Historicist: Depression Skyscraper Debacle
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Historicist: Depression Skyscraper Debacle

Every Saturday at noon, Historicist looks back at the events, places, and characters—good and bad—that have shaped Toronto into the city we know today.

Full page of advertorials on the Park Plaza Hotel from the Globe, July 10, 1936.

On July 10, 1936, a full page of articles and ads in the Toronto Globe celebrated the opening of the Park Plaza Hotel (now the Park Hyatt South) at the corner of Bloor West and Avenue, which contained a mix of hotel rooms, apartments, and thirty thousand square feet of office space accessible by a separate elevator. Decorated by the world-famous W. and J. Sloane Company, the tasteful interior design self-consciously sought to emulate the “well-bred atmosphere of sophisticated New York.” The furniture was ultra-modern. Service promised to be second-to-none because general manager Charles V. Delahunt demanded rigid qualifications from prospective staff, many of whom were drawn from fine hotels across North America and Europe.
Retail and a moderately priced luncheonette at street level would draw in the neighourhood lunch crowd, but the richly furnished main dining room promised exclusivity and sophistication. Enreco Del Greco’s in-house orchestra encouraged dancing here or under the stars in the rooftop garden restaurant. Originally reserved solely for guests and residents—but advertised to the general public by the next year—the rooftop garden offered an unrivalled view of the city. Peter Gzowski would later write: “From the roof of my favourite hotel, with the bright lights blinking, and the traffic’s hum, and the pretty girls and the bright young men behind the glassed-in bar, it’s a pleasant place to contemplate.” One of the only towers on the fringe of the city core, the Park Plaza emphasized its location away from the dust and noise of the city. “Even from the lower floors,” a July 10, 1936, advertorial in the Globe proclaimed, “one may gaze out upon a charming panorama of broad streets and residential blocks studded with trees. Quite a bit more restful than the picture of grey office buildings, parking lots and stores that greets the eye of the guest at a window of most modern hotels.”
“Designed for a discriminating patronage, the Park Plaza…incorporated in its comfortable, livable” apartments and guest rooms—which started at three dollars per night—both elegant design and cutting edge technology. Some of the nearly two hundred apartments, available as studios or with two, three, or more bedrooms, were furnished; others were not. Each came equipped with a metal kitchenette outfitted with an electric fridge and—as one advertisement specified—General Electric’s “Hotpoint Automatic Hi-Speed Range.” The hotel was fully air conditioned throughout its dining rooms and public common areas.
Such an emphasis on luxury and newness seemed out of place in the Depression, as if the hotel’s publicity department was over-compensating to hide the fact that the building had been a ghost on the skyline. From 1929 to 1936, it had stood vacant, unfinished, and without windows.

Photo of the Hyatt Park South by -Astin- from the Torontoist Flickr Pool.

With fourteen skyscrapers erected between 1922 and 1928, the Toronto skyline was being transformed in the 1920s. And the downtown core crept steadily northward with insurance buildings sprouting up in midtown on Bloor Street East, the new Ontario Hydro headquarters at College and University (now Princess Margaret Hospital), and the Whitney Block on Queen’s Park Crescent. Of the aspirations of this era in Toronto, historian James Lemon wrote: “Expansion upward, though modest at first, was soon running neck-and-neck with the mania for speculative stock gains.”
At the corner of Bloor West and Avenue, another hopeful symbol of the era’s aspirations took shape as the steel work for the Queen’s Park Plaza Hotel was completed in 1928. One hundred workmen of the J.W. Butler Company of Canada had used 1,490 tons of steel to stretch the grand hotel seventeen storeys into the sky, according to architect Hugh G. Holman’s design.
Holman had trained as an architect in his hometown of Stratford before heading west to Manitoba in 1900, where he worked with a variety of firms and the provincial government before setting up an individual practice. He designed houses, warehouses, and churches in Winnipeg and rural Manitoba until serving overseas in the Great War. After a stint in Stratford, he established a practice in Toronto in 1922 to design schools and some small-scale commercial buildings. Being hired for the Queen’s Park Plaza Hotel—as the project was originally named—was the most important commission of his career. According to Robert G. Hill in the Dictionary of Architects in Canada, Holman originally envisioned the hotel as “as a flamboyant high rise chateau with a mansard roof.” With a stone front up to the third floor, the rest of the facade was to be buff-faced brick—with the exceptions being the stone fronting of the twelfth floor and stone detailing.

Queen’s Park Crescent, looking north to Bloor, with the Royal Ontario Museum and Park Plaza Hotel in view, circa 1933. City of Toronto Archives, Fonds 1244, Item 7360.

