Sooke Harbour: News: Deertrail Property
Offer will secure Deertrail, TLC says
Two unnamed entrepreneurs come forward with million-dollar financing
provisions for mortgage
Bill Cleverley, Times Colonist
Thursday, August 12, 2004
An 11th-hour offer of $1.26 million from
private financiers has virtually guaranteed the spectacular
Deertrail property in Sooke will become park, says The Land
Conservancy executive director Bill Turner.
"It's huge," Turner said Wednesday of the offer to buy out the first
mortgage on the property and secure TLC's interest in the 64-hectare
property -- about 158 acres -- along the Sooke Potholes.
"It means that we can now protect our interest and the interest of
creating a park there by dealing with this in court and having the
money available to pay off the first mortgage." Turner said the
people who offered the financing want to remain anonymous at this
TLC holds the $1.4-million second mortgage on the land. If a
first-mortgage holder initiates foreclosure in any land deal -- as
Jim Evans of Deertrail Development did July 22 -- then the property
owner or the holder of the second mortgage must come up with the
money to settle the debt, or forfeit claim to the land and any money
invested in it.
Over the weekend two separate business interests came forward with
offers to protect TLC's interest by covering the first mortgage,
Turner said. TLC hasn't decided which offer to accept but both are
bona fide, he said. "We had separately two prominent Victoria
business people come forward and offer the funding needed to buy out
the first mortgage."
There is a possibility that the holder of the first mortgage could
try to buy out the second, Turner said, but he believes TLC's
position to be a strong one.
"They could pay out our second mortgage if they wish, but our second
mortgage has a face value on it right now of about $10.5 million so
if they were to ante up $10.5 million we would have to sell to
them," Turner said.
Neither landowner Albert Yuen, nor Evans, Yuen's son-in-law, could
be reached Wednesday.
TLC paid $1,375,000 to take over the second-mortgage position of
Kimberley Global at a considerable discount on the original $5
million US the company had lent to Deertrail.
The private offers made on the weekend mean TLC has time to
negotiate with the Capital Regional District and the province to
convince them to participate in buying the property.
The organization will also embark on a major fundraising campaign.
When CRD directors emerged from a closed-door meeting Wednesday they
reaffirmed the district's support in principle for TLC's position.
That does not mean it has agreed to any funding arrangement with
Evans has said some of the Deertrail site could be given over to
parkland if the remainder was developed for cabins and a lodge.
TLC sees the site as a park with a small campground and an
interpretive centre with some commercial activity.
Sooke municipality would like to see some commercial activity,
mingled with greenspace, to protect its tax base.
Oak Bay Mayor and CRD director Christopher Causton has been trying
to hammer out an agreement among all the parties but said Wednesday
he has not been able to find common ground.
"I did report to the board that I had exhausted what I though was
all possible avenues for a compromise between the various parties,"
The CRD has partnered with TLC on several land acquisitions in the
past and in July offered to protect TLC's interest in the land.
TLC would also like to see the province turn over as its
contribution the equivalent of Yuen's defaulted $1.26-million first
mortgage that it sold to Evans in June.
Yuen, who has owned the land for more than 20 years and has left a
trail of crumbled dreams for the property, ran into financial
problems last year.
© Copyright 2004 Times Colonist (Victoria)
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