claim states.
Condo owners were then told the entire roof for 11 Janeway Pl. needed to be replaced, at a cost of about $22,500.
They finally went to court to recover costs, plus to demand proof from Myles-Legér of the work completed and relevant warranty.
The company did not file a statement of defence.
Public challenges also costly
The majority of Myles-Legér’s properties had no claims against construction, but given the company’s penchant for proposing developments on prime properties, zoning and permitting through the City of St. John’s provided its own challenge.
In 1999, the 7.5-acre property off Bonaventure Avenue and Newtown Road, including the four-storey Belvedere Orphanage and two-storey St. Michael’s Convent, became the subject of a Myles-Legér proposal, for a 114-townhouse subdivision, valued at an estimated $12 million.
It was a landmark site, given that the orphanage had been on the property since 1885.
There was opposition to rezoning the land and further opposition to a permit to bulldoze the existing buildings in order to make the plan a reality.
“It’s obvious there’s no way our application’s going to get approved under the present environment,” said a frustrated Randy Clarke in February 2000. He was speaking to a second, revised plan submitted at that point for a much smaller subdivision.
The Avalon East School Board raised concerns that access roads would affect traffic around nearby Holy Heart of Mary High School and MacPherson Elementary. Then there was the underground steam lines for nearby Brother Rice school.
The Clarkes went ahead and paid $500,000 to secure the Belvedere property from the Sisters of Mercy in March 2000. And in September 2000, Bill Clarke told The Telegram it had cost the company about $100,000 to maintain the buildings, including providing private security, while the back and forth on the development continued.
But the brothers stuck with the idea of a new construction project on the property.
In 2002, city council approved a plan for 32 homes — townhouses and semi-detached houses — on the site. The street that soon appeared became known as Margaret’s Place.
In another case, the company took more onto its shoulders when it sidetracked into the world of home care. Myles-Legér obtained the former Presentation Sisters’ Assumption Convent off Bonaventure Avenue and proposed a personal care home, Margaret’s Manor. The project required licensing through the Department of Health.
A third novel case was the former General Hospital property off Forest Road, picked up by the company from the provincial government in 2002 for $1.
By the following year, then city councillor Shannie Duff was questioning what was going to be done with the property, and the company was being pressed for a swift investment in development.
As of March 2004, the co-founders of Myles-Legér were attributing delays to problems with the city’s heritage committee, but also to trouble arranging financing.
“If anybody on the committee knows of somebody who wants to buy the old General from us for the appraised value, feel free to make us an offer,” Bill Clarke said at the time.
The company was insolvent within two months.
Wednesday: Damage spreads to Argentia