Lessons from Ben Eoin Part I

I recently received a batch of documents from the Atlantic Canada Opportunities Agency (ACOA) as a result of an access to information request about the Ben Eoin Marina (Those of you who like your source material straight up will find it all here.)

Ben Eoin Marina & Yacht Club

“Because of the combination of distance and treed vegetation, this development will not be seen from the Road.” (CBRM Issue Paper, June 2011. Photo taken November 2016)

I didn’t learn much that was new because local media coverage of the Ben Eoin Marina story at the time was excellent (especially the work of the Post‘s Nancy King, who tracked down every angle you could possibly think of).

So rather than simply rehash the marina story (although I’m going to rehash bits of the marina story because how could I resist?) I decided to look to it for lessons and I think I’ve found two. Here’s the first:

“Not-for-profit” organizations are not necessarily “community” organizations.

 

Ben Eoin Recreation

[T]his initiative is being advanced as a ‘community project’ on the basis of ‘not for profit.’

That’s Robert Sampson, president of Ben Eoin Marina Ltd, writing to Gerard McPhee of Enterprise Cape Breton Corporation on 7 July 2010.

Investopedia defines not-for-profit as:

[A] type of organization that does not earn profits for its owners. All of the money earned by or donated to a not-for-profit organization is used in pursuing the organization’s objectives and keeping it running. Typically, not-for-profit organizations are charities or other types of public service organizations.

Ben Eoin Marina is a Nova Scotia limited by guarantee company, one of the forms non-profit organizations may take in this province, but it is neither a charity nor a public service organization. Its “not-for-profit” status seems based simply on the improbability of its ever making a profit. Here’s how the authors of the 2009 Cape Breton Marina Report explained the Ben Eoin Marina board’s need for ECBC funding:

Management articulates the need for subsidies as ‘the facility is needed, but the risk is too great to expect private sector investment.’

(I’ll be discussing the “need” for the facility in Part II.)

In fact, the risk was too great to expect an investment from the actual proponents of the project, who preferred to put up a piece of land they’d purchased with public money (two forgivable $300,000 loans from ECBC and the Province of Nova Scotia) in 1999 for the golf course and marina. Here’s how Robert Sampson put it to Gerard McPhee in that July 2010 letter:

I wish to re-confirm that the contribution of the [Marina Board] is anticipated to be leveraging, to whatever extent is possible, the value of the land presently owned by Ben Eoin Marina Limited which is presently commercially assessed at $307,800.00…

The marina board also planned to use its not-for-profit status to demand tax concessions from the CBRM:

[T]he land has recently been appraised at $800,000 though the current assessed value of the proposed marina site from a property tax perspective is approximately $350,000. It is assumed that based on the anticipated capital costs of the marina, an assessed value of $1 million is appropriate…as Ben Eoin Marina Ltd is a not-for-profit entity, the argument can also be made that cash flows from operations are not sufficient to pay property taxes in excess of this amount. Other not-for-profit organizations receive discounts and grants from the municipality and the board believes it will be able to negotiate a fair rate. [ECBC Project Summary Form 2011]

At the risk of going off on a tangent, I’d like to take a moment to show you the grab-bag of organizations — some for-profit, some non-profit — connected to the Ben Eoin facilities. All are designated “active” in the NS Registry of Joint Stock Companies:

Business/OrganizationTypeStatusPeopleRecognized AgentEstablished Related RegistrationsRegistry ID
Ben Eoin Marina Ltd (Previously Ben Eoin Golf Club Limited)NS Limited by GuaranteeActiveDirectorsA. Robert Sampson 1998-11-03Ben Eoin Yacht Club3024152
Ben Eoin Golf Club LtdNS Limited CompanyActiveDirectorsJames R. Gogan 2006-05-12The Lakes Golf Club 3146392
Ben Eoin Golf HoldingsNS Limited CompanyActiveDirectorsJames R. Gogan 2006-05-12 3146391
The Lakes Golf ClubPartnership/Business NameActiveA. Robert SampsonA. Robert Sampson 2007-12-11Ben Eoin Golf Club Ltd3224363
Ben Eoin Recreation Inc.NS Limited by GuaranteeActiveDirectorsA. Robert Sampson 2014-05-06 3281432
Ben Eoin Ski Team AssociationSocietyActiveDirectorsNancy L. Nippard 2014-11-24 3285351
Ben Eoin Yacht ClubPartnership/Business NameActive A. Robert SampsonA. Robert Sampson 2013-11-12Ben Eoin Marina Ltd 3276553
Ski Ben EoinPartnership/Business NameActiveRobert D. CarmichaelRobert D. Carmichael 2010-06-04The Cape Breton Ski Club 3246080
The Cape Breton Ski ClubSocietyActiveDirectorsRobert D. Carmichael 1968-01-16Ski Ben Eoin 1254675
Sun Mountain Development LtdNS Limited CompanyActiveRobert D. Carmichael1968-12-06 1083042

The sheer variety of active players seems to help when it comes to looking for public money — as you will see below, many of these organizations have been on the receiving end of government assistance.

