“There’s a big story to tell and it will make a great Netflix series someday,” says Hamilton developer Harry Stinson. “But now is not the time to air all that laundry. Right now, I am just trying to put out the fires literally and figuratively so we can get this thing back in operation.”
The President of Stinson Properties has found himself in hot water after the Ontario Securities Commission filed a statement of allegations against him. At the centre of the controversy is The Buffalo Grand Hotel, formerly The Adam’s Mark Hotel in Buffalo, New York.
Stinson bought the hotel and rebranded it twice. In news that’s now become the talk of the town, Stinson has been accused of inappropriately soliciting a cool $19M in securities from more than 200 Canadian investors for a condo conversion he allegedly abandoned.
In a lengthy document, the OSC claims that Stinson merged these funds with other bank accounts and for other projects.
The OSC alleges that hotel investor funds “were used for other Stinson projects and transfers were made to other bank accounts and credit cards, including certain accounts and credit cards held by Stinson.” The OSC alleges that Stinson mislead investors by telling them the investments were RRSP and TFSA-eligible and that some were backed by a mortgage or interest reserve. It also states that only a small amount of investor funds were spent on promised extensive renovations to the hotel.
The OSC’s statement names Stinson and an employee, Stephen Kelley. It requests that both men resign from their positions, stop trading securities, and be banned from being directors or officers of any issuer under the OSC. It also requests that they dish out an administrative penalty of $1M.
Buffalo Grand Hotel (Stinson Properties)
While he doesn’t go into details, Stinson vehemently denies the allegations and says there is no evidence that points to any shady activity. “There’s no yacht, there’s no Swiss bank account, I didn’t even take a penny in management fees,” he says.
But there’s also no promised condo development. Nor are there any accurate records of how funds were allocated, according to the OSC document.
Stinson remains careful with his words on a call with STOREYS.
“I would love to present my case as it is, but I think it would be extremely imprudent of me when we are so close to a resolution,” says Stinson. “In the end, the proof in the pudding will be, are those projects completed? Is there a happy ending for all the investors? Was there any wrongdoing here? I know there was no wrongdoing; I disagree with the allegations.”
Stinson remains confident that a resolution is on the horizon and that the projects will be seen through to completion.
“All I can say is that we’re trying to resolve this so that the cloud is not hovering above everybody and we can focus on the projects at hand, which is what people invested in,” says Stinson. “They invested in me and they invested in the projects.”
Up in Flames
So, where did things go so south?
Stinson says that the pandemic and a massive fire at the hotel have created “the perfect storm” for the current situation. “I don’t even want to suggest anything else that will go wrong, because that will just jinx it, won’t it? It’s been a nightmare for the past few years,” he says.
New Year’s Eve was supposed to be the big grand opening of a new ballroom and other extensive renovations, says Stinson. But a massive arson-set fire saw the hotel up in flames the day before.
“The claim from the fire will be in the high eight-digits,” says Stinson. “This isn’t like someone set some laundry on fire in a bad corner. This is a seven-acre, 600,000-square-foot full-service convention hotel that’s been entirely shut down since December 30 with investors crawling all over it. This is a major disaster.”
Investigators are still in the process of determining the cause and the culprit behind the fire and the hotel is deemed a crime scene. “This was someone with a grudge and a bunch of loose screws upstairs,” says Stinson. “The parties involved took some time to make sure this fire happened.”
The plan is now to open to hotel guest rooms on March 14, with the event spaces functional by the summer.
“When you have a fire of that scale, you have to throw out everything in the hotel, even all of the linen, pillows, every piece of carpet,” says Stinson. “The stench is like cat pee; something you can’t get rid of. The whole place was completely gutted and cleaned. When the fire happened, the boilers went down, the sprinklers went off, and all of the electricity fried, so we couldn’t turn anything on. We need to put it back together piece by piece.”
Buffalo Grand Hotel (Stinson Properties)
While hotel renovations may have been made, the plans for the condo development have been halted. As the OSC document highlights, as of November, Stinson still didn’t have legal approval to convert the hotel into a condo development.
Stinson says there are many valid and completely unexpected reasons why the condo development didn’t materialize as planned. “In hindsight, we should have said, let’s focus on the hotel first,” admits Stinson. Aside from referencing the travel-halting pandemic and the fire, he won’t elaborate on the specifics on the condo front. Not yet.
“Right now, I am just focusing on a resolution and happy ending for everyone involved,” says Stinson. “Then we can think about the future and whether it involves a condo. I had to pull the plug on that whole thing when the pandemic came along.” He does reference land next to the hotel that could be used for condos.
In the meantime, he says he’s determined to vindicate himself and clear his once esteemed name.
“I am comfortable in my mind that I am focusing 100% on the investors’ interest and the resources and attention have been and will be on seeing these projects through to completion, then we can have coach’s corner, but now is not the right time,” says Stinson. “And I am obviously not hiding from anybody.”
Stinson says he’s made himself available to investors around the clock.
There will be a preliminary hearing regarding the allegations against Stinson on March 9, though he tells us he hopes to resolve the matter before this.
“I wish we had the opportunity to sit at the table and talk to those who brought forth the allegations. But here we are with silly and awkward Zoom meetings, where communication is lacking at best,” says Stinson. “There is a whole different perspective on this but this isn’t the time to be battling it out in public, because that can’t be done quickly. We don’t have the time.”
When the final story is told, Stinson says people will understand the background. “Right now the priority is bringing the project to the conclusion we all want,” he says.
As for that aforementioned juicy Netflix series, we’ll be waiting with popcorn.
The post Hamilton Developer Harry Stinson Speaks Out Against Alleged $19M Securities Violations appeared first on STOREYS.