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Statement from Oak Island

OakIslandLogo2021
Four Seasons Island Resort statement regarding the possible sale to Sifton RM
 
In order for the taxpayers in Sifton RM to contemplate the possible purchase of the resort we feel we need to release as much information as possible. With the current covid situation the type of open meetings that we all would normally attend are not possible for some time. In lieu of that and the fact that the RM has signed a confidentiality agreement and is limited to what they can say we can fill in a few details prior to public meetings.
 
First a bit of history for those not familiar with our involvement on the island. When we started our resort project some 15 years ago the decision to purchase it was based on having our own campground as part of our RV business and to try and make the island the best we possibly could. The decision was made at the time to replace and upgrade campground electrical, water and sewer infrastructure, add more campsites, rental cabins and add the pools and build the office and renovate the store. We also decided to build a real quality golf course so we hired Les Furber, one of Canada’s best to design and build the tees and greens and oversee our building of the fairways. We decided to build Riels for tournament use, weddings, and to make the whole place a real destination.
 
The full estimate from Furber to build the golf course was 19.4 million. Through buying our own equipment and doing most of the bull work ourselves along with the help of a lot of skilled local people we managed to get it operational in 3 years for just over 10 million, not including the Riels restaurant and office building. Three phase power was brought on to the island for the irrigation system and to accommodate existing and future cottage and campground development. At the end of the day, $22,000,000 was spent on construction and getting operational and getting the facilities to where they are today. This construction still left enough area east of the existing campground to reach a total campground of 1000 campsites some day in the future. There are also three more areas for future cottage lot developments plus just about a mile of lakefront between the marina and Cherry Point with a very large development plan for some future date.
 
We calculated that the project would reach break even in 10 years and Four Seasons would retain a great asset value in undeveloped property. This would be a good long term diversification for our RV business. It seems we did a much better job of the construction than we did running the place in the first number of years and then the big flood really set things back another notch. After the second 500 year flood and some serious financial losses Rob Denolf, one of the senior partners, stepped in and got expenses controlled, got key people in key positions and things managed properly and it quickly turned financially positive.
 
Don Gray, Rob Denolf and myself were the Four Seasons partners with the development dream that have been physically involved in the resort project from the beginning. Kent Plaiser our other senior partner along with Alex Renard are overseeing our RV operations. They are focused on expansion in that industry with recent acquisitions in Regina, Winnipeg, and Medicine Hat and don’t have the time, experience or a real desire to get involved in resort operations. With Don and Rob both retiring we now need to decide the best move forward for the resort.
 
Relevant facts
 
Four Seasons Island Resort is not and never has been in any sort of financial trouble. While we did have some earlier years of fairly significant start up losses the operations more recently have been very stable and quite profitable.
 
The most recent 2018 two inch thick Certified Appraisal done by a Manitoba professional appraiser for all the real estate we own was $19,388,000 with no equipment or value for the business included in that number. The RM has that appraisal.
 
Jordan Fillion, our real estate person, just did a listing of all the cottage lots and valued them based on most recent like property sales. Two of these sales were in 2021 so they are very current. Total cottage lot value we own based on current sales is $8,814,500.
 
The Manitoba government assessment of the campground, golf course and marina is $6,367,000. Assessment value is typically below market value.
 
The deal we are working on with the RM is officially an asset purchase but in reality it is a turn key business deal with managers in place, staff, computer systems, inventories, golf course equipment, and basically everything included on the island.
 
As a point of interest the Century 21 realtor listing of 9.6 million is intentionally very vague with no golf course equipment, no business, systems or inventories and other deletions to be able to advertise a price under $10 million to generate initial interest.
 
Oak Lake resort area now generates more than $500,000 in annual property tax revenue which is more than 25% of all tax revenue for the whole RM. The RM expense at the lake is very low resulting in a high net return.
 
As a comparative the whole town of Oak Lake generates less than $200,000 in annual tax revenue.
 
Rural municipalities all over Manitoba are now looking for opportunities to increase revenues in other ways as they get caught in the squeeze between a continual increase in operational costs and maintaining reasonable tax rates to their existing residents.
 
Relevant Questions
 
Are all Sifton taxpayers getting some benefit already from lower taxes or increased services generated from lake area tax revenues?
 
Is the RM’s interest in getting into "private business” or looking at leasing or selling the different entities and or looking at a much bigger picture?
 
Can the RM do critical infrastructure projects that would be much more difficult for us such as sewer line to lagoon, moving waste transfer site and others?
 
Since we listed the resort for sale we have had a number of different possibilities. Some not so favourable. The ideas that are most lucrative from a business perspective are quite often not what’s best for the overall resort. The control of property and business development in an entity the size the resort has become would be best controlled by the the residents through their vote.
 
While we look at our options “what is best for the lake” is what is going to be best for our customers and will be best for Four Seasons in the end. Hundreds of people have made very large investments on the island. We have hundreds of Four Seasons RV customers in the campground. The people that rent their property, campers, golfers, and fisherman all have a stake in the resort. Many have made Oak Island their retirement location choice based on the amenities there. With that trust comes a level of responsibility that we we don’t take lightly and we look at all options very carefully. The development potential of 1.5 kms of lakefront and large areas of undeveloped lands on the island creates excellent long term development potential. That and eliminating the future risk of undesirable development and negative tax revenue consequences by getting development control into taxpayers hands is the most valuable part of the potential deal to the RM as we see the future.
 
Oak Lake was an oasis on the prairies before man walked the planet. When man did enter the picture (archaeological sites date back to at least 6000 years ago) it was a magnet that provided food, water, wood and shelter all in one package on a harsh and unforgiving treeless prairie landscape especially in the winter. The long term forward potential of this very significant historical, geological and recreational area seems to have no end in sight.
 
 Thanks,
 
Oak Island Resort
Peter Dillon
 
 

Contact Info

Oak Island Resort: Box 1749, Virden, Manitoba R0M 2C0 (Get Directions)                           

 

Proshop: (204) 855-2262 Ext. 2

 

Campground: (204) 855-2307

 

Marina: (204) 855-2560

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