Cape Breton golf club sale nearly a done deal, says official
Club's $3.5M loan from ACOA came due last year
An official with The Lakes at Ben Eoin says the sale of the golf club is pretty much a done deal.
The Ben Eoin Development Group has offered to buy the golf course, located near Sydney, N.S., by taking over the assets and liabilities.
Operators of the ski hill next door say they have first right of refusal in a sale of the golf course, but Jerry Redmond, treasurer at The Lakes Golf Club, says the vast majority of shareholders want a deal now.
Redmond said shareholders voted 97 per cent in favour of the sale to the development group earlier this month.
On top of a mortgage, expensive golf course maintenance equipment and annual operating costs, the club's 10-year-old loan of $3.5 million from the Atlantic Canada Opportunities Agency (ACOA) came due last year.
"Trying to maintain that equipment and keep it up to very good running order, plus pay off this huge amount of debt that we had with ACOA, we didn't see how that was going to happen, so that was a very scary period of time," Redmond said.
"What really hurts is ACOA ... finally came back and said, 'There is a repayment schedule. Here it is. Here's your first invoice.' And that's when it really hit home that, OK, we could be in trouble."
The golf club's board of directors met with ACOA to see if better terms could be worked out, but Redmond said that was not possible.
No cash involved
The purchase offer by Ben Eoin Development Group, a collection of local business owners, does not involve any cash.
Redmond said under the deal, golf course shareholders will get out from under a heavy debt, and they'll continue to get discounted memberships.
"We were very excited that even anybody would actually want to take over all this debt," he said.
"That is why the vote went in favour of 97 per cent. It was really nothing to worry about. Nobody thought they were going to lose anything."
Redmond said the group plans to move the golf course pro shop to the Birches and golfers will use its kitchen facilities.
Group president Rodney Colbourne has previously said the plan is to develop all of the assets in the area to create a four-season recreation and residential centre.
Sale could lead to court
John R. MacDonald, a past president of the ski hill, said the ski operation and golf course currently share facilities and staff, and board members of the ski hill are worried about how a sale to private interests might impact the facilities.
He said they may be headed to court.
"So far there's been no official recognition of our right of first refusal," MacDonald said. "We've certainly sent the notice to them."
Redmond said the ski hill has 15 votes on the golf course board, but said they abstained from a vote on the proposed sale in December.
He said the ski hill produced a document after the second vote in February outlining a right-of-first-refusal agreement, but it was too late.
A fair vote, treasurer says
Redmond said the golf course shareholders voted fairly — and strongly — in favour of the development group's offer, and the golf course board does not want to go further into debt to have a lawyer examine the late document.
He also said it may appear that he's in a conflict of interest as the golf course's treasurer and an accountant who works on behalf of some of the development group members.
But he said everyone, including golf club shareholders, knows his affiliations and he has acted in the best interests of the golf course.
"It certainly wasn't a problem for the 97 per cent that voted in favour," Redmond said.
The sale is expected to close soon.