But sometimes, the tangle of relationships raises questions: like in June 2015, when Sandy Macneill, in his capacity as president of Ben Eoin Recreation Ltd, went to the CBRM for $350,000 from the municipality’s sustainability fund. According to the Post, the not-for-profit Ben Eoin Recreation is the umbrella body for The Cape Breton Ski Club, The Lakes Golf Club and the Ben Eoin Marina. If you paid close attention to the table above, you’ll have noted that The Lakes Golf Club is listed as a Partnership/Business, not a non-profit (the two other golf-related listings are also for-profit companies). The money was to go to the ski hill and the golf course and at least one councilor had qualms about that, as the Post reported:

Dist. 4 Coun. Claire Detheridge expressed some reservations about supporting the golf component of the project, although she fully supports the ski hill.

“This is a new golf course and we’re getting into paving and putting greens and driving ranges and cart paths … what’s to stop all the other golf course to start coming in, looking for money for upgrades?” she said.

MacNeill said some of the improvements that will be done to the golf course will also be enjoyed by the ski hill.

The answer seems to be, it’s okay to help our golf course because the popular, non-profit organization next door will also benefit. And in case Council still wasn’t getting it, Macneill made it even clearer:

When asked if the funding isn’t received if the ski hill would be forced to shut down, Sandy MacNeill of Ben Eoin Recreation replied,  ‘Absolutely.’

(The question he should have been asked was: if the ski hill was in such dire need of repairs, why did you put $4 million into a marina? But sadly, nobody seems to have asked it.)

What Detheridge was getting at (I think) is that the The Cape Breton Ski Club may qualify as a community organization, but The Lakes Golf Club, even when sheltered under the umbrella of the not-for-profit Ben Eoin Recreation Ltd., does not. (It’s a point local reporter Tera Camus made when she published the list of sustainability grant recipients for 2016, noting the difference between the for-profit golf club and the volunteer groups that struggle to fundraise with “bake sales and chase the ace” events.)

 

 

Public Benefit

Some not-for-profit groups do, as Sampson stated, receive “grants and discounts” from the CBRM, but that’s because the objectives they pursue are seen to be of public benefit. In fact, that’s one of the questions you must answer when looking for sustainability grants from the CBRM: “What is the public benefit of this program or service?”

Ski Ben Eoin/The Lakes Golf Course

(Photo by Verne Equinox, Own work, CC BY-SA 3.0, via Wikimedia Commons)

If I close one eye and squint, I can just about see the “public benefit” of the Ben Eoin ski hill. I know a couple of generations of kids have learned to ski there. I know families for whom it is great source of happiness each winter. I know that, compared to the marina and the golf course, it is reasonably priced.

But that doesn’t mean it’s accessible to all Cape Breton families. It wasn’t accessible to my family 40 years ago. (Ski passes and equipment for four kids? We’d have been more likely to take up Formula One racing.) And given that horribly familiar statistic that one in three children in the CBRM is living in poverty, it seems clear there is a pretty wide swath of our “community” whose enjoyment of the Ben Eoin ski hill is limited to driving past it.

The best family membership deal (based on a family of four) at the ski hill would be The Early Bird, $891.25 (HST included). To Ski Ben Eoin’s credit, they allow people to pay in installments, but that’s still a lot of money and it doesn’t include ski equipment (or rentals) or transport to and from Ben Eoin.

Expand that to include a family membership at the golf club and sailing lessons for the children at the marina (I didn’t bother with a marina membership, I assumed my hypothetical family didn’t own a yacht and I signed the children up for one-week rather than two-week sailing courses) and the costs look like this (HST included):

Ski Ben Eoin Early Bird Family Membership: $891.25

The Lakes Golf Course Family Membership:  $2,874.99

One-week Learn to Sail Courses (X2): $300

Total: $4,066.24

That’s not “accessible” to the community. Although, in his defense (sort of), I think when marina president Robert Sampson says “community” he means “the boating community,” that is, his community, and those who wish to join it. The “hundreds of people,” as he put it at a 2013 press conference, who don’t own boats, not because they can’t afford them, but because “they have nowhere to keep” them. (I’m not sure if he was asked, “Why are there so few boats on the Bras d’Or?” or “Can you give me a textbook example of a first-world problem?”)

But I’ll stand by my statement: these facilities are not accessible to the general public, and yet the general public has been called upon, time and time and time again, to help pay for them.

