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| Last updated at 8:48 AM on 10/11/08 |
Resort plan ambitious 
Future could involve new hotel, flights, amalgamation, among other things
LITTLE RAPIDS
STEVE BARTLETT
The Telegram
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| An aerial photograph shows the breathtaking beauty of the Humber Valley. — Submitted photo |
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Second in a two-part series
On an overcast afternoon, Derrick White sits in his office at the Humber Valley Resort explaining what’s being done to avoid much darker days.
As president of the Newfound Canada, the company that operates the property, he’s embroiled in the effort to keep the resort afloat.
“It’s a very complex enterprise,” White says.
The financially troubled resort is under court-ordered protection from the companies to whom it owes money.
It lasts until Dec. 5, although Newfound will likely ask the court for an extension.
Under the shelter, which is provided by the Companies Creditors Arrangement Act, White and a team of lawyers and experts are formulating a plan to save the resort and address the claims of its creditors.
Humber Valley is approximately $66 million in debt, including contractual obligations.
From what White outlines during a wide-ranging interview, the plan being put together for the operation’s future is ambitious and complex.
Among the most enterprising aspects being pursued are a new hotel, amalgamation with a nearby town, re-establishing an air link with the U.K. and changing how the resort’s undeveloped land is held.
White says they are talking to interested parties about building and operating a hotel on the site.
Such an addition, he explains, would give Humber Valley a brand and attract conferences, helping level off the peaks and valleys of the seasonal resort industry.
Other successful resorts around the world, he notes, have hotels as part of their property.
“Getting a hotel into this resort is, in my opinion, key to its success,” White says.
Amalgamating with an area municipality would see the town providing services - such as snowclearing and water and sewer - in exchange for tax revenue. At the same time, it would lower the resort’s operating costs.
White suggests Humber Valley should have been made part of a municipality from the get-go.
As reported in The Telegram Oct. 31, the resort has had a discussion with Pasadena, but White says they’ve also talked with other townships.
He notes that they are dealing with the Department of Municipal Affairs on the issue, as well.
Re-establishing flights between the U.K and nearby Deer Lake is considered crucial for attracting and keeping the international tourists at which the resort has marketed itself.
White says his team, as well as other organizations on the west coast, have been in contact with the province about the air link.
It is not as simple, he stresses, as saying they’ve asked government to pay for the flights.
He uses the word ‘consultation’ instead.
“We’ve been in consultations with them as to a feasible way to establish international air access to Newfoundland,” he says.
According to White, a government committee is working on the issue.
“I do know they are working hard, they are looking at options, but at the end of the day, it’s a hard nut to crack,” he admits.
Changing the way the resort’s undeveloped land is held would increase the amount of financing available.
Because the parcel is considered leased from the Crown, it’s not considered an asset by financial institutions.
“We’re in consultations with the government on (the land) as well,” White says.
Besides these bigger initiatives, the restructuring would see Newfound Canada involved only in the development aspect of the resort.
Many, including White, feel the property is in its current situation partly because it was trying to be both developer and operator.
Under the forthcoming plan, things like food and beverages services, the golf course, and the spa will be run by companies with expertise in those areas.
Once the restructuring agenda is finalized, perhaps by Dec. 5, it must be approved by the Supreme Court and then put to creditors for a vote.
“If they say ‘Yes,’ “ White explains, “the company comes out of protection and proceeds. If they say, ‘No,’ the stay is lifted by the court and the company finds itself in a position where it would be deemed to be bankrupt very quickly there afterwards.”
It’s hard to predict if creditors will accept.
Some, it appears, are getting frustrated.
Late last month, one creditor, Maxium Financial Services, filed an unsuccessful application to take the resort’s golf equipment.
Martin Hanzalek is the operations manager at My Newfoundland Adventures, a company offering a list of year-round outdoor experiences that has worked closely with the resort and its clients over the years.
Humber Valley owes the business about $17,000, a huge amount for the small enterprise.
Hanzalek would have to wait and see what the restructuring bid contains, but says he would support a plan that addresses the needs of creditors and helps companies like My Newfoundland Adventures survive.
“That means providing some of the money owed,” he says.
If the restructuring fails to assist companies like his, Hanzalek says the plan won’t be worth the paper it’s written on.
For the resort to have a future, he says it needs My Newfoundland Adventure-type firms to provide experiences to guests by taking them caving, dog sledding or salmon fishing.
“It can’t exist on its own,” he says.
White says he empathizes with companies like My Newfoundland Adventures.
He says creditors will soon get proof of claim forms to fill out and declare how much they are owed.
“From where we sit we are doing everything we can to expedite this process,” he says.
White says he believes the resort can be a viable business, but admits its hard to predict if current restructuring effort to keep it alive will succeed.
If it doesn’t, he says the resort is built and won’t evaporate. He predicts someone will eventually make it work.
“The question is,” he says, “will it take 20 years to make it a success, and ultimately realize its true potential, or can that be done in five?”
sbartlett@thetelegram.com
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10/11/08
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Juwal from NL writes: This is a beautiful resort but please, will someone in government reassure me,a taxpayer,that there will not be any taxpayers money put into this white elephant to keep it afloat.
