Wilds idea

High-end resort projects going after little-known tax credit; could change tourism landscape

Steve Bartlett sbartlett@thetelegram.com
Published on December 19, 2009
Eric Coombs and Jerry Bishop are part of the group that owns The Wilds. They're going to offer building lots along the river flowing behind them as they expand their property and turn it into a four-star resort. - Photo by Steve Bartlett/The Telegram

Jerry Bishop knocks snow off the pines along the Salmonier River as he hops around like the rabbits that have obviously been tearing through the dense stand of trees.

He comes to a full stop in an opening and excitedly declares, "The house will be here."

Bishop is hyped.

He and the others in the foursome that owns The Wilds have an ambitious plan to turn their golf course-hotel combo off Salmonier Line into a four-star resort.

First in a two-part series

Jerry Bishop knocks snow off the pines along the Salmonier River as he hops around like the rabbits that have obviously been tearing through the dense stand of trees.

He comes to a full stop in an opening and excitedly declares, "The house will be here."

Bishop is hyped.

He and the others in the foursome that owns The Wilds have an ambitious plan to turn their golf course-hotel combo off Salmonier Line into a four-star resort.

It's been on their minds for a while, and a little-known provincial tax credit is providing the impetus to move forward.

Such incentives don't usually make the news, except following a budget or when someone is guilty of abusing them.

However, if the resort property investment tax credit meets its objective, it has the potential to generate headlines from the spinoffs it will bring - multimillion-dollar projects, investment opportunities and more tourists.

The incentive, which aims to get individuals and businesses to invest in resort properties, is actually not new.

It was introduced in June 2007 after a report from three years earlier found a demand exists for year-round tourism properties with a minimum of 50 units and quality ratings of three stars or more.

To spur such development, the initiative gives a 45 per cent tax credit on money invested in newly constructed resort units that meet certain standards.

According to the Department of Finance, five groups have registered for the program.

None have completed a resort, a spokeswoman says, and no tax credits have been provided.

The Wilds group is one of the parties intent on changing that.

The owners - Bishop, Glen Roebothan, Ed Drover and Eric Coombs - have come up with a collective vision to expand their 340-acre property off Salmonier Line into a bustling year-round resort.

"It's going to be a restful, peaceful lifestyle (facility), with a multitude of activities," Bishop says. "(People) are going to be able to salmon fish or just walk the river. ... Some people like to walk nature trails, we'll have nature trails and all that. If they want to go cross-country skiing, we're going to open up the golf course cart paths for skiing."

(Since the topic involves The Wilds, tax breaks and the province, it's important to note that Premier Danny Williams' blind trust divested itself of his interest in the property more than two years ago.)

After passing regulations and environmental assessments - Bishop even spent two days tracking through the woods to ensure a rare lichen wasn't on the property - the first public phase of The Wilds' plan will begin early in the new year when they start selling cottages and suites.

The furnished units will be plugged as both a place to stay and an investment opportunity for the public.

People who buy in will be able to use the place for up to 90 days a year.

They'll then place it in the resort's rental pool for the remaining 275.

Money collected from the pool will then be shared between the resort and the cottage/suite owners.

The rental revenue, combined with the tax credit, makes it a win-win for buyers, says Coombs.

"You're going to get some money back on your rent, you're going to get a 45 per cent tax credit, real estate will be quality-built and hold their value. ... If nothing else, it will be a good investment," he says.

The sharing concept is popular at resort properties across the continent and, according to Coombs, "works well."

The aim at The Wilds is to increase the number of rooms available from the 40 to a minimum of 90.

They need to add at least 50 units - and a variety of amenities, including a spa - to qualify for the tax credit.

Having the extra rooms in the rental pool will enable The Wilds to accept and pursue business it's currently missing out on - conventions, business meetings and larger functions.

"The demand is definitely there," says Rhonda Reddy, who handles sales and events and says she regularly turns away bigger events.

The expansion will also give the resort more rooms to sell for parties and weddings - with almost 40 couples exchanging vows in 2009, one of the hotel's biggest draws.

"We hate it when people come out here and have a wedding and half the people got to get on a bus and go back to St. John's," Bishop says. "How can they sit down and enjoy themselves at the wedding and then all pile on a bus ... or drive home?"

Besides the cottages and suites - which should start at around $250,000 and $150,000, respectively; the prices haven't been finalized - The Wilds will be selling executive blocks of land along the Salmonier River.

Those are expected to go for $100,000.

It's expected people who buy those - which will be known as the Riverview Lots - will live there year-round, but they'll still have the option of putting the property in the rental pool.

"We've had a lot of inquiries from golfers coming up on the 18th hole, looking on and saying, 'Can I buy I lot?'" Coombs says.

With the once-promising Humber Valley Resort bankrupt and dismantled, the owners know some will be skeptical of their Wilds idea.

Bishop says their project is different because they have an established business base and they are catering to it.

"We're not looking to sell these things overseas," he explains. "If we had to build this to try to sell it to England or New York or what have you ... I don't know if we've be going ahead. We've got local market and got a lot of friends we've bounced this off and we've had a lot of people already contact us and say, 'We want one. We want one.'"

"We're going to be selling these for the value that they would command in this marketplace, which is very different than Corner Brook" Coombs adds. The land was sold for a lot more than a piece of land would have sold for in that marketplace."

The risk, he says, is being diminished because the development will be shared by multiple owners.

He says they won't commit to any large-scale construction until they have a commitment to build 50.

"And our plan to mitigate the risk, to either the investor as well as ourselves, is to pre-sell these. We're going to pre-sell 50 units and then we'll start building them," Coombs explains, adding the economy in the St. John's area is ripe for such investment opportunities.

Bishop, Coombs and crew hope to sell the units over the winter and then break ground in the spring. They expect construction will continue over 2010 and 2011.

"Whether it's April or May or March depends on the weather," Bishop says.

Bruce Sparkes, chairman of Hospitality Newfoundland and Labrador, said his organization welcomes the resort property tax credit because it provides incentives and encourages investment in the tourism industry.

However, he notes he would like to see such a program introduced to assist existing operators in upgrading their sites.

"While new is nice, we've got the people that have been fighting here for years to stay alive and it'd be nice if there was a program to help them," Sparkes says.

Monday: Welcome to the Fields of Athen-ry, another developer's vision to avail of the resort property tax.

sbartlett@thetelegram.com