For sale: ready-made town, just add money

Article from The Telegram - 21st Feb 08

tourism/development Corner Brook and Pasadena cautious about buying Humber Valley assets

Mayors of two west coast municipalities are interested in expanding their boundaries to include luxury chalets, buildings and land that made up the now-bankrupt Humber Valley Resort. Elected officials from Corner Brook and Pasadena say they want to provide services to the chalets, they're worried.

"We're very cautious," said Pasadena Mayor Bob Mercer. Pasadena has told the provincial government and a group of chalet owners the town would like to incorporate it into their boundaries, but not before upgrades.

"I would not, as a municipality, want to take over the system of roads down there," said Mercer. "What is the infrastructure that's in the ground? I don't know if the water system is adequate. The grades on the roads are excessive. We would never build them in our community. They're too steep. They go up and down, and up and down. In our view, it hasn't been well laid out and well planned to service long-term residents in these chalets."

Corner Brook Mayor Charles Pender also said his city is interested in taking it over, but, like Mercer, his enthusiasm was muted.

"We're cautious on this," Pender said. "We have the capability to do anything they need done there, but it all comes at a cost and that's going to be the crux of the matter. What is the reasonable cost of those services? Right now we left it in their court. We said we're interested and that we're here."

The area has 220 chalets and 80 partially built ones. All are privately owned. However, Ernst and Young - the trustees in the Humber Valley bankruptcy - have recently put up for sale the other major assets in the resort including a golf course, clubhouse, restaurant, administrative buildings, a bridge across the Humber River, roads and underground infrastructure.

It could take months for a buyer to close a deal.

"It's sort of up in the air right now. Until the bankruptcy gets cleared away, it's kind of hard," Pender said. Both he and Mercer said the ownership question needs to be answered before either town can reach a deal about providing municipal services like snow clearing, water and sewer and fire services. But make no mistake, they're interested. Both communities had long meetings in January with a group of chalet owners to make their pitch about what their towns could offer.

"We said that we're able to do it all and that's about all we've said, but they don't know what they're doing yet," said Pender.

Mercer believes the new owners would likely want to join a municipality, rather than incorporate themselves to look after everything. He said Pasadena is the logical choice because it is closer than Corner Brook to Humber Valley.

"We wouldn't go over there to make money," said Mercer. "That would be the wrong reason to go over there. Our concern is to bring the road infrastructure and the water lines up to an acceptable municipal standard and that's going to cost someone money, and the province has said it is not going to be them, so the only way to do it is from the taxes from the area. I think that people have come to accept that."

Mercer said complicating matters, however, is the fact almost all the chalet owners do not have Canadian citizenship and are not permanent residents of Newfoundland and Labrador.

"If they become part of our municipality, they would have no right to vote in our municipal election because only Newfoundland and Labrador citizens can vote in Newfoundland. So what does that mean? Taxation without representation. We know what happened in Boston with that."

The Telegram article