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| Posted 10/11/2008 at 9:27 AM | Alert an Editor | Link to comment |
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W BAg from NFLD writes: After seeing a second article concerning Newfound Canada in the Telegram it seemed suspicious. What's the big deal? Lots of compaies have failed ventures, especially ones as big, and as high roller as this one. I was starting to think Derrick White & the author were buddies or at least someone from the Telegram. But it seems a little clearer now, they are lobbying for a hotel & possible amalgamation with a town. It's a task to get the public on side. Now this article makes sense.
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| Posted 10/11/2008 at 9:51 AM | Alert an Editor | Link to comment |
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CLose By from Pasadena, NL writes: Here, here Juwal. The time has come and gone for gov't to be getting into this type of investment....I bet the Deer Lake company that went under a while back, throwing 150 people out of work wouldn't be to impressed either! Maybe if those who run the resort would come down to the level of the common folk here and reduce some of the prices..they could make a go of it. The golf course fee for example should drop to $1000 for the season...the place would triple it's membership overnight...we're not all millionaires who live next to this place.....
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| Posted 10/11/2008 at 10:06 AM | Alert an Editor | Link to comment |
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dick wade from nl writes: you need to get people in there first as terra nova has figured out. raising green fees and trying to make places exclusive are sheer madness. think of it?? if a nightclub here in the city was to charge memberships would it work ?? no. was it tried?? yes. do the math.
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| Posted 10/11/2008 at 11:42 AM | Alert an Editor | Link to comment |
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SANDY from NL writes: Also learn how to do a steak at the restaurant !! ONTARIO GOLF magazine did a review and stated nice course, no golfers on course and staff must have been looking at the view as the steaks were tough as leather !!!
NL....long way to go in the tourism business....better stick to fish sticks and chips !
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| Posted 10/11/2008 at 11:43 AM | Alert an Editor | Link to comment |
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Ted M from St. John's, NL writes: Close By from Pasadena,
I agree totally... Too many golf courses in the province are of the mind that if they charge more, they get more revenue. This couldn't be further from the truth. Meanwhile, comparable courses elswhere in Atlantic Canada are charging half the price. Go figure?
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| Posted 10/11/2008 at 12:18 PM | Alert an Editor | Link to comment |
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Confused from St. John's, NL writes: Once thing I could never understand was why the golf course is members only ??? Why not open the course to the public and increase revenue??
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| Posted 10/11/2008 at 12:29 PM | Alert an Editor | Link to comment |
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George from Fort Mac, Alberta writes: I guess they are trying to project an aura of exclusive country club, but there not many Thurston Howell III types in NL.
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| Posted 10/11/2008 at 3:15 PM | Alert an Editor | Link to comment |
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Thought so from nl writes: Confused from St. John's, NL writes: Once thing I could never understand was why the golf course is members only ??? Why not open the course to the public and increase revenue??
Couldn't agree with you more.......There's only one problem..You CAN T have the peasants mingling with the uppity crowd from away.....Their jargon, the way they dress, and their mannerisms are just TOO much.(sarcasm intended)
The ONLY way to make this resort a viable proposition is to make it operate within reach of the common man . The current clientele, may second guess the economy and stay away for a while. There is no guarantee that you'll see many return soon given the increased cost to get here. Screeching in a few may be novel but doesn't strike the a chord as it does wilt the locals on a tear.
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| Posted 10/11/2008 at 3:27 PM | Alert an Editor | Link to comment |
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Aubrey from Mount Pearl, NL writes: Hey,Confused, that's part of the snob appeal. Can't have the rabble with the $100.00 set of clubs from Wal Mart wandering onto the course. You must be a membah and keep your bar tab up to snuff.
By the way, where did they think they were building this luxury resort, in Dubai or Los Vegas ? Recently they were trying to get the government to subsidize the cost of flying their millionaire customers into the resort. At taxpayers' expense ? Like hell. This development was apparently the brainchild of Brian Dobbin. Time for another brainstorming session.
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| Posted 10/11/2008 at 4:31 PM | Alert an Editor | Link to comment |
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Ambrose McGrath from St. John's, NL writes: I totally agree with most of the comments herein. They charge such high prices that they turn away potential users of the facility. We have a lot of golf courses around Newfoundland now that are just breaking even. And no one can afford to pay for the other facilities they have. Jacking up the prices doesn't do any good. Put an affordable resort there and you will get more users. There are not enough millionaires in Newfoundland to keep this place afloat. I certainly hope the government does not use my tax dollars to keep it afloat. My tax dollars could be better used to repair the road from Whitbourne Junction to Argentia, so that when visitors come to our province they don't damage their vehicles (including RV's) trying to get to the TCH. Cather to the people who can afford to use the facility as you are not getting enough rich people from abroad and don't expect me to subsidize their air fare to the island.
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| Posted 10/11/2008 at 4:34 PM | Alert an Editor | Link to comment |
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