The sale of Hecla Resort to Lakeview Hotels has been conditionally approved by a Manitoba court.
Court of Queen's Bench Justice Robert Dewar released his decision on Tuesday, opening the way for the mothballed facility to be opened once again.
The deal is still subject to negotiations between the Manitoba government and Winnipeg-based Lakeview on several items, including a lease price for the land and the granting of a licence to operate video lottery terminals (VLTs) at the resort.
The offer from Lakeview, made late last week, is less than the original listing price of $ 6.5 million but the price has been sealed until Lakeview and the government reach an agreement.
The resort has been in bankruptcy since 2010 and the Business Development Bank of Canada and the Province of Manitoba are the two biggest creditors, owed millions for the original redevelopment of Hecla.
The resort and an 18-hole golf course were originally built by the province on Hecla Island in Lake Winnipeg more than 30 years ago. A private company took over the resort in 2005 before it was then sold to the Paletta family.
One of Hecla's long-standing problems has been its location. While picturesque, it is a two-hour drive north of Winnipeg and it has had trouble attracting winter business.
In the meantime, it costs approximately $50,000 a month in the winter to keep the property heated and protected from the elements.
Negotiations between Lakeview and the province must conclude by mid-December to meet a deadline set out by the court.
Keith Levit, president of Lakeview Hotels, said his company brings a nationwide network to help sell Hecla as a destination.
"The synergies with Gimli, of course, will be a huge advantage to us. We have sales and marketing people across the country and we will be attracting not only Manitobans but other Canadians to visit the resort," he said.
Dewar noted there were two other offers made in the past on the property, but one did not fit the plans of the province and a second did not have secure financing.
"It's time to move on or at least give Lakeview and the province time to negotiate," he said on Tuesday.
He also overruled objections from the Paletta family over the sale.
"They can't come in at the last minute and complain. They knew where the receiver was … they knew where the government was," he said.