The principal behind the controversial James Street Baptist Church development has had three associated companies go bankrupt and two others placed into receivership since 2011.

Bankruptcy filings show that the three bankrupt companies associated with Louie Santaguida had combined liabilities of nearly $21.5 million against combined assets of just $56, and a commercial credit specialist stated in a 2012 court affidavit that the books for one of the bankrupt companies were in "complete disarray."

United States court documents also show that one of Santaguida's American-based companies had been found liable in seven separate court judgments totalling $162,000 for unpaid employee benefits or unpaid subcontracted services.

A numbered company associated with Santaguida purchased the vacant church in June 2013. He has indicated he plans to turn the site into an $80-million 30-storey mixed-use development that will incorporate part of the church's facade, although no formal proposal has yet been presented to the city.

Three of the four sides of the 135-year-old church have already been demolished, leaving just the portion that fronts James Street South standing.

The demolition of the building — described as "crumbling" by some — sparked an outcry in the church's Durand neighbourhood.

A heritage subcommittee had approved the demolition permit, and it had been authorized by a senior staff member under a clause allowing "minor alterations." But the issue hadn't come before the full heritage committee or council.

The revelation of recent financial difficulties for five companies associated with Santaguida raises concerns for the president of the Durand Neighbourhood Association about the viability of the James Street Baptist Church project.

"Five companies? Of course it causes great concern," said Janice Brown, the association's president. "We think that nothing will happen at this site.

"When can we expect to see a proposal for this property? That's the big question," Brown added. "I'm not sure we'll ever see anything."

In an interview with the Spectator, Santaguida said the bankruptcies and receiverships were related to problems that developed during the economic recession that started in 2008. The bankrupt companies were owed millions of dollars by clients facing their own financial problems, according to Santaguida.

"The bankruptcies are unrelated to real estate," said Santaguida. "They don't cross over at all.

"Secondly, these projects (such as James Street Baptist Church) are very well-heeled, well-financed," he added. "If you look at the Baptist church today, I've put money on the table to get things done without debt.

"They're totally well-capitalized."

Ward 2 Councillor Jason Farr said he is optimistic about the project.

"There have been no red flags or concerns thus far," Farr stated in a written response to the Spectator, "given that the appropriate measures taken by our staff have followed proper policy and procedures as is it relates to this development proposal, coupled with the owner meeting all city requests which included fees associated with the project and conditions as it relates to the building alteration.

"It's not surprising that there are polar and passionate views on this significant property in our city."

Farr stated that steps are being taken to finalize a formal site plan for the James Street site.

"The project design team has been working with city staff to develop and revise the plans in advance of making a formal site plan application," Farr noted.

"This is not unusual," he added. "By having early pre-submission meetings, potential issues can be resolved early in the process which will ultimately reduce the amount of time required between the site plan application and final approvals for building permits."

Santaguida said his company and the city are moving "as fast as we can" with the project.

"I can tell you that we are definitely moving forward, working very closely with the City of Hamilton basically on a daily basis moving the project forward," Santaguida said.

"I appreciate everybody thinks that we skip processes but it's the furthest thing from the truth."

A Spectator examination of bankruptcy, receivership and court documents shows that:

• On April 4, 2011, three companies associated with Santaguida filed for bankruptcy — Terrasan Environmental Solutions Inc., WCL Management Limited and Terrasan Metal Fabricators.

Terrasan Environmental was a remedial demolition company, WCL was an equipment company and Terrasan Metal Fabricators made iron-related products such as railings and stairs.

Based on court documents and bankruptcy filings, Santaguida signed as chief executive officer and director of the corporations. Santaguida said he was the owner of Terrasan Environmental but not the other two companies.

Bankruptcy filings show Terrasan Environmental Solutions Inc. had liabilities of $9.54 million and assets of $27, WCL Management had liabilities of $6.4 million and assets of $17, and Terrasan Metal Fabricators had liabilities of $5.56 million and assets of $12.

The Terrasan bankruptcies in April 2011 cost Santaguida a chance at a proposed $200-million project in Brantford.

In May 2011, Brantford councillors walked away from a two-year-long negotiation with the Terrasan parent company to remediate and redevelop a 21-hectare contaminated brownfield site after discovering that three of Terrasan's subsidiaries had gone bankrupt without council's knowledge.

"Under no circumstances would I ever go into business with this company after all that has happened," Brantford mayor Chris Friel said at the time when his city abandoned the negotiation.

"It's not a secret I was really quite disappointed with the outcome of council's decision because three and a half years later, nothing's happened on the project, literally," Santaguida said in reference to Brantford's decision.

In an interview with the Spectator, Friel strongly disputed Santaguida's statement.

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The contaminated site has been cleared and the first development project is ready to start, Friel said.

He also said he stands by council's decision to part ways with Santaguida in 2011.

"I think it was for the best for the community as a whole," Friel said.

In January 2012, a judge forced one of Santaguida's numbered companies, 2197333 Ontario Inc., into receivership over the objections of Santaguida. The numbered company owned a property on Oakdale Road in Toronto that was in default on a mortgage worth $2.5 million owed to the Business Development Bank of Canada.

Santaguida is the only officer and director listed in the corporation registry for 2197333 Ontario Inc. A spokesperson for the court-appointed receiver stated that Santaguida was the owner of the company but Santaguida said in an interview he wasn't the owner.

The receiver sold the Oakdale Road property in October 2012 and the case has been closed.

In July 2012, a Toronto judge placed another of Santaguida's numbered companies, 2089845 Ontario Inc., into receivership, once again over the objections of Santaguida. The numbered company was in default on a loan of nearly $3 million owed to the Meridian Credit Union based in St. Catharines.

The numbered company and the credit union have launched lawsuits against each other that are still before the court.

In a separate court application seeking the appointment of a receiver, Meridian stated that the numbered company had neglected to maintain insurance on the property and that Meridian had "attempted to appoint an agent to take peaceful possession of the property ... but the company has refused to provide peaceful possession."

In one court affidavit, Robert Sutter, a commercial credit specialist at Meridian, stated that the credit union would have never lent more money to one of Santaguida's companies had the true financial state of it been known and that the company's books "were in complete disarray."

Sutter said he was unable to comment further when contacted.

Santaguida disputed Sutter's sworn statement.

"Our books were meticulous and they were basically kept up to industry standards," said Santaguida.

Between November 2010 and August 2012, an American subsidiary of Terrasan Environmental Solutions was found liable on five separate occasions for failing to pay employee benefits in the state of New Jersey. The company was ordered to pay a total of almost $32,500.

In March 2011, the American Terresan Environmental subsidiary was ordered to pay $45,500 by a Pennsylvania court for failing to make employee benefit payments.

In July 2012, the American Terrasan subsidiary was ordered by a New York court to pay $84,000 to another company for unpaid subcontracting services.

Santaguida said he was unaware of the U.S. court judgments until contacted by the Spectator, "and I've basically been following up with our legal team," he added.

Santaguida said he was a director but not the owner of the U.S.-based Terrasan company, which he claims has been inactive for nearly three years.

The James Street Baptist Church property was purchased by 2203284 Ontario Inc., a numbered company associated with Santaguida, for $610,000 on June 4, 2013, just over half of what had been reported as the asking price for the historical structure in the heart of the downtown.

A week later, the numbered company took out a $1.5 million mortgage on the property. The money was loaned to the company by Santaguida's spouse.

"I can tell you I'm probably one of the most excited people to see the church being redeveloped," said Santaguida.

"It's really going to revitalize the downtown core."