Hockey Dorm hits financial hurdle

[fluffy]

...too eager to accommodate the developer by granting permission to start construction...

I think encouraging development in the city is a good thing, especially where it would serve to generate local jobs. As long as the taxpayers' butts are covered financially, why not?

[hoot]

I think you are trying to make something from nothing just because the re-elected incumbants supported a prison.

Again with the prison ,. Clearly you haven't got over Penticton rejecting a prison ...not sure why you always bring it up. Sour grapes maybe.

Incidentally, as to land value , pay a visit to BC assessments and check out the value of parking lots along Eckhardt, they go for over $200k a piece , The city sold 9 lots for 100K a piece in their haste to accommodate this developer. Who I might add was the subject of a CHBC news item last night, regarding monies paid to him by a group of hockey parents to pay for a trip for their kids, the money has since disappeared. Citation ventures have distanced themselves from the guy.

.....just as when you sell a home it is not your job to check the buyer’s financial backing.

Rubbish, I have sold more homes than you have had hot dinners. If a buyer came to me before the financing was in place and said they want to tear down the property to build a new home , there is no way on God`s green earth I would let him proceed. Ever heard of put your money where your mouth is.

Council is only there for direction.

More nonsense, Council is there to protect the interests of the citizens of Penticton , and to make decisions after exercising due care and diligence. Certain councilors were in such a hurry to push this thing through , they cut corners , resulting in the current mess we have to day.

Take a drive past the site, $50k won`t even start to cover the cleanup of that site.
There are rules in place, they are called by-laws, but they are absolutely of new use if council can circumvent them on a whim.

Not sure why you and Fluffy are attempting to defend the indefensible…

Face it, When it comes to property deals, you are both a little out of your depth.

[fluffy]

Not sure why you and Fluffy are attempting to defend the indefensible…

I can't speak for twobits but I don't see this with the same sense of drama that you do hoot. It's not council's job to be doing credit checks on everyone who applies for a building permit, their job is to promote local business and keep the taxpayers' butts covered, which they did. Also, I'm not sure why you think some major clean-up is inevitable, it's my understanding that many of the original proponents of this project are still involved and they will likely just pick up and go from where the project is now. It's not nearly as big a deal as you'd like everyone to think, you really need to learn to relax, you'll give yourself an aneurism.

[Tero]

Disgusting. Criminal. Underhanded. Not surprising. Impeach comes to mind.

Hockey dorm put on ice

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Hockey dorm nets approval
Hockey dorm construction hits financial hurdle
Inaugural event put on ice
Opposition puts development on hold
Breaches put pedophile behind bars
Symposium putting focus on volunteers
By Steve Kidd - Penticton Western News
Published: February 16, 2012 4:00 PM
Updated: February 16, 2012 5:41 PM
The on-again, off-again dormitory project for the Okanagan Hockey Academy is off again, though proponent Loren Reagan still claims he is going ahead with it.

Reagan might have some problems following through, however, as he is currently facing two claims in civil court. One, filed on Feb. 14, claims that Reagan and his partner Michael Elphicke, operating as the Okanagan Elite Hockey Association, have misused more than $100,000 a group of minor hockey parents paid them to organize a European hockey tour.

The other lawsuit comes from Citation Ventures, who were to arrange the financing needed to build the dormitory next to the SOEC, a project that has been stalled since December. Alex Fraser, one of the principals of Citation Ventures, said they had full intentions to back the deal, but became concerned as they examined the deal Reagan was promoting.

“The more layers we peeled back from the onion, and the time and effort we put into this, we realized there is no deal with Loren. We are not interested in doing business with him and we have started an action against him,” said Fraser. “Our intention is to prove that he provided false and fraudulent information to us.”

The two civil suits, however, appear to share financial connections as well. Money paid by the parents for the Europe trip has been used to pay both the City of Penticton and Citation Ventures.

According to Nathan Wahoski, a lawyer with Brooke Jackson Downs in Salmon Arm, the parents became concerned about two weeks ago.

“After these parents had paid over $100,000, after they had done a lot of fundraising, they were essentially contacted by Loren Reagan to say that he was pulling out and that somehow there was a personal falling out between him and the other partner,” said Wahoski.

