RM auctioning off developer’s cottage lots at The Narrows for unpaid taxes

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This article was published 23/02/2016 (3856 days ago), so information in it may no longer be current.

A massive tax sale for 61 cottage lots on Lake Manitoba could be a chance of a lifetime for buyers, but the title holder vows it will never go ahead.

The RM of Alonsa is advertising an auction of cottage lots under the name of Chad Olafson of West Narrows Development Corp., located at the Narrows, the thin channel connecting the north and south basins of Lake Manitoba. None of the lots has cottages on them.

The tax sale is set for 10 a.m., March 17, in the municipal office in the Village of Alonsa. The arrears, dating as far back as 2009, range from $4,000 to $6,200 on most properties, for a total of more than $400,000 in back taxes. An exception is 240-acre parcel owned by Olafson that is $45,000 in arrears. The total bill includes about $1,000 per lot for the tax sale process.

Those tax arrears are the starting point for bids. That means cottage lots could sell for drastically reduced prices. The original list price was in the $30,000 range per lot, but some are much higher. There are four lakefronts that were selling in the $50,000 to $85,000 range. However, numerous lots lack road access or hydro.

Olafson dismissed speculation he has run into financial trouble. He said he’s been deliberately slow in paying because he’s upset the RM of Alonsa won’t help build a dike to protect his golf course and cottage development.

“If worst comes to worst, I’ll pay (the taxes) at the last minute. I guarantee it’s (the tax sale) not going to happen. This is just procedure,” he said.

Not everyone is as confident. Ron Rexer bought his cottage lot outright and took possession from Olafson in 2012. He was shocked to learn his property is one of the cottage lots up for auction. “How do you think I feel? I’m pretty upset,” he said.

Rexer has not been able to obtain title to the property because problems arose with Olafson’s purchase of the land from the original owner, the Gillis family. Olafson said he wasn’t able to make a final payment on the land because a $1-million flood compensation cheque he was expecting did not come through. However, his lawyer assured him it was legal to still sell the properties.

Rexer was notified he owes $5,100 in back taxes. “It’s been a gong show. It’s been a nightmare,” he said.

Olafson said he will pay Rexer’s taxes. He maintained only a few of the 61 properties in the tax sale mirrored Rexer’s situation. Olafson will make the final payment to the Gillis family “hopefully this week or next,” he said. Once the Gillis deal is finalized, property titles will be distributed to the various lot owners.

Olafson blamed the RM of Alonsa and flooding for many of the problems.

Lake Manitoba forms the boundary between the RM of West Interlake to the east, and the RM of Alonsa to the west. On the east side, the RM of West Interlake has constructed a dike to protect the West Narrows Lodge and campgrounds, owned by Olafson’s father, Blair Olafson. The dike also protects 86 cottage lots developed there by Chad.

On the west shore of Lake Manitoba, the RM of Alonsa has not built a dike. “It’s a difficult pill to swallow to see the incredible efforts in (the RM of West Interlake) to protect their tax base” but not in the RM of Alonsa, Olafson said. Olafson said his cottage development has reaped the RM of Alonsa $1million in taxes so far. He maintained a dike to protect the west side and his golf course would wield more taxes for the RM.

He has twice started construction on an 18-hole course, and spent $2.5 million, he said, only to have the front nine holes that border the lake washed away by floods in 2011 and 2104. Olafson is still awaiting about $1 million owed him by the province for flood damages but the compensation has become “stuck on a couple points.”

The lack of flood protection is also holding up construction of cottages by people who bought lots from him, Olafson said. There are 150 cottage lots in the vicinity of the golf course.

Olafson said he offered to build the dike himself at cost in return for tax concessions from the RM. He has the equipment and know-how, he said. The dike would cost about $1 million, he said.

While the RM of Alonsa has received flood program assistance to help protect permanent residents, there is no government money for cottages and golf courses, said Pamela Sul, chief administrator of the RM of Alonsa. It would be a hard sell convincing ratepayers their taxes should go up to pay for a dike to protect the construction of a golf course, she said.

Sul added Olafson has not kept up previous agreements with the RM. The RM is still waiting for Olafson to comply with municipal requirements for wider roads and hydro to all lots on the first subdivision he opened in 2009.

Olafson also sold lots in his most recent subdivision, called Ranch Estates, without first putting in a road, hydro or drainage channels, as the RM requires him to do. The RM is refusing to grant building permits on those 60 lots until he does so.

Olafson had properties up for tax sale in the RM of West Interlake last year before he finally paid his bill.

Olafson can pay the property taxes on the 61 properties right up until the day of the auction, Sul said. Cash, a certified cheque or bank draft is required.

Alonsa is about 200 kilometres northwest of Winnipeg.

bill.redekop@freepress.mb.ca