Developer Mike Rink’s dream of a $30 million RV resort at on Shuswap Lake in Britsh Columbia has come to an end as a receiver will take control of the property and the lender will try to sell the property.
The Salmon Arm Observer reported that although Rink’s company was protected by the courts until the end of this month, New Recreations Ltd. has chosen not to ask for an extension.
Neither Mike Rink, nor his lawyer Andrew Prior, responded to calls from the newspaper.
Earlier this month, a Supreme Court judge ruled that storage sheds used to market the sale of RV sites are not consistent with previous use when the site was known as the Cottonwoods Campground.
“What that meant in a nutshell was they could not sell RV lots on this project, so the entire basis for their project collapses,” says David McMillan, a Kamloops lawyer representing the local trades.
McMillan says, in turn, the primary lender, Mission Creek Mortgages, has taken over the project, having applied for the appointment of a receiver.
“New Recreations is out; they’ve lost the project,” says McMillan. “Mission Creek will foreclose.”
McMillan says Mission Creek gave notice of foreclosure in the fall of 2010, but New Recreations sought and received court protection under the Company Creditor Arrangement Act.
“What will happen this year, is the receiver will attempt to operate the property in much the way it was operated previously,” says McMillan of the popular Cottonwoods Campground.
“It will revert to a summer campground-RV type of operation, but the receiver and the lender will try to sell the entire thing and recoup what will turn out to be pennies on the dollar for them.”
McMillan says Mission Creek loaned New Recreations about $20 million, all based on the selling of the RV lots to make the operation worth $30 million.
“New Recreations paid about $5 million and they paid too much because they paid for it in the belief this grandiose project would be a success,” he says.
McMillan says typically the mortgage company gets priority and all other liens are wiped out.
“They never believed there would be anything, but they had to keep their foot in the door and monitor how the process worked out,” says McMillan of his clients. “I gave them that dose of bitter medicine a long time ago. Their prospects remain very slim, probably non-existent.