Ben Eoin Development Group Bags Golf Club

Word out of Ben Eoin is that 3312636 Nova Scotia Limited — which became Ben Eoin Development Group Inc as of 17 December 2018 — has bought The Lakes Golf Club.

Jerry Redmond, the treasurer of Ben Eoin Golf Club Ltd, which had owned the golf course, told me by email on Tuesday:

We did have a Special Meeting of shareholders on Feb 5th, 2019 to vote on the offer we received and the vote went 97% in favour of accepting the offer.

The actual purchase/sale agreement is in the final stages of drafting and could completed and signed as early as tomorrow.

I asked Redmond if the offer is from the Ben Eoin Development Group Inc and he said:

Oh, yes it is.

(I like the “Oh,” although I’m not quite sure what it signifies — it’s so hard to convey tone by email.)

Ben Eoin Development Group Inc (which apparently, for reasons I can’t begin to fathom, has decided to go by BEDGInc) looks like this:

Rodney Colbourne (President/Secretary)

Mike Kenny

Troy Wilson

Steve MacDougall

Siva Thanamayooran

Glen Brann

Recognized Agent: Dwight Rudderham, QC

The golf course purchase completes its takeover of much of the development around the not-for-profit Ben Eoin Ski Hill. To recap, in addition to the golf club, they now own:

The Birches at Ben Eoin Country Inn Ltd, purchased for $675,000.

The Aerie Estates subdivision, purchased for $445,000

A 1.6 hectare lot at the top of the hill housing the Aerie Estates, purchased for $66,500

The land beneath the Ben Eoin Marina, purchased for $150,000

That’s a total of $1.3 million.

I’ve been hearing rumblings about the impending sale of the golf club for some time; although, to be honest, the development group wasn’t making any secret of its intentions. Back in September 2018, Colbourne told the CBC the group also owned shares in The Lakes Golf Club and their aim was to realize Enterprise Cape Breton Corporation’s (ECBC) original dream of turning Ben Eoin into a “Four Seasons” resort area. (Which I presume means their next purchase will be a fourth season.)

I don’t know the price the group has offered for the golf course but my guess is that the total the group has paid for the Ben Eoin developments won’t be anywhere near the value of the provincial and federal money that has gone into them over the years:

 

Organization ProjectContributionType of ContributionDateProject Number
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
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
Ben Eoin Aerie EstatesAccess road$1,100,000Non-repayable2011N/A
Purchase house and 26 acres$275,0002011-2012N/A
Total$7,574,153.71

*I’ve included any grants or loans to Ben Eoin Recreation that could conceivably have benefited the golf course as well as the ski hill — which means I’ve included everything in my original table except money to be used for ski helmets. All the numbered items represent federal contributions.

 

ACOA FTW!

Did you notice that $3.5 million of that total is an equity investment made through the Cape Breton Growth Fund in 2006 and 2008? That means we — via the government of Canada — own a nice chunk of that golf course.

As of 2016, when I asked  ACOA communications manager Lori Selig about the status of that stake, she told me:

In June 2014, with the dissolution of ECBC, ACOA became responsible for economic development files in Cape Breton. This includes the equity investment in The Lakes Golf Course.

ACOA continues to monitor the investment.

I wrote ACOA on Monday to say I’d heard the golf club had been sold and to ask after the status of the government’s equity investment. This is the response I received from communications officer Jay Witherbee :

Upon the dissolution of the Enterprise Cape Breton Corporation (ECBC) in June 2014, ACOA became responsible for ECBC’s economic development files in Cape Breton. This includes the equity investment in The Lakes Golf Club.

ACOA considers and applies, as deemed appropriate, all means at its disposal to ensure compliance to the terms and conditions of the assistance program under which funds were allocated to a business, including if or when a change of ownership occurs.

Specific information related to the terms and conditions of a contribution agreement, including the status of repayments, is subject to client confidentiality and cannot be disclosed.

As I’m sure I’ve mentioned before in these pages, I believe the price of receiving public money should be complete transparency about that money. ACOA referring to the businesses to which it gives/lends money as “clients” suggests ACOA has come to think of itself as a business. But it’s not — it’s a government agency dealing in public money. I wrote back and asked the same question again and received a second non-response:

The investment in The Lakes Golf Club continues to be administered by ACOA.

ACOA takes all appropriate actions to protect taxpayers’ investments.

ACOA is taking all appropriate means to protect our investments it just won’t tell us anything about them.

 

Board games

On 11 December 2018, changes were made to the board of Ben Eoin Golf Club Limited. It now looks like this:

Coleen Moore-Hayes (President)

Denise Gallant (Secretary)

Jerry Redmond (Treasurer)

Jeffrey Power

Ron MacDonald

Bernadette Romeo

David MacLean

W. Manning MacDonald

Jim Burke

Greg Robertson

Recognized Agent: Jerry Redmond

 

Prior to this change, the board looked like this:

Coleen Moore-Hayes (President)

Glen Brann (Co-VP)

Michael Kenny (Co-VP)

D Greg Rushton (Co-Secretary)

Robert J. Redshaw (Co-Secretary)

Jerry Redmond (Treasurer)

Bernadette Romeo

Greg Robertson

Jeffrey Power

W. Manning MacDonald

David MacLean

Recognized Agent: James Gogan

(Gogan remains the recognized agent of The Lakes Golf Club.)

 

You see what happened there? Just before offering to buy the golf club, Glen Brann and Michael Kenny removed themselves from its board. Had they not, they would have found themselves in an awkward situation, legally bound to act both in the best interests of the potential buyer — trying to drive the price of the golf club down — while at the same time acting in the best interests of the seller — trying to drive the price of the golf club up.

Just the thought of it makes me dizzy.

But Jerry Redmond, who was treasurer before and after the vote to sell the club, also has what I would call a conflict. As he explained to me:

I have been the Treasurer for nearly 4 years now and I knew what the club really needed.

Six of the seven owners of BEDGInc are present shareholders of Ben Eoin Gold Club Limited and all live within several miles of it.

I do the external accounting for several of that seven.

Got that? Redmond works for a number of the businessmen who bought the golf course for which he serves as treasurer. But he doesn’t see that as a problem, he sees it as a plus:

For that very reason they trust me with financial condition of the Golf Course and that the values of the assets and liabilities are properly stated.

I was acting on behalf of the shareholders of the club and I also know the offering group well enough to trust what they were offering the many shareholders.

I truly believe it is a win/win situation for both parties.

Honest question: can one person look out for the best interests of both the buyer and the seller in any transaction?

I think not.

Next question:  how much did BEDGInc pay for The Lakes?  Any guesses? Maybe we should start a pool…

 

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