“The bottom line is that someone took the money and used it for other things, maybe used it for personal reasons.”

The parents have now started a civil lawsuit to recover the money that they paid to Reagan and Elphicke.

“From what we know, it looks like there is about $13,000 left of the money out of over $100,000. It looks like $15,000 was paid to a travel company as a deposit, so a portion of it was used for the trip and there is some money left over, but there is another $100,000 that is not accounted for,” said Wahoski. “We do have cheques that show that the City of Penticton received some money, unknowingly of course. There was some money paid to Mr. Reagan personally for substantial amounts from this account.”

According to Fraser, there was another $20,000 paid to Citation Ventures to cover travel expenses while trying to set up the deal. A copy of the wire transfer Fraser provided to the Western News shows that $20,000 was transferred on Nov. 21 to Citation Ventures from one of the accounts named in the application requesting the court freeze the assets of the OEHA.

“We wanted our travel and expenses covered while we were doing our due diligence for the project,” said Fraser, who said he became increasingly concerned about Reagan’s involvement starting in early December.

“I had a problem with him in the first week of December, we actually walked away from the project,” said Fraser. However, with much of the legwork done and investors lined up, Fraser thought the deal was still worth pursuing. His first concerns were over the length of time it took for Reagan to produce a budget proposal.

“We had issues about the deal from day one: the budget, the concept. We thought we could work through them and that’s what we honestly tried to do,” said Fraser. “We first met Nov. 7 and it was sometime mid to late December, we got what I am going to call my first decent look at a budget.”

Part of Fraser’s concern came from the investment security being offered to investors, including Reagan’s own investment in the project.

“He told us he had a million dollars in this. When we looked at it in December, we realized he had no money invested in this,” said Fraser. “The more we looked and dug, we didn’t see any money in the deal from him.”

Reagan, however, paints a very different picture of the situation. He said the money for the Europe trip was not misappropriated, and that the money he used from it only amounts to his company’s profit from the deal. It is none of the parents’ business, he said, how the company spends its profits.

That lies in harsh contrast to the parents’ claim in their suit that the trip was being organized on a non-profit basis, and that neither Reagan or the OEHA would benefit. The parents’ group also contends that their expectation was that the monies paid would be used exclusively for costs and expenses related to the European tour.

“They entrusted these individuals with the money. The partners, however, are saying that it is a business and the parents paid the money over to a business. If it was wasted, that is poor business practices, but it is not fraud,” said Wahoski.

“It’s absolutely nobody’s business. The parents can’t tell me, the courts can’t tell me, the RCMP can’t tell me how to spend the profits of my partnership,” said Reagan, who also claims he didn’t know there was to be any profit until January, two months after he transferred the $20,000 to Citation Ventures.

Like the hockey dormitory, Reagan said the European trip is still on, but the parents need to pay more money, and that as of November, they were behind in payments.

“They are short $49,000 on their financial commitments up to Nov. 1,” said Reagan. “Did we use more money than there was profit in the trip? I don’t know, I know what I used.”

The picture Reagan paints of his relationship with Citation Ventures is even less flattering. He contends that far from Fraser and Citation pulling out of the deal, they haven’t lived up to their commitments.

“I fulfilled my obligations to Citation Ventures,” said Reagan, adding that included signing personal guarantees and giving the company shares for security. “I forfeited a $50,000 deposit to the city when they didn’t close on Feb. 1. They never fulfilled their commitments on their term sheets.”

“Mr Fraser is not pulling out of the project. He has been relieved of any contractual obligations by me for failing to complete his commitment,” said Reagan. “He’s fired, he didn’t do his job.”

Reagan said he is working with new investors to find backing for the project, adding that Penticton Mayor Dan Ashton has told him the city, which owns the land the dormitory is to be built on, will entertain a new proposal from him.

“There is no offer on the table whatsoever,” said Ashton. “I told Mr. Reagan that yesterday. If he wants to come forward, he can, but due to the circumstances we are hearing about, there will have to be lots of clarification. I will have to see this stuff resolved before he comes forward.”

