Eight months later and still no update on speedway project Speedway’s financial backers fall on hard times

NEWS Aug 22, 2017 by James Culic  Fort Erie Post

The Canadian Motor Speedway, which developers once said would be built and operational in 2016, has still not been able to secure a building permit, or the land needed to move forward. Another summer construction season is drawing to a close without any development.

After incurring millions of dollars in losses, the Kuwait-based investment company providing the financial backing for the speedway saw its stock tanked. This month, the company agreed to de-list itself from the stock exchange.

Emirates Consulting, a key firm behind the development of the speedway project, had its website pulled over the summer, and the phone number for its Toronto office goes directly to a recorded message that no one is available. The website was put back online after Niagara this Week began making inquiries.

FORT ERIE — More than eight months after agreeing to meet with town officials to provide an update on the long-delayed Canadian Motor Speedway project, the developers have still not done so, and are no longer answering questions about the status of the project.

The overseas company providing the funding for the project appears to be in severe financial trouble.

About five years ago, the developers claimed the facility would be “race ready in 2016” but have thus far not applied for a building permit to get the project rolling.

By late 2016, councillors in Fort Erie began to grow weary with the lack of progress and updates on the project. Council made a formal request to have project director Azhar Mohammad come to Town Hall — as he has done several times in the past — to provide an update. Mohammad agreed and sent reply that he would make a presentation to councillors in January. That was later pushed back to February. That was then rescheduled for March, then pushed again to April. Four months after that, and eight months after originally agreeing to meet with town officials, Mohammad has still not done so.

The developers hired automotive journalist Erik Tomas to act as a spokesman for the project several years ago, and when reached for comment back in March, he said the meeting between Mohammad and councillors was in the process of being rescheduled. Despite multiple attempts recently, Tomas did not respond to Niagara this Week’s requests for comment, an update of the rescheduling of that meeting, or the status of the project. Officials at Town Hall said it has been several months since anyone has heard from Mohammad.

“The last time we spoke (to Mohammad) would have been about four months ago,” said the town’s planning director, Rick Brady, in an interview last week. In terms of real progress, Brady said a consulting firm, IBI Developers, hired by the speedway developers had submitted a site plan to Town Hall about 17 months ago. As is typical of site plans, there were some issues and Brady said his planning office asked for resubmissions. So far, nothing has been received.

The most important milestone on the speedway timeline is undoubtedly the issue of a building permit. At the beginning of each year, the mayor’s office gives a State of Fort Erie address to the public about the town’s economic prospects, and in both his 2015 and 2016 address, mayor Wayne Redekop boasted that he was confident a building permit would be issued before the end of the year. In his 2017 address, the mayor made no mention of a building permit.

Each year since 2014, the developers have claimed they would be applying for a building permit and starting construction in the summer. The speedway’s official website still claims that it will be conducting “six months of site alteration in 2017” but with only four months left in the year there has still been no work at the site this year, and with the necessary property still not purchased, any construction would be several months away at best.

No building permit can be issued because the Ontario Municipal Board (OMB) enforced a holding provision back in 2012 which requires the speedway corporation to purchase the property of three nearby residents whose homes would be impacted by the massive motor racing facility. Until all three of those homeowners — one each on Laur Road, Gilmore Road and Sunset Drive — have sold to the speedway developers, the holding provision remains in place and no building permit can be handed out to the developers.

A sunset provision placed within the ruling also threatens to shut down the entire project within about three years.

Should the developers fail to acquire the three properties by September 2020, the entire area on which the project is to be built, reverts back to its original agricultural zoning designation and the decade-long process will be back to square one.

Surrounding the project is a web of shell corporations, middleman consulting firms, overseas financiers and subsidiaries. At the local level is a numbered Ontario corporation (1746391 Ontario Inc.) which owns the planning documents associated with the development, but otherwise doesn’t do much. The corporation has been relatively dormant for years, though during the last provincial election in 2014, records show the company donated $1,300 to Kathleen Wynne’s Liberal re-election campaign.

One step above that is Emirates Consulting, a Toronto-based firm which acts as a liaison between investors from the Middle East and projects in Canada which require big money backers. The executive director of the company, Azhar Mohammad, is also a director on the speedway project and a key figure in the whole process. Mohammad has been the public face of the project, and has been the town’s primary point of contact since about 2010 when the speedway plans first emerged.

More recently, phone calls to the Emirates Consulting office go directly to a message saying that no one is available. The website for the company was also off-line for some time through the summer, with a placeholder site directing the company to the billing office for the website provider, however, shortly after Niagara this Week began making inquiries into the status of the company last week, the website reappeared online. The site’s host, Zero Hosting, would only say that a “cache problem” was responsible for the outage.

Another level up is Al-Themar International Holding Company, a Kuwait-based investment company. This overseas entity owns some of the property in Fort Erie on which the proposed speedway is to be built.

It is also the primary source of funding for the $400 million speedway project. Lately, the company has had a rough go. After piling up millions of dollars in losses in its last financial quarter, the company’s stock price plummeted to its lowest level since the global recession in 2008. The company agreed this month to delist itself from Boursa Kuwait (the Kuwait stock exchange) due to the devalued stock bottoming out at an 11-year low.

Al-Themar International Holding Company is a subsidiary of The International Investor (TII), another Kuwait-based financial institution with a bevy of projects around the world. The CEO of TII is Ibrahim Aboutaleb, who is also listed as the CEO of the Canadian Motor Speedway.

In its 2014 financial report, TII wrote to investors that “(The) Canadian Motor Speedway project has passed some key regulatory milestones, and is poised for takeoff.”

Years later, the project has not yet put a shovel in the ground, and the developers still haven’t purchased all the necessary property to proceed with the plans.

In its 2015 financial report, TII revealed that it was paying homeowners in Fort Erie a yearly fee of about $15,000 as part of a purchase and sale agreement to buy the property at a later date, should the speedway project move ahead. In the summer of 2016, Niagara this Week confirmed through sources that those contracts were no longer in place, and that the owners of the remaining property needed for the development had not been in contact with the developers for months. Homeowners confirmed again this week that they have had no contact with Mohammad or anyone associated with the speedway in more than a year. All the homeowners were prepared to sell to the developers years ago, but on more than one occasion the developers walked away from the sale without explanation.

In 2016, the same year the contracts with the homeowners were abandoned, TII stopped filing its public financial reports, and has not done so since then.

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