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 time.

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 TLC.

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," Causton said.

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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