The latest chapter in the long running saga of the proposed major development on Bark Lake unfolded behind closed doors at a lengthy Special meeting of Madawaska Valley Council (MV) on June 25. It resulted in a resolution, passed unanimously, the wording of which throws some light on the lack of progress in recent years. Above aerial view. Source lakedistrictrealty.com
For those readers unfamiliar with the history, it should first be noted that this proposed development should not be confused with the ongoing development known as Little Bark Bay, which is also located on Bark Lake. This article concerns the development known as the Lakewoods Resort, a project which was first conceived in 1983 by engineer and developer Gary Medwid who, in 2006, incorporated Lakewoods Resort Developments, Inc. (LRDI) as the vehicle for an ambitious upscale lakefront community. He envisioned using the 1,500-acre parcel of land, which includes five kilometres of frontage on the lake, for three phases of residential properties consisting of a total of 88 single family lots. At its heart eventually would be a luxury lakefront hotel and villas, a golf course and a private landing strip.
Planning permission for this development was granted in 2014 and subsequently LRDI announced that 80 percent of the lots in Phase I had been sold. Following this, advancement of the project then became stalled with the result that, in 2018, MV extended the completion date for the Phase I work included in the original 2014 By-law. This involved construction of the roads (Skead Road and Lakewoods Drive) into the development which were to be assumed by MV after completion.
Last week’s MV resolution recites continued failure to complete the roadworks, resulting in LRDI being served with a Notice of Default on July 13 2020. Since then the township has used some of the money from the developer’s performance guarantee to carry out works such as winter snow clearance and sanding, and to tender for the revised scope of the road. However, following this tender process in February 2021, the township rejected the lowest tender because it exceeded the value of the remaining funds in the performance guarantee. The lowest tender was submitted by Bonnechere Excavating Limited (BEI) and was in the amount of $1,798,685.02.
In an attempt to work around this and following receipt of a legal opinion from Cunningham Swan, lawyers, MV Council has decided to negotiate with BEI as a single source supplier by virtue of them having submitted the lowest bid earlier this year. The Resolution concludes by saying: “due to the deteriorating condition of Skead Road and Lakewoods Drive that council for the Township of Madawaska Valley directs staff and the municipal engineer to immediately engage in contract negotiations with BEI for construction of the roadworks to be funded by the performance guarantee and prepare an agreement for council review and approval to allow for road works to proceed promptly.”
It has not been disclosed how much remains of the performance bond which dictates the upper limit that BEI is faced with, as Council also stated in the resolution:
- “And whereas council is not prepared to expend public funds for a private development and is acting in good faith and in the best interests of the taxpayer and the municipality.”
- “And whereas the municipality will not cover any additional cost overruns in excess of the performance guarantee.”
An online search conducted by The Current reveals that the same land is currently being offered for sale by Lake District Realty with an asking price of $12.9 million.
Is any one able to follow up on what would investors do about their money in this project?
I was quite intrigued by this story and also concerned about it as a ratepayer
so I visited it this afternoon in the pouring rain to have a look for myself
because you can always see a lot by looking!
I took away three observations:-
(1) Gary Medwid, the developer and promoter of Lakewoods, has died (there was a memorial for him on Skead Rd just south of Hwy 60) and apparently with no succession plan or team to carry on, the project has faltered with no one able to complete it as originally planned.
(2) I drove along Skead and Lakewoods right to the end, about ~7 km, and geometrically the road is excellent and comparable to the south paved part of Paugh Lake Rd. However the surface is badly washed out and eroded in parts with a lot of potholing and washboarding due to a lengthy lack of routine maintenance. It actually really needs to be paved and with paving it could support a speed limit of 60 kph. One interesting observation is that apparently some work was started to eventually connect it with Babinski Rd to the south. This would provide an alternative route into Barry’s Bay from the west and a more direct route for ambulances to reach the hospital from the Hwy 60 corridor and Algonquin Park to the west so perhaps it might be possible to find some provincial money to pay for completing this link and for paving the whole Skead-Lakewoods-Babinski route between Hwy 60 and Siberia Rd.
(3) Either the estate or a mortgagee seems to be trying to sell the project in toto to a single buyer who will complete it as planned. If you assume that the vendor is acting in good faith and wants to fulfil their contractual obligations to the Township someone might approach them informally to negotiate a mutually beneficial compromise for completing this roadwork.
Perhaps TMV should offer to build all of the road including into Phase 4 in exchange for all the remaining unsold waterfront lots in Phases 1 and 3 plus give approval to the Phase 4 subdivision. It could then later sell these lots to recoup the cost of building the road and possibly make some profit on the deal. The developer or new owner will at least get a proper municipal road into Phase 4 which they can then sell for themselves plus they will also be able to sell lots in Phase 2 so they would also gain by this compromise. Btw, originally the project was being offered as ~1600 acres for $17.9 million but now it’s being offered as only ~1200 acres for $12.9 million so what happened to the other ~400 acres? Perhaps TMV needs to pressure the owner and mortgagee here by suing under its Notice of Default to get enough concessions to finance completion of the necessary roadwork. In future TMV should stop relying on new cottage subdivisions by dodgy developers for new assessment and focus more on attracting new tourism traffic, in-town retirement projects, and small family-owned manufacturers relocating from congestion in the GTA. It would also help if they created a new Economic Development Committee for this purpose. Just some thoughts….
A further couple of thoughts – I have wondered about the liability of selling lots when it is not disclosed to buyers that the road is still in the private road status and that there is no guarantee it will be taken over? i know that lakewoods is bankrupt and the property is being sold under power of sale, however, I do not understand why as part of this that there are not further steps taken to ensure the road work is completed appropriately. How can we now downgrade what is acceptable to have a road taken over, which is what it sounds like? Does this not open the municipality up to the next time a developer goes plop? So many questions and no answers really. I have explained the road situation to my clients and once most of them understand the status they walk away from it I guess the old buyer beware is really appropriate.
What a mess!
I have a huge concern that with the existing lack of quality in the road work that fixing the road will start to cost taxpayers money. I believe there also were some areas of the road that were built on private property. Maybe this is the time to make a special assessment to all the property owners in the development? I don’t even know if that is possible, but once the municipality begins this work it will be an ongoing drain on already stretched resources.