Photo mosaic by Pete RockwellMost of the construction crews were laid off at the beginning of 2009. The grocery store that was scheduled to open this year has pulled out, along with Vancouver developer Robert Quigg. A dozen or so lawsuits are pending against Barrie and the resort.
Some highlights from Shoalts' column:
Nobody saw that coming, eh? Well, greed does strange things to people. Cue the world's smallest violin orchestra, playing a sad waltz.Barrie ... is fighting to save that gamble – a massive development near Victoria called Bear Mountain.
Like many real estate developers, Barrie and his 17 investors – who include current and former NHL players such as Mike Vernon, Gary Roberts, Joe Nieuwendyk, Ray Whitney, Rob Blake, Ryan Smyth, Sean Burke, Rob Niedermayer, Scott Mellanby, Matt Pettinger and Trevor Kidd – were whipsawed by falling prices and the drying up of bank credit.
Some of those investors are angry and some are not, but they all have two things in common: They are not talking about it and all fervently hope Barrie can pull a rabbit out of his hat.
As opposed to blowing sunshine up their butts? These poor suckers must be praying for an obscenely-wealthy rabbit with impaired judgement.
He needs to work out a new financing deal on the 500-hectare development that includes two golf courses, a resort, hotel and as many as 5,000 condominiums, townhouses and residential lots.
And an interchange! Don't forget that. How many resorts come with their very own half-built highway project?
No doubt some were concerned when Vernon, who is one of the largest investors, sold his custom-built Calgary house this week for a city-record $10.3-million. Vernon would not comment on the sale, but one of his friends said it had nothing to do with any problems with Bear Mountain.Maybe it's a problem with the location. Was the house built on a native burial ground, by any chance?
The B.C. project was going well until last October, when the worst of the recession hit. Suddenly, housing sales dried up and the value of the project dropped. Even worse, Barrie's bankers got nervous about the big loans that came up for renewal this year.
Uh oh. Did someone say "default?"
Barrie did announce recently that he closed a deal worth $350-million with Siraj Capital Ltd., an investment company based in Dubai. ... Under this arrangement, Siraj Capital gets control of the residential side of the Bear Mountain project for what amounts to a $350-million loan with stiff terms.
Does that mean they'll own the rest of the native cultural sites on the mountain? Will they get to blow those up like Barrie did with the cave? We know they don't get the mineral rights with the deal.
But even this depends on Siraj being able to raise the $350-million by selling units in a weak market. If the units cannot be sold by the first week of October, the deal will likely die.
In the past year, they've tried flogging condos in Spain, United States, Canada, and BC, with little success. The sales office in Victoria, 20 km from Bear Mountain, went tits-up way back in 2007.
Jeez, STFU and don't queer the deal!The reason all of the Bear Mountain investors are keeping quiet, even the unhappy ones, is that none of them want any negative vibrations to kill the Siraj Capital deal. They see it as the only hope of getting their money back, let alone making a profit.
Hah! It must be a pleasure doing business with such a gentleman.If successful, it may also go a long way to soothing Barrie's major lender, HSBC. Apparently the bank wants to be repaid a lot quicker than Barrie thinks is manageable (say two years versus five or more) and it wants higher fees than Barrie is willing to pay.
Quite interesting reading the differences between Lyle Jenish's article 4 months ago and what Shoalts has to say. According to Lyle, investors have made a "mountain of cash" on BM yet now we hear that the hope is to even get any return on the original investment.
ReplyDeleteThe St Pete's Times is reporting today that some US real estate "mogul" is interested in bailing Barrie out of his hockey dilemna if the "deal is right". I wonder how that works, Barrie gets to dictate the terms and demand he get his way?!
Thanks for keeping us in the loop on this sad state of affairs WTF
Corrected comment
ReplyDeleteHmmm.
Len now says that his investment in the Lightening is $40M. That is srange since it was reported that he paid $20M for his share. Perhaps he is confusing what he paid for his shares with the extra $20M he has had to fork over to keep the money sucking ship afloat.
Forbes reports that Len et al paid $210M for the Lightening and that just prior to the economic meltdown the team was valued at $200M. There are no updated valuations available, but lets assume that like most other luxury assets the value of the team has declined and is now worth $160M.
So does that make Len's 20% stake worth $16M then ($20M invested against purchase price less debt of $105M). Not so fast, you see Len and his buddies borrowed $105M to purchase the team in the first place which makes the actually equity about $55M (my guess) and Len's share about $10M.
So according to Len he has "invested" $40M and I estimate his actual stake is worth $10M. May take a bit then for him to get his "$40M back" as he suggests to Cleve.
Barrie says a lot for someone with a gag order. Hate to see what nonsense he'd be spewing if he could talk freely.
ReplyDeleteLet's hope the Lightning go bankrupt, not a hockey market at all, then Len can concentrate on BM a little more. I don't have a problem with BM, looks like it has done a lot for Langford. I do have issue with all of the unpaid bills BM has out there. The project itself will work long term, it is already pretty successful, only recently have their been any problem, but all projects are having troubles.
ReplyDeleteCanada Revenue: look under this rock and you'll find worms. Self dealing, theft and corruption start at the top at BM and all the loyal, long-time insiders are getting their cut.
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