With work progressing at a steady clip, the building was expected to be ready by February 1929. But the Depression hit. For lack of money, the work site was abandoned in the early summer of 1929. Although the exterior was largely completed, little had been done on the interior, which still awaited the heavy-duty work of plastering, hooking up the plumbing and heating systems, installing marble trim, ornamental grill-work, and interior detailing, as well as completing the marble lobby.
June 1930 meetings of the bondholders fuelled optimistic speculation that the building’s completion might be financed as an office tower, rather than a hotel. But by December 1930, the property was in receivership, under the oversight of the London and Western Trust Company. The idle hotel project would play a part, according to a December 28, 1934, Star article, in the bankruptcy of not only the Queen’s Park Plaza Company and the J.W. Butler construction firm, but also the United Bond Company and the U.S. Mortgage Bond Company, two companies that tried to raise additional capital through the issuing of real-estate mortgage bonds.

United Bond Company advertisement from The Globe, February 14, 1929.

Based solely on newspaper coverage of the day, it’s difficult to come to a complete picture of precisely what happened with the Park Plaza. But the hotel’s failure had ripple effects felt across the city’s construction industry. In the 1920s, a great number of North American large commercial or multiple-unit dwelling developments were financed through the sale of real estate mortgage bonds. Therefore the Queen’s Park Plaza Company engaged the United Bond Company to sell 6.5% first mortgage bonds to raise the capital required for the hotel’s construction.
For the buying public—who had grown accustomed to the safe return on bonds during the Great War—real estate mortgage bonds became an increasingly popular investment. Writing in the Canadian Banker in October 1927, W.M. Langton noted that real-estate mortgage bonds were “really only a large mortgage cut into strips,” but they appeared to offer the small-time investor the appearance of comparatively high annual interest yield. Furthermore these securities appeared to be a sound investment because bond-selling houses usually guaranteed the annual interest and promised to buy bonds back from the original bondholders at any time. Such guarantees meant little, Langton noted, since “it [was] impossible for the average man to obtain very clear information as to the security behind the obligation.” Some of them, Langton argued, relied on “reckless appraisals” of overvalued property or contemplated buildings.
The United Bond Company’s 1929 newspaper advertisements emphasized the Queen’s Park Plaza’s “sound, high, income-earning possibilities” and called it “a safe, dependable investment, well recommended.” The first issue of bonds had a total value of $875,000; but, of this, the company only sold $810,000 worth. By late December 1930, the United Bond Company was at Osgoode Hall before its creditors—including the Queen’s Park Plaza Company, with a claim of $93,000 owed, and the Royal Bank. The company’s statement of affairs, the Star reported on December 23, 1930, showed “it had liabilities of $175,046 against assets of $45,930 or a deficiency of $129,115 and [that] contingent liabilities might make it worse.”

Park Plaza Hotel advertisement from The Globe, August 5, 1936.

Out of funds, the construction of the Queen’s Park Plaza was abandoned. Suppliers and subcontractors went unpaid and some filed liens—a passive right to secure payment of outstanding debts from a property or building (but not the right to sell it). By late 1931, the Queen’s Park Plaza was the subject of a protracted courtroom dispute that pitted first mortgage holders—the bondholders trying to secure some return on their investment—and lienholders seeking payment for work commenced or material supplied to the project.
In a decision that ran counter to common practice, on November 23, 1931, the appeals court gave preference to certain mechanics’ liens over the mortgage that had secured a bond issue. Previously, in common practice, mortgage companies would give loans with periodic advances, the last of which would come upon completion. Developers therefore commonly relied on credit with some suppliers and sub-contractors until outstanding invoices were settled upon the building’s completion. “It was generally understood by the profession,” a leading lawyer told the Star on December 4, 1931, “that provided the first mortgage holder searched the registry office at regular intervals and assured himself that no liens had been filed on the property nor had he been served with written notice by the lien claimant, he was…protected on his loan to the full value of the property and improvements.”
By greatly weakening the security of first mortgage holders, the president of the Toronto Home Builders Association, W.E. Maybee, argued that the court decision made it more difficult for builders to obtain a loan and worried that it would impact the employment situation.
Within weeks, a crisis erupted in the construction industry. Loan companies turned off the tap of building loans for fear such loans were jeopardized by unknown but outstanding liens. They withheld advancing mortgage payments to builders except where the thirty-day window for filing a lien had passed, the builder could demonstrate that all outstanding bills had been settled, or waivers were obtained from suppliers attesting that no liens would be filed. In just seven working days, however, 101 mechanics liens were filed with the city registry office—three times the normal rate—according to the Star on December 18, 1931.
Emergency meetings of the Toronto Home Builders Association and the Lumbermen’s Credit Bureau, attended by developers and representatives of the builders supply trades, members of the Toronto Real Estate Board, city councillors, and loan company officials called for provincial government intervention to solve the impasse. The County of York Law Association also called upon the legislature to amend the Mechanics’ Lien Act.

