Tuesday, March 10, 2009

ARTICLE: Group has bid for resort assets

Article on Western Star (Corner Brook) by Gary Kean

A management group led by a chalet owner has confirmed it has made a bid to buy Humber Valley Resort’s assets.

The deadline for the tender call for the bankrupt resort’s properties — including the golf course, restaurants, land and other holdings — closed Friday, and the resort’s trustee in bankruptcy now has until March 16 to decide what to do with the bids. The trustee, Ernst and Young, won’t say how many bids have been received, but a bid has been made by a group led by Brian Dobbin, the man who founded the resort that went into bankruptcy in December.

At least one other bid has also been made. A management group that includes Mike Ward and some other owners, in a prepared statement to The Western Star Tuesday, said its plan recognizes the “misguided focus” and the problems of the previous management teams, and knows what is needed to turn the resort around.

Previous plan failed

The previous failed business model of selling land at high prices, said Ward, clearly hasn’t worked and any plan with that as its short-term model will also fail. Ward said an operation which welcomes incorporating local residents is crucial. That would include less expensive green fees and special discounts for locals on the resort’s golf course, he said.

Even in the early days of his investment, Ward said he took exception to the fact there was no hotel in the resort’s plans, noting that is a common, central element to almost any other resort he’s been to around the world. He even disclosed his group has met with a major hotel chain he expects will set up shop at the resort if his group’s bid is successful.

Last fall, hotel chain Marriott told The Western Star it was “interested” in the Humber Valley, but would not confirm if anything was in the works.

Dobbin’s original plan included expanding far beyond the resort’s current footprint with more chalets and another 18-hole golf course. In a letter to the owners last week, Dobbin said the provincial government is still willing to discuss leasing that expansion land back to the successful bidder.

The expansion property was taken back by the province before the resort went bankrupt because the resort had not paid the annual rental fee on the land and had also not lived up to other conditions stipulated in the lease.

The owners’ group, however, plans to take things much slower.

“Building more properties in the expansion land is clearly not a focus in the short term, however there are several plots of land on the edges of the development which have no access,” said Ward. “Clearly, something would have to be done to bring them services and accessibility.”

When asked to comment on the situation at the resort, Tourism, Culture and Recreation Minister Clyde Jackman deferred to Justice Minister Tom Marshall, who represents the Humber East district where the resort is located.

Marshall would not comment on the specific bids, but did say the province was willing to enter negotiations with the successful bidder about the Crown lands the resort had wanted to expand into.

“People are entitled to apply for Crown land, but that’s not to say they would get that land,” said Marshall.

Ward did not want to comment about any others bidding for the resort’s assets, but did say the majority of chalet owners do not want those responsible for Humber Valley Resort’s downfall to be involved again.

“Their credibility has been ruined and the history will make it hard for them to be trusted again,” he said. “This would be a disaster and I’m not sure where it would lead — they should not be allowed to bid without an investigation into the dealings at the resort. Sometimes you have to just look at the bigger picture and do what is best for the resort and the local community. This might mean withdrawing from the process and wishing another bid the best of success — it takes somebody who is magnanimous to do this.”

Ward said the previous management teams don’t seem to accept responsibility for the consequences of the resort’s downfall. The owners left in the wake of the bankruptcy, he added, and now want to control their own destiny when it comes to the operation’s future.

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