 

The Reckoning

I tried to compile a list of all the public money that has been invested in Ben Eoin since the ski hill was first developed in 1967. My list is not exhaustive. (I’m waiting on more complete information from the CBRM and the province about their donations over the years and I don’t know how much money Cape Breton County put into the ski hill prior to amalgamation. I will update the table as the information comes in.) Nevertheless, it is extensive. Behold:

Organization ProjectContributionType of ContributionDateProject Number
Ben Eoin Marina LtdConstruct full-service marina on east side of Bras d'Or Lake$4,000,000Non-repayable2012-05-19803902
Preliminary work and business plan preparation for proposed marina.$135,000Non-repayable2010-09-17803880
Ben Eoin Golf Club LtdEstablishment of a world-class golf course$400,000Loan2010-01-23803801
Productivity and business skills development$50,000Non-repayable2009-05-30194744
Creation of prospectus and updating business plan$45,000Non-repayable2004-11-01 803074
Property consolidation for golf development$300,000Loan1999-07-27802597
Ben Eoin Golf Club Ltd & Cape Breton Ski ClubCapital upgrades necessary for expansion project$750,000 Non-repayable2012-02-05803976
Establish a word-class, 18-hole golf facility$3,500,000Equity Investment
2006-08-04803236
Cape Breton Ski ClubUpgrade and improve the equipment and the facilities of the ski club$425,000 Non-repayable2016-05-10204875
Conduct a feasibility study (Wind Energy)$37,500 Non-repayable2015-04-11204702
Host Atlantic Cup AAA ski race finals$31,464 Non-repayable2013-04-14 804093
Capital upgrades to increase capacity$695,000 Non-repayable2012-11-30 804060
Explore expansion of and development of ski hill$125,000 Non-repayable2011-03-01 803903
Hire marketing manager to promote ski hill$50,000 Non-repayable2010-07-09 803825
Chalet expansion and renovations$425,000 Non-repayable2010-04-27196304
Snow Jam 2010$1,000 Non-repayable2009-08-09 803671
Upgrade snow-making system$200,000 Non-repayable2008-07-25 803394
E-commerce site development$5,750N/A2005-12-25 803237
Equipment necessary to host 'Atlantic Cup' race$25,000 Non-repayable2003-04-14182387
Technology Enhancement$187,500Non-repayable2003-01-28181484
Expand/modernize ski facility$480,000 Non-repayable1999-06-12174347
Expand ski facilities/purchase computer/develop new trail$56,326 Non-repayable1999-01-02174348
The Birches at Ben EoinE-commerce: Upgrade website$4,897Non-repayable2009-09-12803621
E-commerce website$7,323Non-repayable 2005-04-17803122
Establish a 4-star country inn$100,000Non-repayable2003-09-30802971
Establish a 4-star country inn$30,000Loan2003-09-30802972
Establish a 4-star country inn$500,000Loan2003-09-30180732
Ben Eoin Recreation Employment Nova Scotia Program Funding$7,340.37Non-repayable2016N/A
Employment Nova Scotia Program Funding$15,830.34Non-repayable2015N/A
Club equipment$5,000.00Non-repayable2015N/A
Community grant$175,000Non-repayable2015-12-02N/A
Economic & Rural Development & Tourism$99,923.00Non-repayable2014N/A
Golf practice facility$36,000Non-repayable2014-07-17N/A
Project beautification, facility upgrades, product development$163,608Non-repayable2013-12-08804120
Workplace education program funding $9,232.00Non-repayable2013N/A
Rental snow sport helmets$6,666.66Non-repayable2012N/A
Ben Eoin Ski PatrolExpand medical treatment facility/purchase equipment$35,250N/A1998-03-08174196
Ski Ben EoinInfrastructure improvements$150,000Non-repayable2016-10-10N/A
B-Fit grant, health promotion & protection$187,000Non-repayable2008-06-16N/A
Undertake a comprehensive training program$12,375N/A1996-04-28174538
Ben Eoin Aerie EstatesAccess road$1,100,000Non-repayable2011N/A
Purchase house and 26 acres$275,0002011-2012N/A
Total$14,843,985.37

That’s almost $15 million. (Although as an estimate, that’s conservative, as I’m missing data from the province, the CBRM and the County of Cape Breton. Also, I did my very best to ensure the accuracy of the numbers, but if you’d like to double check them, you can search the ECBC projects here and  ACOA projects here using the project numbers. I will update the table with any further information I receive.)

Imagine what a great community asset we’d have if that money had all been put into the ski hill with the proviso that management make it more accessible to low-income people? If we’d insisted on distinguishing between “not-for-profit” and “community?”

And on a final note — because I can’t resist — if there’s any confusion as to what a true community asset looks like, consider the library: it charges no onerous membership fees, requires no special equipment to use, is accessible to everyone, serves both locals and tourists, creates jobs and is open year-round. That’s kind of the gold standard of community asset, something worth remembering when the library committee comes looking for funding.