The development would front both Lougheed Hwy and Goring Street west of Holdom Station.
Burnaby NewsLeader article below
At 4.5 acres, the property where Revs Bowling Centre sits beside Holdom SkyTrain station would appear to be ripe for redevelopment.
But don't count on new highrises going up anytime soon. For almost two years it's been caught in a legal tug-of-war between the owner and a prospective buyer.
The owner claims the fact the land could be rezoned for higher density redevelopment than he realized was kept from him and that other wrongdoings took place, so he refused to go through with the sales contract. The buyer denies the allegations.
In December 2012, YouYi Group Holdings (Canada) Ltd., led by Xiao Dong (Allen) Liu, filed a lawsuit against Brentwood Lanes Canada Ltd., which owns the Burnaby bowling centre property, as well as others in Maple Ridge and Ontario.
Youyi's statement of claim outlined the transaction in which offshoots of its company agreed to buy the property at 5502 Lougheed Hwy. for $28.8 million in a contract signed in October 2011. It was to pay deposits totaling $450,000 and the sale was to complete on Dec. 19, 2012.
It also had a contract to purchase the 4.2-acre Maple Ridge bowling property for $3.2 million in a similar deal.
Since then, YouYi says, it has retained an architectural firm to prepare a concept for a three-tower, highrise development and commissioned a geotechnical and structural engineering report to ensure the plan is feasible. It says it also met with planners and other staff at Burnaby city hall to identify city rezoning requirements and began negotiations with a "highly reputable development company" to partner in a joint venture for the property's development.
YouYi says it has made "significant progress in the rezoning process" and its efforts have increased the value of the property.
The first YouYi heard that Brentwood Lanes would not close the deal was through a letter from their lawyer on Dec. 4, 2012. "The purported reason for their decision … was alleged wrongdoing on behalf of YouYi, including the taking of secret commissions and fraud," said the statement of claim. The allegations are "wholly unfounded and a bad faith attempt by the defendants to avoid their obligations under the contracts."
It wants the courts to force Brentwood Lanes to go through with the sale.
But in its response, Brentwood Lanes says the deal was off because of the buyer's "inability to complete the purchase" and "fraudulent conduct."
Brentwood Lanes owner Jeong Lee was approached by insurance agent Neil Wong in April 2011 with a proposal that he and his associates—realtor Kevin Hien, and businessmen Gary Chow and Stanley Chow—would find overseas buyers in China for the Burnaby, Maple Ridge and Ontario properties.
In July 2011, Wong and Hien told Lee they had found buyers interested in the Burnaby and Maple Ridge properties but not the Ontario ones.
At least as early as July 11 of that year, unknown to Lee, the others involved knew that the Burnaby land could be rezoned to RM5s, with potential higher density than the RM5 he was aware was possible, said the response.
Lee relied on Hien's advice, and the realtor said he would act solely for Lee, the document states. The offer was received from YouYi's Liu, "who Hien represented to Lee to be an experienced real estate developer with wealthy business partners in China." Hien also advised Lee that $32 million for both the Burnaby and Maple Ridge properties was above fair market value.
Shortly after accepting the offer, Lee agreed to sign fake contracts stating the Burnaby property alone was sold for $38.8 million and not the actual $28.8 million. Hien advised Lee that Liu wanted to use them to show investors in China his success in negotiating a reduced price.
Instead, Liu used it to try to flip the property for more money to other developers or buyers, said Lee's response. Around September 2012, Liu showed the false contract to a developer and offered to sell his interest in the land for $40 million.
Lee's response also alleges he was convinced to sign commission-splitting and referral-fee agreements to Hien and the others, even though the others were ineligible due to their not being licenced realtors in B.C.
He alleges Hien convinced him to sign documents that, unbeknownst to Lee, were to misrepresent the rental income of the property to help YouYi get financing for the purchase. Lee also agreed to help finance YouYi's purchase.
But he did not agree to participate in a case of mortgage fraud, in which he was asked to confirm that YouYi had paid him $8 million more as a deposit than it had, to help it secure financing.
Lee makes other allegations including claims of a secret bribe and that Hien acted in collusion with Liu. None of the allegations has yet been proven in court.
Through the fact the buyers did not have the financial ability to complete the purchase, and by asking Lee to participate in the mortgage fraud, "the plaintiffs have repudiated the contracts."
Lee first began to doubt Hien's advice he was getting well above fair market value in December 2011, when another realtor brought him an offer to buy the Lougheed property for $28 million.
Lee sought an appraisal of the land in January 2012, which informed him of the RM5s zoning eligibility and pegged its value at $38 million.
When he brought it up with Hien, the realtor said Liu had no plans to take advantage of the RM5s zoning and would only rezone it to RM5, even drafting documents with YouYi agreeing to that.
"At all material times, Hien was aware that Liu had no intention to comply with the rezoning covenant and that Liu had explored with the City of Burnaby the rezoning of the Brentwood property to RM5s," the response states.
Brentwood Lanes has filed a counterclaim against YouYi, its offshoots, Liu, Hien and others seeking to have the sales contract cancelled, in addition to damages and costs.
The case continues to wend its way through the courts.
YouYi had a certificate of pending litigation (CPL) registered on the land title. A lower court cancelled it at Brentwood Lanes' request. Just last week, the B.C. Court of Appeal slapped it back on until a final decision can be made following a trial.
According to the most recent court judgement by BC Appeal Court Justice Mary Newbury, Lee has retained a new real estate agent who says the CPL is preventing him from finding a new buyer for the Burnaby property.
Meanwhile, the bowling continues at Revs.