Park Plaza Hotel advertisement from the Toronto Star, May 20, 1936.

As the legislature debated measures to rectify the situation, the bondholders of the Queen’s Park Plaza sought ways to reboot their project. Starting in February 1932, the London and Western Trusts Company sought tenders for the purchase of the Queen’s Park Plaza Company and entertained tentative negotiations with several parties without coming to any definitive conclusion on the building’s sale of the financing of its completion. Meanwhile, a group of bondholders—the Queen’s Park Plaza bondholders’ association, led by president I.E. Weldon—were acting independently to try and raise a hundred thousand dollars to secure title to the building from the trustee, so that the bondholders themselves might find a better offer on its sale and a better return on their initial investment.
In mid-January, six years since work had stopped, newspaper rumours finally came to fruition. The London and Western Trusts Company sold the building to the Park Plaza Company, a group of investors including Harry Rotenberg of Yolles and Rotenberg, a development firm that had built some of the city’s prominent skyscrapers. Rotenberg had secured half a million dollars in backing for the transaction on a recent trip to England. He told the Star on August 23, 1935: “Before we came to a decision to embark on this extensive undertaking [to put the building into useful operation] we made a most careful survey of the building and found that despite the years it has been standing in an unfinished state it is in first-class condition and can be proceeded with immediately without any special attention due to the effects of either wind or weather.”
Architect Morrow Oxley of Chapman and Oxley was brought in to finish the building, now renamed simply the Park Plaza Hotel. He made some interior modifications to the original design, including subdividing Holman’s enormous main dining and ballroom into a number of smaller and more secluded dining rooms. Starting in August 1935, workmen toiled on through the winter until the hotel’s official opening at noon on July 11, 1936.
The posh hotel quickly ingratiated itself with the city’s socialites, becoming known as a “sedate” and “very exclusive,” in the words of the Globe‘s social columnist, Roly Young. Prime ministers were frequent guests. And its elegant restaurants were popular venues for business dealings or meetings with international visitors. “[I]t has always seemed to me to have great dignity,” Gzowski wrote. “Ladies with blue hair live here, sometimes with their maids, and men with colonel’s moustaches and two-hundred-dollar overcoats stride purposefully through its lobbies.”

View from the top of the Hyatt Park South by Danielle Scott from the Torontoist Flickr Pool.

As Yorkville’s demography changed in the 1960s and 1970s, the Park Plaza rooftop patio became a popular gathering place for the neighbourhood’s literary types, including June Callwood, Peter Gzowski, and Margaret Atwood. Atwood included the rooftop patio as a setting in her novels The Edible Woman (1969) and Cat’s Eye (1989). “We sit on the outside patio,” Elaine, the main character of Cat’s Eye, narrates, “drinking Manhattans and looking over the stone balustrade….This is one of the tallest buildings around. Below us Toronto festers in the evening heat, the trees spreading like worn moss, the lake zinc in the distance.”
Although the Park Plaza was never the city’s oldest, grandest, or most expensive hotel, Peter Gzowski, who was born in the neighbourhood at about the same time it was under construction, always considered it his favourite of the city’s hotels, and he presented it as a microcosm of the city’s mid-century transformation. “After the second war when Toronto began again to swirl with prosperity,” he wrote of the Park Plaza, “it survived on the carriage trade and in the 1950s, with Toronto one of the fastest-growing cities in the world, it added a sweeping new wing with displays for boutiques, a new intimate cocktail bar and a new grand restaurant. It has come of age with the city.” An additional tower, designed by architect Peter Dickinson, was added to the north, an early example of modernist architecture in Toronto.
Gzowski concluded: “My hotel is like Toronto, you see. It is dignified and calm and pleasant. But it is also changing, becoming alive, sometimes scandalous, and the people who are changing it are part of a whole new breed.”
Additional sources consulted: Peter Gzowski, “Growing Up With Toronto,” in William Kilbourn, ed., The Toronto Book (Macmillan, 1976);
James Lemon,
Toronto Since 1918: An Illustrated History (James Lorimer & Company, 1985); and Guylaine Spencer, “The Allure of Atwood’s Toronto,” in Americas (Vol 57, Issue 6) November/December 2005.