The company behind Sun Rivers resort community is in default, its operating line of credit maxed out and its bank accounts frozen, according to testimony from its CEO in court.
Rick Siemens, CEO of Sun Rivers Limited Partnership, gave evidence in small claims court on Tuesday in a payment hearing stemming from a default judgment made against one of the company’s subsidiaries last month.
On Sept. 15, a judge ruled in favour of a Kamloops couple that sued Sun Rivers Construction for $11,200 — the cost of faulty stone cladding installed on their home in the community.
The payment hearing was scheduled to determine how the judgment would be enforced.
In court on Tuesday, Siemens said Sun Rivers Construction is insolvent and the parent company’s operating line of credit is maxed out.
“We still have some land to sell,” he said.
“We have some tool inventory of about $57,000. We have some accounts receivable that we need to collect, but at the present time, we are in default with Interior Savings [Credit Union], so they have frozen our bank accounts.”
Siemens said Sun Rivers Construction also owes more than $1 million to trades workers who have not been paid, $650,000 of which is the subject of ongoing court actions.
According to Siemens, Sun Rivers Limited Partnership is going through an internal shakeup.
“We are working through a restructuring of the whole operation,” he said.
“Under that restructuring, there will be some funds injected into the company by one of the partners. Some of that money, plus the land, will be used to try to negotiate a deal with the trade accounts.”
But, Siemens said, the parent company has no cash for the time being.
“It won’t without a further injection from one of the partners,” he said.
“Right now, being in default with our bank, our hands are tied. We can’t sell off anything.”
Sun Rivers Construction was not ordered to make payments to the couple, but Siemens must keep them up to date on the sale of any assets and debt restructuring.
Outside court, Siemens told KTW the parent company is confident it can continue to build out the community.
“We are working on a restructuring,” he said. “We’re working on carrying on with the development.”
The financial struggles of Sun Rivers Limited Partnership are not connected to other companies developing projects in Sun Rivers.
Siemens said the financial struggles of the company won’t impact homeowners.
“Whether the company continues to develop anything or not, it won’t affect the people already living in Sun Rivers,” he said.
“If we don’t do it, somebody else will. It’s fully developable land. Having said that, we have every intention of continuing on.”
A number of real estate agents contacted by KTW on Tuesday refused to speak on the record about what Sun Rivers Limited Partnership’s financial situation might mean for home prices, but city realtor Vince Cavaliere doesn’t think the issues will change anything.
“I don’t think for the most part anybody should be worried unless their money was paid directly to the [Sun Rivers Construction] company,” he said.
“I wouldn’t be afraid of it. Not at all.”
Kamloops and District Real Estate Association president Cyndi Crossley echoed Cavaliere.
“From what I’m told, this will have no bearing on real estate in the community,” she said.
A deal between Sun Rivers Limited Partnership and a private group led by resident Bill Amy for the sale of Sun Rivers Golf Course and Hoodoos restaurant is expected to close before the end of the year. Last year, Amy had had a previous deal to purchase the golf course fall through.
Amy’s plans include a new clubhouse, a spa and revamped dining options.
He also plans to change the name of the golf course to Big Horn Golf and Country Club.
The purchase price is believed to be approximately $2.5 million, more than half of which Amy has secured in $5,000 shares sold to community members.
It is not uncommon for B.C. resort communities built around golf courses to fall on hard economic times. In 2011, Kamloops Lake development Tobiano and The Falls, in Chilliwack, entered receivership. Both continue to operate.
Sun Rivers is home to about 2,000 people living in approximately 900 homes. The master plan for the development includes a total of 4,000 people in 1,800 homes. It opened in 1999 and welcomed its first residents the following year.
Sun Rivers Limited Partnership is owned by a group of investors led by Austrian Martin Zumtobel. The community is located on leasehold land on the Tk’emlups Indian Band reserve and governed by the band. The lease is slated to expire in 2115.
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