Mill River project 'tainted' by political debate, says new owner

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Mill River project 'tainted' by political debate, says new owner

Mill River project 'tainted' by political debate, says new owner

The new owner of the Mill River Resort says he's "disappointed" with the debate in the P.E.I. Legislature over the sale of the former government-owned golf course, fun park and campground.

In January, government announced the sale of the properties, along with the former Rodd Mill River Resort hotel, to businessman Don McDougall.

The sale was debated all week in the legislature, with the Official Opposition characterizing it as a "sweetheart deal" offering up government properties at "fire-sale prices."

Responded to request

"The implication is … that somehow or other the current government had something to do with that," McDougall told CBC News.

In fact, he said his company responded to a request for proposals issued under the government of Robert Ghiz in 2012.

"We responded to an RFP that was open to everybody, not just in West Prince, the Island, but the world. We put in an offer. We assume it was the highest because we won the RFP. So any suggestion somehow or other that we should have paid more … is just nonsense."

Deal put off

McDougall said the deal was finalized under the Ghiz government but was put off when Ghiz decided to step down as premier, and again in advance of the 2015 provincial election.

This week, the Opposition revealed in debate in the House that, within a week of the deal for the properties closing in late February, McDougall was provided with a grant from the P.E.I. government worth $500,000.

That's also the amount McDougall paid for the properties.

"Why did you give away a golf course and not even get the buyer to put five cents of their own money into it?" PC MLA Steven Myers asked during question period Wednesday.

Government and McDougall say the grant was to pay for capital improvements, not to offset the purchase cost. 

$3 million at stake

He said he has $3 million of his own money at stake in the project, including $1 million committed to capital improvements, the $500,000 purchase price, and another $500,000 he'll have to pay as a penalty if he converts the property to any other usage over the next 20 years. He said he's also tied up another $1 million to secure financing.

"And it's at risk, and the only way we get it out of the risk is if we cause a business that's losing $870,000 a year to turn around to be profitable, sometime in the course of the next four-and-a-half, five years," McDougall said. 

McDougall said his initial bid was only for the Mill River golf course, campground and fun park. But as a condition of the offer, McDougall said "we wanted to know what would happen to the [Rodd Mill River] Resort. …In the process of trying to determine that, the government undertook to persuade us to take on the Mill River [Resort] property."

Forgave Rodd debt

In order to include the Rodd hotel in the deal, government said it forgave $1.8 million worth of Rodd Resort's debt held by the province.

The condition of the hotel was, McDougall said, "charitably ... fully-depreciated."

McDougall said a deal struck was for his company to invest $1 million in capital for repairs and improvements to the hotel against $6 million offered by government. McDougall said that money will be spent over the next 30 months. Any further capital costs will be his responsibility, although he said there are no current plans for any further investments.

McDougall characterized the continuing debate over the deal in the legislature as an attempt to "taint what I think is a very important economic development project in the west end of the Island."

"I had a little experience with Slemon Park, and the success of Slemon Park was because all parties worked together to make it happen. And quite frankly, all parties should be working together to make this happen."

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