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Beecher Bay First Nation listed as largest creditor of its housing companies

The nation — a limited partner in one of the Spirit Bay companies and the sole shareholder of another — has told the court-appointed receiver that it is owed $3.2 million
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The Spirit Bay development on Beecher Bay First Nation lands includes about 50 waterfront homes. DARREN STONE, TIMES COLONIST

The Beecher Bay (Sc’ianew) First Nation is listed as the largest creditor of the companies responsible for the Spirit Bay development on reserve land in East Sooke.

It’s also a limited partner or sole shareholder in those companies.

The nation has told the court-appointed receiver that it is owed $3.2 million.

Scala Development Consultant Ltd. of Langford, which built many of the approximately 50 colourful waterfront homes in the Spirit Bay development, says it is owed $1.9 million.

Scala had asked the court to appoint a receiver to collect on an earlier court judgement of approximately $1.86 million for construction work on the site.

Grant Thornton was appointed receiver in B.C. Supreme Court in Victoria on Sept. 24 to oversee and manage Spirit Bay Developments Limited Partnership.

The First Nation is a limited partner of Spirit Bay Developments and the sole shareholder of its general partner Beecher Bay GP Ltd. It’s also the sole shareholder of Spirit Bay’s other limited partner, a numbered company that owns the other general partner, TSD General Partners Inc.

The nation had opposed appointment of a receiver, asking instead that Spirit Bay Developments be dissolved and long-term leases for properties in the development be terminated, because the company was financially and operationally doomed. That request was adjourned by the judge.

The Spirit Bay project, unveiled in 2013, began as a partnership between developer David Butterfield’s company Trust for Sustainable Development and the First Nation. Their vision was a phased development that would eventually have about 500 homes.

Butterfield was brought in for his development expertise but died in 2017. His family is no longer involved in the ­project.

The Spirit Bay community has been operated through long-term leases granted to Spirit Bay Developments, which, in turn, sold sub-leases to the public.

Aristides Cota, co-owner of Scala, said in an interview Tuesday that he remains optimistic about Spirit Bay’s future, having been part of it since its inception.

“We believe in the project. We believe there is a path for continuing the development one way or another.

“Having a receiver will allow the band to have a third-party involved to bring in other potential players to partner with the band and move on with the rest of the development.”

The receiver’s Oct. 4 report says property subject to the receivership order includes 22 sub-leases on Marina Crescent, Hilltop Crescent, Marina Drive, Sunset Place, Spirit Bay Road and Ridgeline Road.

The receiver met with Beecher Bay Chief Russell Chipps and band administrator Ruth Sauder on Sept. 26 to tour the property and start the process of gathering records, the update said.

Due to limited information provided to date, the receiver cannot ascertain the value of the 22 subleases or other assets of the debtor, the update said.

Because the receiver has not received detailed information on the debtor’s liabilities, a complete list of the creditors is not available, it said.

The plan is to continue to pursue the books and records to evaluate the property’s status, the report said.

The receiver then plans to determine the most suitable action to dispose of or sell property for the benefit of the creditors.

Late last year, the federal government announced $5.4 million in funding for the nation to build a community cultural centre.

Crown-Indigenous Relations and Northern Affairs Canada is not planning to try to recover the funds from Beecher Bay First Nation, Carolane Gratton, spokesperson for Crown-Indigenous Relations, said in a email.

“Based on our most recent conversations with the Beecher Bay First Nation and reports received, this project is currently in good standing.”

The receiver and a nation spokesperson could not immediately be reached on Tuesday.

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