Church facing foreclosure after deal with Leduc condo developer

A south Edmonton church is facing foreclosure after lending millions of dollars to a developer with a lengthy legal history involving failed development projects and unpaid debts.

Court documents obtained by CBC News show Victory Christian Center sold its land at 11520 Ellerslie Road to a numbered company owned by Kevyn Frederick for $18 million. Frederick made an initial payment of $2.8 million but failed to make any subsequent payments. Frederick was also supposed to transfer some land in Leduc to the church but did not. He also subsequently convinced the church to take out a $2 million mortgage, on that Leduc property, to finance the troubled Bellavera Green Condo development in Leduc.

The documents claim Frederick failed to repay both the loan and the mortgage.

“The Ellerslie Road Lands are in foreclosure proceedings and it appears likely that Victory's operations on those lands will come to an end if the lands are sold in the foreclosure proceedings,” Clayton Reynar, an adviser to the church, states in an affidavit filed in court June 4.

“Victory owns no other buildings or facilities from which it can conduct its operations of the church, children's day care, and school.”

Developer accused of misleading church

A lawsuit filed against Frederick by the church claims that Frederick told Victory pastors Cal Switzer and BJ Brahmacharie he needed a $2.755-million loan to help him repay other money he already owed to Victory.

The loan was to finance the Bellavera condo complex, and pay off Frederick’s partner in the complex. Once that partner was paid out, Frederick promised he would be able to repay all the money he owed to Victory. In return, Victory would receive security in the condo project.

Frederick also convinced the church to take out a $2-million mortgage on the Leduc property, secured with its church property on Ellerslie Road. The lawsuit claims Frederick told the church the mortgage would help pay out his partner and he promised the mortgage would be paid back within a year.

Without first getting legal advice, Victory went ahead and loaned the money to Frederick and took out the mortgage.

The lawsuit claims Frederick knew his promises to Victory about the condo development and the mortgage were false.

Neither the loan nor the mortgage has been repaid and Victory has no security in the Bellavera condo complex.

Court documents show Frederick has admitted he owes the church $2.755 million dollars. But Lyle Brookes, the church’s lawyer, said they have no idea where Frederick is.

Both Switzer and Brahmacharie declined comment.

In a prepared statement, Brookes said, “Victory Christian Center Inc. is currently pursuing all remedies it can against Mr. Kevyn Frederick and his companies and does not want to make statements or do things that may jeopardize its ability to successfully do that.

“Despite the harm caused by Mr. Frederick, Victory Christian Center Inc. has plans in place that will allow it to continue to conduct its operations and serve its community.”

The allegations in the lawsuit have not been proven in court.

Checkered business and financial history

Kevyn Frederick, also known as Kevin Frederick, Kevyn Sheldon Frederick, Kevin Ronald Frederick and several other aliases, is a businessman with a checkered financial past.

Frederick once operated his multi-million dollar business out of a rented mailbox at a Whyte Avenue UPS store.

Most recently, Frederick made headlines after the city of Leduc issued evacuation orders to dozens of Bellavera Green condo owners after the building was condemned over numerous safety and fire code violations. Documents show Frederick took over Bellavera Green from builder Ram Singh.

But Singh claims his name was forged on land-transfer documents. Singh claimed he had no intention of transferring title to Frederick and his partners until they paid him $10 million.

The building was eventually taken over by a receiver appointed by the court on behalf of creditors. The building has been repaired and most tenants were able to stay in their condos.

In 2010, he borrowed more than $32 million to buy the iconic Chateau Lacombe hotel, now the Crowne Plaza, in downtown Edmonton. By November 2011, the hotel fell into receivership with Frederick owing the entire amount, plus nearly $9,000 a day in interest.

Court documents show Frederick is also being sued by owners of a Fort McMurray condo complex after their reserve fund went missing.

The lawsuit accuses Frederick of “embezzlement, unauthorized misappropriation and secret misdirection of $268,000.”

Frederick borrowed nearly $1.7 million from an Edmonton bank to develop the building, but defaulted on the loan, leaving the condo in receivership.