The Malek brothers made a place in history in Vancouver after their Olympic village development ran head-on into a financial crisis during the world economic meltdown, which forced the city first to bail them out, then take over their near-$1-billion loan.
Just over a year ago, the village was placed into receivership. In the early days of the development deal, the Maleks had pledged every asset associated with their company, Millennium Development, as security. The city, trying to minimize what some fear could be a $200-million loss on the village, seized every asset that it could find from the company.
The Globe has learned Peter and Shahram Malek, through new companies incorporated last fall, have bought a major piece of property on East Hastings for $4.9-million, an area that is mostly zoned industrial, but has seen some gentrification lately.
The property, a former Morrey Mazda car lot near the recently renovated Waldorf Hotel, was listed by the real estate firm Avison Young for $5.9-million.
Some developers have previously looked at it and decided to take a pass because they were not sure they could get the necessary rezoning for the land, which is classified as mixed commercial and industrial.
According to corporate-registry documents, the Maleks created two new companies, WH Commercial Corp. and Woodland Hastings Development Corp., in October and November.
Those companies are listed as co-owners of the property bought on Dec. 12.
Land-title documents list their mortgages as being held by the Royal Bank and Realtech Capital Group, a well-established company in Vancouver that promotes itself as one that "specializes in the financing of multi-family apartment buildings."
The city's planning office has received a preliminary inquiry about the property, but nothing official.
Shahram Malek declined to comment on the purchase or the companies' plans for the property.
Sources say senior city officials found news of the purchase disturbing. They plan to review it carefully to see if there is any sign that the Maleks did not comply with their agreement to turn over all of the assets they had pledged as security for the city's Olympic-village loan.
In April, the city announced it had taken over 32 properties owned by the Maleks, with a net value of $45-million.
That was far less than city officials had been told over the previous three years that the Maleks' pledged assets were worth when they were used to guarantee city loans.
In spite of that financial mess, an experienced development consultant in the city said it is good news that the Maleks are back on their feet.
Gordon Harris, president of the Simon Fraser University Community Trust developing the UniverCity residential area on Burnaby Mountain, said the Maleks have developed many exceptional projects throughout the Lower Mainland, including at SFU.
"Because one project didn't go well, the Olympic village, we shouldn't condemn them or banish them. They do very good-quality work and they should be allowed to continue with what they do well."
The area near the Hastings and Clark intersection where the Maleks have bought land, once mostly industrial and run down, has been showing signs of new development life recently.
The developer PCI Group has bought the old Canadian Tire store on the next block from the Maleks' site and is planning a commercial development with a small amount of residential.
Wall Financial, which builds mostly condos, has bought a property on the north side where the zoning allows some residential.