Reagan’s original proposal was fast-tracked through the city’s application process in the fall, and though this deal has been fraught with problems, he stands by the city supporting desirable development projects in that manner.

“There is always hindsight. Unfortunately this has turned into what it has turned into,” said Ashton. “We worked very diligently to see that this project could get into the gourd before the winter, because of the zoning required. We also worked very diligently to see that the citizens were protected, and that’s what we did.”

[hoot]

“

There is no offer on the table whatsoever,” said Ashton. “I told Mr. Reagan that yesterday. If he wants to come forward, he can, but due to the circumstances we are hearing about, there will have to be lots of clarification. I will have to see this stuff resolved before he comes forward.”

Will some one close the stable doors and where the hell is the horse . !!

Bet some defenders of this deal are feeling a wee bit sheepish round about now.

[Tero]

Rubbish, I have sold more homes than you have had hot dinners. If a buyer came to me before the financing was in place and said they want to tear down the property to build a new home , there is no way on God`s green earth I would let him proceed. Ever heard of put your money where your mouth is.

No DOUBT! Right after we took ownership of our latest house, we cut down a tree in the yard and ripped the deck off the back of the house to build a new one. Think they would have let us do that before we had FINANCING and a closing date come and be met??? I don't think so! Even though we'd given a down payment. On an interesting note, we had gotten preapproved, and at the last minute the bank didn't like something in our financing, and we had to go to another bank! Good thing we waited to cut the tree down!

[fluffy]

Hmmm, maybe this is a bigger deal than I thought.

[BriTer]

Hmmm, maybe this is a bigger deal than I thought.

It's the humidity : /

[fluffy]

http://www.chbcnews.ca/bc+parents+launch+lawsuit+against+okanagan+elite+hockey+group/6442582453/story.html

[fluffy]

http://www.youtube.com/watch?v=-TWwLa8zah0

[twobits]

Face it, When it comes to property deals, you are both a little out of your depth.

Playing the big shot now eh Hoot? Hot suppers . While I can't speak for Fluff, I am quite certain you have nothing over me in Real Estate interests or property development. I've probably forgotten more about it than your total sum knowledge. Your critique of this city situation confirms this. Ciao

[twobits]

http://www.youtube.com/watch?v=-TWwLa8zah0

This guy sure seems to be a shyster but from everything I understand to date, the city is covered. The problem with this guy is between him and the other financing partners. It is them who were apparently lacking in due diligence as well as the contractors. These silly examples of closing dates of houses and cutting down trees or demolitions are not apple to apple comparisons. If there had been a usable asset on the lands that was demolished then perhaps yes but this was raw land and only earthworks were permitted to commence.

[fluffy]

I was thinking that there is some thin ice here if it ends up that the deposit on the property was paid with the funds allegedly misappropriated from the hockey parents and their European trip. Thin ice both legally and morally, the City may not be totally in the clear yet.

[twobits]

I was thinking that there is some thin ice here if it ends up that the deposit on the property was paid with the funds allegedly misappropriated from the hockey parents and their European trip. Thin ice both legally and morally, the City may not be totally in the clear yet.

The hockey funds are a civil issue between the parents and the shyster. It would be impossible for the parents to attach any claim to the deposit funds just as it would be impossible for the gal in the video who sued, and recieved a judgment, over the sale and rental of her home. If for example, he did forward the hockey funds to the development group in exchange for shares or an interest in the project, they might be able to recover from his interest or shares in the group as an asset target, but there is no way they could follow the money to the city. Moral issue? Only if the city had an inkling that the deposit monies were misappropriated funds and even that is a stretch. That's like saying the city should have a moral obligation to pay unpaid subtrades who have been stiffed on bankrupt projects out of development cost charges. They start that sort of thing and there would be plenty of outstretched palms.

[fluffy]

I agree it's a tangled web, but sometimes the difference between legal and moral obligations turns into a major issue in the court of public opinion. Suppose for a moment that the money on deposit left a trail that does in fact lead back to the hockey parents. Even if there is no legal obligation on the city's part to make this money available, what kind of a day could a bunch of disgruntled drama queens have in the media with the idea that the money is sitting there in City coffers while the hockey kids sit with tears in their eyes?