From Boom to Bust: Richmond’s $726 Million PRC-Linked Project Turns Into a Legal Battleground

RICHMOND, B.C. — Amid a sharp downturn in condominium sales to foreign investors in British Columbia, one of Canada’s largest private mortgage lenders is facing a reckoning over a stalled megaproject in Richmond. The unfinished project — and the years of litigation surrounding it — speaks to the aftermath of Canada’s housing boom and the collateral damage that could still follow, even as home prices remain far beyond the reach of younger generations in the nation’s largest cities.

Romspen Investment Corporation, known for extending risky construction loans when traditional banks retreat, pulled back from financing a seven-tower complex called Atmosphere. The $726-million development, covering nearly an entire city block, promised more than 800 homes and new office space. A significant portion of the project was tied to Global Education Communities Corp. (GECC), a Vancouver conglomerate valued at more than $1 billion, built on providing schooling and accommodation to international students, mostly from China.

Richmond has long been synonymous with major flows of Chinese capital and foreign property ownership, a nexus of speculative finance and demographic change that made it ground zero for B.C.’s real estate boom. Developers announced Atmosphere in 2017, at the height of that surge. The following year, GECC — a private college and student-housing conglomerate with “a portfolio and development budget of over $1 billion” serving some 14,000 students in Vancouver — pre-purchased two towers and office space in the project.

GECC’s purchase, valued at more than $100 million, was secured with a $60 million deposit. The company, whose model blends language schools with real estate, has built its brand on recruiting international students and housing them in GEC-branded apartments across Metro Vancouver.

Romspen formally entered the deal in 2019. In a 2024 ruling, a B.C. judge described its business model bluntly: Romspen was known as a “10 and 2 lender” — shorthand for its higher-risk tolerance and terms of 10 percent interest plus a 2 percent fee, compared with the “5.5 and 1” rates offered by conventional institutional lenders.

The Toronto mortgage lender advanced $90 million in loans while arranging a $422-million construction facility. Its own commitment was $212 million, with the rest to be syndicated to other lenders. The developers agreed to pay 10 percent annual interest and a $10.5-million lender’s fee, half of which was paid upfront. According to the 2024 Supreme Court of British Columbia ruling in Romspen’s favor — later overturned on appeal — the judge noted that in hearings, GECC’s principal “would not acknowledge that he knew that the Developers were having financial difficulties in the fall of 2019 despite having used those exact words in his discovery.”

By the spring of 2020, Romspen had advanced $143 million but abruptly cut off further funding, citing its failure to bring other lenders into the syndicate. Excavation had just been completed, leaving what filings later described as “an excavated and shored hole in the ground.” With Romspen gone, the developers failed to find replacement financing, and by mid-2022 the project was under creditor protection.

The collapse triggered three lawsuits. Romspen sued the developers and guarantors in 2023 for outstanding debt, which was accruing interest at $1.5 million per month. The developers countersued for breach of contract. GECC launched its own action, alleging the lender had also breached its obligations.

In August 2024, the Supreme Court sided with Romspen, ruling that the lender had not breached the loan agreement when it cut off funding because it had been unable to syndicate the loan. The developers were found in breach for failing to repay amounts already advanced, while GECC’s claim was dismissed. For Romspen, it looked like a decisive victory.

But on September 22, 2025, the B.C. Court of Appeal largely overturned that ruling. The justices found Romspen had breached the loan agreement when it refused to fund further advances beyond March 31, 2020. They sent the matter back to trial for an assessment of damages, while noting Romspen could still argue it had grounds to halt funding on other contractual conditions.

For GECC, the appeal decision was a “partial victory.” “The developer, backed by a Toronto-based lender, faced financing issues during the COVID-19 pandemic, causing project delays and financial loss,” GECC said in a statement.

The Atmosphere dispute, however, points to more than one troubled development. It highlights the unrealized stresses and fragility in Canada’s property market after a decade-long bubble fueled significantly by foreign capital.

The project’s fate exposes the risks of a system where private lenders, speculative developers, and international student housing operators are intertwined. And it raises the question of how Prime Minister Mark Carney’s government — which has promised a massive housing build-out to increase supply and bring prices back in line with Canadian incomes — will be received in a market still dotted with unfinished projects and distorted by years of foreign-driven housing demand.