Jim Sutherland From Friday's Globe and Mail Published on Thursday, Oct. 29, 2009
Leona Snider can pinpoint the Great B.C. Land Bust to the day: September 9, 2008. Until that fateful date, it looked as if the 19 years of work that she’d put into her dream would finally come to fruition. The Rise, her 735-acre hillside development—“the most beautiful spot in the province,” she says—was the first anywhere on North America’s west coast to incorporate a winery component. Above the home sites, climbing toward a mountaintop plateau, was a designer golf course; below, on Lake Okanagan, a private beach club. Estimated build-out: $1 billion. On the day sales opened in 2005, 40 of 53 home sites on offer were snapped up in 90 minutes. After that big bang, however, there was a long trickle. By 2008, Snider realized she needed to rejig units to bring the price down—under $500,000 rather than nearly $1 million. That required hiring new contractors, not an easy thing in the booming Okanagan. “Still, on September 9 we had eight contracts written,” says Snider.
And on that day, her lender, Calgary-based Arres Capital, backed out of the project. Within weeks, Snider was in court seeking bankruptcy protection for some $50 million in liabilities.And so it went across B.C. By the summer of 2009, dozens of retirement and recreational projects involving tens of thousands of homes resided in some stage of panic, resignation or abandonment. The media poster child for the phenomenon was Len Barrie’s Bear Mountain Resort near Victoria. Yet that project, well on its way to a build-out value estimated at $2.5 to $3.2 billion, was in much better health than many of its imitators.(More)
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