Winnipeg Free Press - PRINT EDITION

Checkered past, viable future for lodge?

String of failure, calamity may finally end

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MINAKI, ONT. -- Winnipeg businessman Rod Carey. The Ontario government. The Four Seasons Hotel. White Dog First Nation. Texas businessman Sadrudin Kassam.

And those are just the owners who failed to make a success of the Minaki resort from 1971 to 2002.

But no one flamed out as spectacularly and literally as Alberta real estate developer Philip Archer, who bought the resort in 2002.

It will be exactly six years ago on Monday (Oct. 12, 2003) that historic 10,000-square-foot Minaki Lodge -- built by log cutters from Sweden and stonemasons from Scotland -- went up in soaring flames.

Today, the grounds are still kept up. The Minaki golf course fairways are still groomed, although the putting greens have been let go. One day this past summer folks were spotted playing doubles on the dilapidated tennis courts. A motorboat was docked at the resort's boarded-up marina as local people showed visitors around.

Then there's the granite hull of Minaki Lodge that still stands -- undressed of all its Douglas fir logs that perished in the fire -- behind a chain-link fence.

The Minaki resort, north of Kenora, is not likely to reopen soon. Its new owner is Cleone Couch, former comptroller for previous owner Archer. She purchased the Minaki resort out of receivership for $2.3 million in 2007. Archer bought it for $2.2 million.

But Couch has a lot on her plate right now. Last June, the Alberta Securities Commission issued a cease-trade order against Couch and her companies, including flagship Shire International Real Estate Investments Ltd., pending an investigation of Couch for fraud, deceit and misrepresentation. The investigation is expected to take at least a year. Couch's old boss, Archer, has had a cease-trade order against him in Alberta since 1991.

Saskatchewan and Manitoba security commissions have also slapped Couch with cease-trade orders, pending an investigation.

Meanwhile, Shire has declared bankruptcy. As well, over 3,000 investors have filed a class-action lawsuit for over $75 million against Couch and her companies. The suit also names Archer.

None of the allegations have been proven in court and no criminal charges have been laid.

A receptionist at the Shire office in Calgary said Couch "is very, very busy" and did not have time to be interviewed. She would be too busy to comment next week, too, the receptionist said.

The Shire name may sound familiar to people in Kenora. It's abbreviated from Archer's former company name, Berkshire International Development Group (NOT to be confused with Warren Buffett's Berkshire Hathaway Inc.). Couch took over the company and shortened the name to Shire, and ran it from the same Berkshire office in Calgary before moving recently.

"We believe she's the front person for Archer," said Jenn Lofgren, the stay-at-home Alberta mom who spearheaded the $75-million class-action suit against Shire. Lofgren and her husband claim they've lost $75,000 from investing in Couch on condo projects in Hawaii and Fort McMurray, Alta.

Money to buy and develop the Minaki resort was raised in Singapore through a company called Berkshire REIT, part of the Berkshire group before it became Shire. The Singapore investors are also wondering what happened to their money and have joined the class-action lawsuit.

The project was called Villas of Minaki. It now goes by the name Winn River Resort ltd in Couch's property portfolio. More information, including court documents and affidavits, is available on Lofgren's blog called The Shire Saga at www.shireinvestor.blogspot.com

Back in 2003, many contractors working on restoring the Minaki resort got their first cheques immediately after submitting invoices and were very impressed. Then they never got paid again.

Two months passed and when they started clamouring for payment, Archer suddenly closed Minaki. Then, on the Thanksgiving weekend, it burned down. The cause of the 2003 Minaki Lodge fire has never been determined. Archer had no insurance.

Contractors expected to be paid $1.2 million by the receiver of the resort but Archer claimed mortgage-holder, Celestine Mortgage, of which he is sole owner, had first dibs with a $5.9-million mortgage. It took a six-year court battle but the Ontario Court of Appeal finally dismissed Archer's argument. Archer is now challenging some of the contractor claims on grounds that they didn't have proper authorization.

It all looks so bad for Minaki now but it can still come back, said Herb Le Grange, the respected hotel operator who got Minaki up and running in 2003 before Archer stopped financing. It still has the golf course (rumour is it will open next year), tennis courts, marina, dockside restaurant, six log cabins, 116 hotel rooms, 1.6 kilometres of Winnipeg River shoreline, and 60 hectares of land. "There's a gold mine there," Le Grange said.

In 2003, just three hotel rooms were halfway converted into condos but people responded. "People would go into the room and the salesman would say, 'Now the kitchen is going to be over here, and the staircase over here,' and people were buying them," said Le Grange, now with Canad Inns. "It was the romance of the place, and the lake, and the history of the place, that sold."

But what kind of shape are those rooms in today? "The rooms are a good size and built on solid granite, so the construction is timeless. It will be the same in 50 years. The hotel had been closed for six years and when we walked in it was like yesterday," Le Grange said. "Turning them into condos or time-shares would be a piece of cake."

bill.redekop@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 10, 2009 A5

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