Sale process for St. Stephen hotel property to open this week
The sale process for a stalled hotel property in St. Stephen will start by the end of the week, the receiver says.
Construction has been at a standstill on a proposed hotel project on Budd Avenue, next to the Garcelon Civic Centre, since the foundation was laid in 2022, according to court documents. In November, a court-ordered receiver was put in place to take control of the property with as many as seven companies filing claims against the developers Spur Line Properties.
On Monday, receiver Paul Pettigrew confirmed that a sale process is going ahead, with the property to be listed by Friday.
"We leave that sales process open, it's going to be between four to six weeks, leave it open for interested parties to submit an offer," he told Brunswick News. "Once we get an offer, hopefully it's acceptable to us, then we'll return back to court to get the sale approved."
With the work of selecting the bid, he estimated it'd take about two months.
On Monday in Saint John Court of King's Bench, Justice Darrell Stephenson, Pettigrew and lawyers representing the parties discussed a motion from Ontario firm Nelkor asking to rank the various creditors. Nelkor said in court documents that it is owed $927,592 from loans issued to Spur Line.
Chris Eisner, representing Nelkor, said that he understands Pettigrew is ready to proceed and he would be willing to hear the motion at a later date.
Stephenson said he was concerned that ranking the creditors in advance would allow Eisner's client to perform a "credit bid," or to use its credit as part of a sale offer. He said that could make the process vulnerable to "aggressive investors" or "vulture funds" as seen in the U.S.
The judge said that once the sale process came to a conclusion, the receiver would bring an order to distribute the proceeds, "and at that point, we'll make a decision about who's on first or if there's a factual dispute."
Stephenson said he will be looking to make sure Pettigrew "has fulsomely canvassed the market" through the sale process, and called his proposed approach "a fairly standard market process."
"The way the design has started with, there may be interest from other parties, but it was put together as a hotel ... design so you're sort of going to have to go where people in the hospital industry would be looking to identify opportunities, right?" Stephenson asked.
Pettigrew told the court he would be canvassing local industry contacts as part of the process.
In March, St. Stephen council discussed the possibility of the sale being delayed for the motion, with Allan MacEachern saying he was concerned.
“I hope a great developer comes in and takes advantage of the property, with the location, and builds a hotel,” MacEachern told Brunswick News in March, saying that the stalled project has held up economic development by deterring other possible hotel proposals.
A Future St. Stephen report at the meeting from interim president Jeremy Barham recommended that the municipality submit a bid, in order to regain control of the property's future.
When asked in March, Barham told Brunswick News he's “eager to see resolution of the court process” and declined further comment.
Andrew Bates, Local Journalism Initiative Reporter, Telegraph-Journal
