Two stories emerge in collapse of $7 million Revelstoke Golf Club deal

Revelstoke Golf Club deal between city and Citrus Capital falls apart at last minuted

The future of the Revelstoke Golf Club is once again uncertain after a deal with Citrus Capital fell through.

Everything seemed to be going well. A multi-million dollar deal that would have seen Citrus Capital take over operations of the Revelstoke Golf Club seemed imminent to all sides.

Which is why it’s sudden collapse following a meeting late last month has come as such a shock.

The deal between the city and Citrus Capital fell apart in minutes during a meeting between Larry Shelley of Citrus Capital, and Allan Chabot, the new Chief Administrative Officer for the City of Revelstoke. What has emerged is a he-said, she-said story, with city officials left confused, and Shelley left angry at his perceived treatment.

“I’m a little bit surprised, a little bit shocked, a lot disappointed,” said Mayor Mark McKee after the deal collapsed.

Citrus Capital approached the city in the spring about taking over the golf course. At a public meeting at the community centre, Shelley said his company was seeking to “enter into a lease agreement with the city that would define the way in which the golf course would operate going forward in a way that’s constructive to the citizens of this city.”

Months of negotiations followed. Without a CAO in place, they were mostly led by McKee and Alan Mason, the city’s director of economic development.

On Friday, Aug. 28, Shelley was invited to a meeting with Mason, Chabot and Dawn Levesque, the city’s corporate officer.

He thought he would be presented with a next-to-final lease agreement. Instead, he was given a list of 21 items that needed to be addressed.

According to Chabot and McKee, the list contained items that Shelley was aware of, such as who was responsible for the clubhouse, site remediation and what obligations the city would have.

“I gave him a list that was intended to bring clarity to items that I understand had previously been discussed and canvassed with him, but needed a little more clarity on some of the key business terms,” said Chabot. “We met with the intention of advancing the negotiation of the lease.”

According to Shelley, the list amounted to a “21-point edict” that materially changed the terms of the lease.

“Things like changing the rent, the lease amount we agreed to, terms of the lease, underlying liens and encumbrances — the list goes on and on,” said Shelley.

The end result was Shelley walking away from the table, with no intention of going back. He said the new terms involved setting deadlines on investment, and if Citrus didn’t meet those deadlines, the lease would cancelled. This lack of flexibility was the deal-breaker.

“This all comes down to the attitude of the CAO, pure and simple,” said Shelley. “You have to invite new capital and you have to be creative in how you let that new capital invest itself in the community. You can’t just stamp it with bureaucratic overlay and say this is the way it’s going to be. It’s not the way it’s going to be.”

Mayor McKee, who wasn’t at the meeting, told the Review the list came from the city’s lawyer, who advised the issues be addressed and more information received before moving forward.

“When a lawyer is saying these points have to be clarified and they’re important to the deal, it would be foolish from a council perspective to disregard that,” said McKee. “Our job is to protect the tax payer.”

For Shelley, it came down to the way he was treated by the CAO. Immediately after seeing the list, he decided he didn’t want to deal with Chabot going forward and there was no way to make a deal.

“He was asking us to invest money and remain at the beck and call of his office for the duration of the lease,” he said.

PHOTO: Larry Shelley (left) and James Costello of Citrus Capital Partners.

City officials were shocked Shelley walked away from the deal after it seemed so close. McKee said he felt nothing in the list was a deal breaker, and all the issues could have been resolved through negotiations.

“I felt if we could have sat down with Larry for an hour we could have hammered all these issues out,” he said. “As far as I was concerned, there were no show stoppers there.”

At the same time, he said council needed to be sure the deal was in the best interest of the tax payers.

What exactly was in the deal is not known. The two parties were negotiating towards a 30-year lease that would have seen Citrus Capital invest about $7 million in the golf course. Shelley said the company had plans for other business investments in Revelstoke if the deal went through.

Now, that is all off the table and Shelley blames Chabot.

“The problem that we’ve seen is if we’re being treated this way on what is largely a philanthropic project, if we have to bring other business opportunities to the table and work them through the CAO’s office with that attitude, it’s not worth it,” Shelley said.

McKee said the city was moving forward by convening the golf course task force. He said they will look at some of the ideas presented by Citrus Capital and explore them going forward.

“We’re learning from the vision that Citrus brought to the table, which I thought was pretty incredible,” he said. “It’s given us some real food for thought about the future of the golf course.”

He said his door is always open if Shelley wants to return to the table.

In an e-mail, Heather Duchman, the president of the Revelstoke Golf Club, said they were disappointed about the collapse of the agreement. “Having said this, the golf club will continue to move forward in a positive way in working towards providing sustainable golf in Revelstoke,” she wrote.

 

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