CALGARY, Alberta–(BUSINESS WIRE)–Westphalia Dev. Corp. (the “Corporation”) announced today its results for the fiscal year and fourth quarter ended December 31, 2021. Launched in March 2012, the Corporation acquired for development the 310-acre Westphalia Property (the “Property or the “Project”) located in Prince George’s County, Maryland, United States.
Review of Operations
The Corporation continues to actively seek purchasers and developers for the remaining lands associated with Phases 2 and 3 as well as other more immediate opportunities associated with the Phase 1 retail lands. The key activities undertaken by the Corporation during the year ended December 31, 2021, were as follows:
- Continued construction on the Woodyard Road Interchange project. Construction is on schedule and expected to be completed in September 2022.
- The Presidential Parkway East project is substantially complete pending paving of the final top coat; final surveys are being prepared.
- Continued construction on the Presidential Parkway West project, which is expected to be completed by Q3 2022.
Sales Activities & Financing
- The Corporation amended the purchase and sale agreement to increase the purchase price for the commercial/industrial land in Phases 2 and 3 of the Project.
- A purchase and sale agreement expired in accordance with its terms on the residential for sale sites. The Corporation is in discussions with the same buyer regarding a potential alternative agreement pursuant to which that buyer would purchase fully engineered fee simple lots in lieu of raw land for condominium development. The Corporation will also take this out to market and discuss the opportunity with other builders.
The single-family market in the Washington, D.C. metropolitan statistical area, and specifically in the Prince George’s County submarket, continues to show strength which has led to increased builders’ interest in purchasing raw land for the development and construction of their own lots.
Management continues to focus on strategies to maximize the returns of the Project, which include, but are not limited to:
- Subsequent to year end, on April 1, 2022, the Corporation renegotiated its senior debt with its existing lender, WWMN, LLC. The Corporation has also begun reaching out to a third-party bank for an additional short-term loan.
- The Corporation is working to advance the planning of its current Phase 1 retail lands which are being considered on a for sale basis or a vertical joint venture basis. There are three sites in which a vertical strategy is being pursued to work with national or regional retail commercial and senior living builders. The Corporation is evaluating options for consultants to be engaged for this strategy and is seeking partners to build and lease out the two commercial sites and the senior living site.
- The Corporation continues to work with the local community, County leadership, and internal staff to re-plan additional development within the Westphalia Town Center. The Corporation also continues to work with the various consultants to implement a shift in the project’s scope after having received input from those detailed above.
Fourth Quarter and Year End Financial Results
The Corporation did not recognize any revenue in the fourth quarter of 2021. During the year ended December 31, 2021, the Corporation recognized revenue on contracts of $nil (2020 – $18,868,800). The cost of sales relating to the lot sales was $nil (2020 – $18,716,794), including selling costs and commissions. Cost of sales for the year ended December 31, 2021, included impairments on land development inventory of $nil (2020 – $2,469,865). Revenue and cost of sales recognized for the year ended December 31, 2020, was in respect to the sale of 18 Phase 1 single family lots to home builders and the Phase 1A bulk land sale to Galaxy NC, LLC.
For the year ended December 31, 2021, the Corporation generated a comprehensive loss of $1,917,091. When compared to the year ended December 31, 2020, total comprehensive loss of $3,419,241, there is a variance of $1,502,150 between the respective period ends. The variance is largely due to an impairment of $ 2,469,865 recognized during the year ended December 31, 2020. The breakdown of the comprehensive loss generated is detailed in the Management Discussion & Analysis.
The Corporation is managed by Walton Global Investments Ltd. and the development of the project is managed by Walton Development & Management (USA), Inc., both of which are members of Walton.
Walton is a privately owned, leading global real estate investment, land asset management and administration group that has focused on strategically located land in major growth corridors for more than 43 years. Walton manages and administers US$3.4 billion of real estate assets in North America on behalf of its investors and business partners. Walton has more than 98,000 acres of land under ownership, management and administration in the United States and Canada. Key entities in Walton include Walton Global Holdings, LLC, Walton International Group and Walton Development & Management (USA), Inc. For more information visit Walton.com.
This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. Forward-looking information is based on the current expectations, estimates and projections of the Corporation at the time the statements are made. They involve a number of known and unknown risks and uncertainties which would cause actual results or events to differ materially from those presently anticipated. The risks, uncertainties and other factors that could cause the Corporation’s actual results and performance in future periods to differ materially from the forward looking information contained in this news release include, among other things, the development of Westphalia Town Center, general economic and market factors, including interest rates, a decline in the real estate market, changes in government policies and regulations or in tax laws, changes in municipal planning strategies and whether certain development approvals are obtained and changes in the Canadian/U.S. dollar exchange rate, in addition to those factors discussed or referenced in documents filed with Canadian securities regulatory authorities and available online at www.sedar.com.
Except as otherwise noted, all amounts are in Canadian dollars, and are based on unaudited condensed interim consolidated financial statements for the three months ended December 31, 2021, and related notes, prepared in accordance with International Financial Reporting Standards.