Sabres are rattling between lawyers for the Columbia Shuswap Regional District and New Recreations Ltd. owner Mike Rink over development near the Adams River.
Following in-camera discussion June 15, the CSRD board directed staff to seek a court injunction to stop all development-related activity at the West Beach Village Development site.
The war of words began at the end of April when CSRD expressed “significant concerns” with legal issues around the proposed development under the Land Title Act and applicable zoning.
The regional district expressed their views in an April 27 letter to lawyers for the Bowra Group, the financial advisory service monitoring New Recreations under the Companies Creditors Arrangement Act (CCAA).
The letter charges that New Recreations is attempting to circumvent the subdivision approval process by creating a development that depends, for the registration of an interest in the land, on 199-year leases of small storage sheds.
This, maintains the regional district, is not made evident in New Recreations disclosure documents to the courts or in marketing materials, where would-be purchasers are promised exclusive right to their RV pads.
Also in question are riparian area issues regarding an inland lagoon and promises to would-be purchasers they will have exclusive rights to their RV pads, something CSRD says is consistent with resort residential rather than the seasonal campground zoning currently in place.
“The CSRD submits that the true nature of this West Beach Development should be disclosed to the court and the issues raised by the CSRD be made known to the court as part of any proceedings that might result in the continued marketing of this very questionable development,” concludes the letter. “It is our position that the monitor has a responsibility to the court to make full and accurate disclosure of the precise legal nature of the West Beach Development and the concerns being raised by local government having jurisdiction.”
But Rink’s Vancouver lawyer, Andrew Prior, disagrees with CSRD’s assessment and accuses the regional district of acting on public pressure and jeopardizing Rink’s ability to restructure under the Companies Creditors Arrangement Act.
Prior rebuts CSRD claims in a May 20 letter expressing confidence that the leases comply with the Land Title Act and that uses under the Local Government Act are not restricted to any particular season.
Prior points to a legal opinion he believes CSRD obtained sometime in 2009 that confirmed the development complied with applicable law and says he will be asking the court to order the regional district to produce the opinion and any related correspondence.
“Within the CCAA, we’ve filed an application to cover the two issues raised in the CSRD letter (land use and leases), which will be heard Sept. 19,” Prior said Monday. “We continue to stand by our letter and I am confident we’ll be successful.”
Prior said he will not comment further on the issues now that they are before the court, but agreed the cost to Rink will be high if the West Beach deal falls through.
“It is a significant development to his group of companies and that significance is certainly why this application is also important to all the creditors of New Recreations Ltd.,” he said.
David MacMillan, lawyer for five contractors who worked on West Beach and have yet to be paid, questions CSRD’s timing in trying to derail the development and says the costs to his clients – some $750,000 – would be enormous.
“On a personal level I think CSRD is right, I think the legal scheme that was put together to create this RV park was a sham, it was done in a clever creative way to circumvent usual rules to subdivide property to sell to people,” MacMillan says. “For better or worse, CSRD allowed the project to not only to get started, but go to the point where the RV project is almost complete.”
MacMillan says not only is the developer at risk, but if CSRD is right, there will be nothing to sell.
“All of the presumed value that supported the mortgage loans would evaporate,” he says, noting his clients provided labour and materials assuming relevant government employees had ‘done their homework’ making sure the property was properly zoned and all the right permits were in place. “If it’s fundamentally illegal, it should have been nipped in the bud a long time ago, before the contractors put out their money and effort. My clients might well have to ask the CSRD how it came to this point, even if they do turn out to be right.”
But Charles Hamilton, chief administrative officer for the regional district, questions why CSRD should be held responsible for a lack of due diligence on the part of contractors prior to beginning work.
North Shuswap director Denis Delisle says the regional district bent over backwards to make sure Rink had every opportunity to correct problems identified by CSRD.
He also complains of a lack of support from other agencies involved in moving the project forward.
“Support from other agencies, in my mind, hasn’t been stellar and it’s difficult to have a strong case without that,” he says. “We have to have more support from provincial and federal governments. The RAR issue is a prime situation where they’ve handed down a law that we have to enforce and it’s very costly for us.”