With Terra Nova Resort in receivership, landowner Parks Canada watches and waits
As Terra Nova Resort moves through receivership, the federal agency that owns much of the land occupied by its golf courses is keeping a close eye on things.
Bill Brake, a superintendent with Parks Canada for Eastern Newfoundland, told CBC's St. John's Morning Show that Parks Canada — which leases land to Terra Nova — was told Nov. 6 that the resort was heading into receivership.
The lease, which includes land used for almost the entirety of the 18-hole Twin Rivers golf course, began in 1990 and expires in 2031.
"What that does mean, is that right now 17 holes of the 18-hole golf course is on Parks Canada land," said Brake.
"Typically, the way leases are structured, long-term leases, generally there's a minimum rent and that's a basic that must be paid every year. And then if revenue exceeds a certain amount, that may go up. In the case with Twin Rivers, the annual rent was in the neighbourhood of $56,000 a year to Parks Canada for the golf course."
BDO hopes to find a buyer
Accounting firm BDO has taken control of the resort and is assessing it in the hopes of finding a buyer. Brake said when Twin Rivers entered a mortgage with the Business Development Bank of Canada in 2003, Parks Canada completed a letter of undertaking with BDC themselves.
"What the means is that for us, is that should BDO or BDC be able to find another operator, we'll give full and fair consideration to the continuation of the lease with that operator," he said.
"In other words, they have the right to assign the lease if need be."
For the record, it's just the opening hole — a par-4, 423-yard dogleg right — that's not on Parks Canada land.
"Essentially, in the late '70s, the government of Canada and the government of Newfoundland agreed at the time that they would develop a golf course in the province in a national park. And then in the early '80s, the land was actually added to Terra Nova National Park for this golf course."
Asked whether Parks Canada would consider taking on operations for the golf course, Brake said while there are golf course in national parks across the country, they tend to be run by third parties with long-term leases like the one they have with Twin Rivers.
"We certainly don't have the capacity to operate a golf course. It's not something we've ever done in this province, and it's not something we see the need to undertake."
As the lease is still valid, Brake said, Parks Canada hasn't considered yet what it will do if another buyer or operator doesn't come along.
"We understand the golf course is a significant draw for the region in terms of tourism," he said.
"It's a tremendous asset for the region, a significant asset for the park, and obviously we're hopeful that we can work closely with BDC and BDo to arrive at a good outcome here."
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