Regarding Friday’s editorial and Bill Black’s opinion piece in Saturday’s paper, one can make the argument that the case for a $8.25million provincial loan to assist the owners of the Cabot Links golf resort in the development of the second phase is indeed weak and not completely justified. The “need” for the golf loan is without merit. Mike Keiser is a wealthy greeting card magnate who co-founded Recycled Paper Greetings Inc. in 1971 , developed it into the third largest greeting card company in the U.S. and , when sold in 2005, was reportedly valued at $250million. He is an avid golfer and is known in the U.S. as the “Lord” of the links reflecting his passion for this type of course. With or without provincial assistance, the Cabot Cliffs’ second phase was going to be built as Mr. Keiser has the financial resources to make it happen. Nova Scotians can thank Mr.Keiser for the substantial investment to date in the development of Cabot Links and the resulting economic benefits to the town of Inverness and surrounding area but it is highly doubtful that he “needed” funds from Nova Scotians to carry on with his plans. There is, however, a strong “need” to financially assist local small businesses to expand in order to reap the rewards of the economic resurgence of the town and area. The terms of the loan can be characterized as generous: the rate of 3.6% is below current commercial 15 year mortgage/loan rates. Given that Gov’t. of Canada 15 year bonds are yielding 2.88% and provincial 15 year bonds are yielding 3.92% , lenders would be charging a rate of from 4.88% to 5.88% for a 15 year loan on a golf course. Banks/insurance cos. are not inclined to finance golf courses/resorts because of their specialized operation (revenue flows not a sure thing ) ,their lack of liquidity and competitive pressures. The P.E.I. gov’t. has been trying to unload four very high-end golf courses for three years now. The loan should not have been interest free for three years ( the borrower has the financial means to make full principal and interest payments from day one ) and a repayment period of ten years makes more sense for a golf course loan. Notwithstanding the amount of equity put in to date, these are very generous loan terms which few, if any, Nova Scotian businesses can hope to be rewarded with. Economic development loans from the provincial gov’t. are needed in Nova Scotia but not in this instance. Bill Black makes some good suggestions as to how gov’t. assistance should be granted and whatever party is in power should set about implementing a system of clear ,concise and practical guidelines and criteria by which loan requests can be appropriately evaluated and justified.
Well a golf course may seem an attractive business to some but really it is four to five month business in regards to revenues as opposed to Maritime Steel which is being denied similar funding for a 90 million dollar three year contract. Maritime Steel does not however make for a Photo OP for the premier or a press release. Employed with Maritime Steel on that contract would be about 100 people five days of the week, 52 weeks of the year and all above the minimum wage. Trucking for that contract would involve over 350 tractor trailers annually transporting 12000 tons of Scrap Steel in and 6500 tons of finished product to White Plains New York. This is a considerable revenue source via a 55 ton cargo truck filling up on Diesel every two days for the journey out of New Glasgow. Then there is the subcontractors for this company that include two machine shops making replacement parts for machines in the plant and a company that finishes parts that are too great an amount for the Unionized workers at the plant.
If tourism-boosting is the focus this may be a good way for government to do it’s part. Like you have observed, there is private skin in the arrangement. The measure of success over the next 15 years will be tourist number improvement; so measure them!
While ‘we’ are at it there needs to be several other nodes in the province. If ‘we’ will make those investments, they will come.
Generally speaking, tourists don’t look after themselves – they are looked after by a willing (seasonal) service industry… .
Regarding Friday’s editorial and Bill Black’s opinion piece in Saturday’s paper, one can make the argument that the case for a $8.25million provincial loan to assist the owners of the Cabot Links golf resort in the development of the second phase is indeed weak and not completely justified. The “need” for the golf loan is without merit. Mike Keiser is a wealthy greeting card magnate who co-founded Recycled Paper Greetings Inc. in 1971 , developed it into the third largest greeting card company in the U.S. and , when sold in 2005, was reportedly valued at $250million. He is an avid golfer and is known in the U.S. as the “Lord” of the links reflecting his passion for this type of course. With or without provincial assistance, the Cabot Cliffs’ second phase was going to be built as Mr. Keiser has the financial resources to make it happen. Nova Scotians can thank Mr.Keiser for the substantial investment to date in the development of Cabot Links and the resulting economic benefits to the town of Inverness and surrounding area but it is highly doubtful that he “needed” funds from Nova Scotians to carry on with his plans. There is, however, a strong “need” to financially assist local small businesses to expand in order to reap the rewards of the economic resurgence of the town and area. The terms of the loan can be characterized as generous: the rate of 3.6% is below current commercial 15 year mortgage/loan rates. Given that Gov’t. of Canada 15 year bonds are yielding 2.88% and provincial 15 year bonds are yielding 3.92% , lenders would be charging a rate of from 4.88% to 5.88% for a 15 year loan on a golf course. Banks/insurance cos. are not inclined to finance golf courses/resorts because of their specialized operation (revenue flows not a sure thing ) ,their lack of liquidity and competitive pressures. The P.E.I. gov’t. has been trying to unload four very high-end golf courses for three years now. The loan should not have been interest free for three years ( the borrower has the financial means to make full principal and interest payments from day one ) and a repayment period of ten years makes more sense for a golf course loan. Notwithstanding the amount of equity put in to date, these are very generous loan terms which few, if any, Nova Scotian businesses can hope to be rewarded with. Economic development loans from the provincial gov’t. are needed in Nova Scotia but not in this instance. Bill Black makes some good suggestions as to how gov’t. assistance should be granted and whatever party is in power should set about implementing a system of clear ,concise and practical guidelines and criteria by which loan requests can be appropriately evaluated and justified.
Bob Wornell | August 18, 2013 |
Well a golf course may seem an attractive business to some but really it is four to five month business in regards to revenues as opposed to Maritime Steel which is being denied similar funding for a 90 million dollar three year contract. Maritime Steel does not however make for a Photo OP for the premier or a press release. Employed with Maritime Steel on that contract would be about 100 people five days of the week, 52 weeks of the year and all above the minimum wage. Trucking for that contract would involve over 350 tractor trailers annually transporting 12000 tons of Scrap Steel in and 6500 tons of finished product to White Plains New York. This is a considerable revenue source via a 55 ton cargo truck filling up on Diesel every two days for the journey out of New Glasgow. Then there is the subcontractors for this company that include two machine shops making replacement parts for machines in the plant and a company that finishes parts that are too great an amount for the Unionized workers at the plant.
paul taylor | August 17, 2013 |
If tourism-boosting is the focus this may be a good way for government to do it’s part. Like you have observed, there is private skin in the arrangement. The measure of success over the next 15 years will be tourist number improvement; so measure them!
While ‘we’ are at it there needs to be several other nodes in the province. If ‘we’ will make those investments, they will come.
Generally speaking, tourists don’t look after themselves – they are looked after by a willing (seasonal) service industry… .
Gordon a.... | August 17, 2013 |