September 12, 2016 - 21:21 — Timothy Gillespie
Stellar development pedigree
In a presentation to MODS Council Monday, AtlantiCann vice president Ed Cayer outlined the stellar record Besim Halef and his Banc Group development firm have in successful projects in HRM and elsewhere, including flattering business news features in a number of trade publications.
BOWOOD PROPERTY APPEARS ABANDONED AND DILAPIDATED, PAYING NO TAX REVENUES IN MANY YEARS
Warden asks, "Will he pay his taxes"
Ten times higher bid
Successful Halifax developer Besim Halef (BANC Group) and executives of medical marijuana firm AtlantiCann Medical Inc. are left scratching their heads after the Municipality of Shelburne rejected Halef's bid for the former Boy's School property - now called Bowood - in a tax sale. Halef was one of only two bidders on the distressed property and his bid was ten times higher than the other bid.
AtlantiCann Medical was founded by Halef's daughter Christine and had plans to install a major medical marijuana facility on the property. The firm is waiting for the go-ahead on their project from Health Canada.
That facility was purchased in 2007 through SWSDA under questionable circumstances by Ralston MacDonnell, close associate of SWSDA CEO Frank Anderson.
Frank Anderson legacy
The transaction was one of several which triggered a SWSDA bankruptcy under Anderson and a criminal RCMP investigation. Anderson was charged with several counts of felony fraud and other charges and is serving a sentence of house arrest for his crimes.
The transaction was one of several which triggered a SWSDA bankruptcy under Anderson and a criminal RCMP investigation. Anderson was charged with several counts of felony fraud and other charges and is serving a sentence of house arrest for his crimes.
The Bowood site was purchased in 2007 for $550,000 through a $600,000+ loan to MacDonnell by Besim Halef, who subsequently added $100,000+ to the note and added MacDonnell's luxury home near Chester as collateral. In 2009, the mortgage stood at $778,000, with interest accruing yearly. The debt is now reportedly more than $1,000,000.
Previous owner mired in debt
Over the years, MacDonnell publicly floated several "plans" for the property, including a performance centre, offices, security training centre, seniors and student housing, commercial business park. None of the projects gained any traction and MacDonnell has been consistently in arrears on property taxes for the property, with the most recent bill approaching $150,000. During that time, MacDonnell was also the defendent in a number of lawsuits claiming he had failed to pay for goods or services from a variety of vendors.
Over the years, MacDonnell publicly floated several "plans" for the property, including a performance centre, offices, security training centre, seniors and student housing, commercial business park. None of the projects gained any traction and MacDonnell has been consistently in arrears on property taxes for the property, with the most recent bill approaching $150,000. During that time, MacDonnell was also the defendent in a number of lawsuits claiming he had failed to pay for goods or services from a variety of vendors.
The site now appears abandoned and derelict and the Municipality put the site up in a tax sale, for which there were no takers.
MODS then issued a request for tender offers in the property, which resembles an auction of sorts, with the highest bidder generally acquiring the property, despite the amount of taxes owing.
With the highest bid of $40,000 being ten times another $4,000 bid, Halef presumed that he would acquire the property and that his daughter would locate the multi-milllion dollar marijuana grow-op there, generating a projected 43 employees in 2017 and 139 employees three by 2020.
WARDEN ROGER TAYLOR AND COUNCIL
Stunned by rejected offer
Halef and company were stunned to learn that municipal warden Roger Taylor and his council summarily rejected his bid, but offered no explanation or reasoning for the decision. Halef subsequently informed Taylor that, if the facility was not available as planned in Shelburne, AtlantiCann would operate from one of several large sites his development firm owns in HRM.
Halef and company were stunned to learn that municipal warden Roger Taylor and his council summarily rejected his bid, but offered no explanation or reasoning for the decision. Halef subsequently informed Taylor that, if the facility was not available as planned in Shelburne, AtlantiCann would operate from one of several large sites his development firm owns in HRM.
Beyond comprehension and not "open for business"
This decision, according to an economic development specialist familiar with the region contacted by SCT, appears to send a "keep out, closed for business" message to potential business developers. "Why the Municipality of Shelburne - of all places - would reject the efforts of one of Nova Scotia's most successful and respected developers is beyond comprehension," said the specialist. He also told SCT that, for a municipality that just spent tens of thousands of dollars on a branding campaign touting "we're open for business", the Council's decision sends the exact opposite message.
This decision, according to an economic development specialist familiar with the region contacted by SCT, appears to send a "keep out, closed for business" message to potential business developers. "Why the Municipality of Shelburne - of all places - would reject the efforts of one of Nova Scotia's most successful and respected developers is beyond comprehension," said the specialist. He also told SCT that, for a municipality that just spent tens of thousands of dollars on a branding campaign touting "we're open for business", the Council's decision sends the exact opposite message.
Stellar development pedigree
In a presentation to MODS Council Monday, AtlantiCann vice president Ed Cayer outlined the stellar record Besim Halef and his Banc Group development firm have in successful projects in HRM and elsewhere, including flattering business news features in a number of trade publications.
Cayer outlined the various benefits to Halef's bid and the proposed project. They included the accrual of property taxes, employment and the concomitant disposable income as a result, direct investment in Shelburne, revenues to MODS for services, rehabilitaion of buildings on the property and potential of investment in adjacent properties, including the additional taxable properties that would ensue.
Jobs, investment, production
The 30,000 square foot facility has an projected annual production for 2017 of 1600 kgs rising to 9,000 kgs by 2020. The marijuana has an estimated annual HST taxable production value of $1.8 million for 2017, rising to $10 million in 2017. Construction and re-fitting costs for the former gymnasium at Bowood are estimated at $4 million with start-up costs in year one of $2.4 million. The project is expected to produce 140 jobs by 2020.
The 30,000 square foot facility has an projected annual production for 2017 of 1600 kgs rising to 9,000 kgs by 2020. The marijuana has an estimated annual HST taxable production value of $1.8 million for 2017, rising to $10 million in 2017. Construction and re-fitting costs for the former gymnasium at Bowood are estimated at $4 million with start-up costs in year one of $2.4 million. The project is expected to produce 140 jobs by 2020.
Groundwork of revenue streams?
Cayer explained to Taylor and his council that early involvement in the medical marijuana industry could lay the groundwork for businesses and revenue streams related to a variety of future businesses and revenue streams. "That is one of the key reasons why getting Nova Scotia companies into the game early is critically important," Cayer stressed. With the highest per capita consumption of medical marijuana in Canada, Nova Scotia has yet to see one approval by Health Canada under its new guidelines, put in place in 2015.
Cayer explained to Taylor and his council that early involvement in the medical marijuana industry could lay the groundwork for businesses and revenue streams related to a variety of future businesses and revenue streams. "That is one of the key reasons why getting Nova Scotia companies into the game early is critically important," Cayer stressed. With the highest per capita consumption of medical marijuana in Canada, Nova Scotia has yet to see one approval by Health Canada under its new guidelines, put in place in 2015.
Fair and reasoned decision
The Municipality's call for Tenders on the Bowood property gave them the right to " ... accept any tender or part thereof considered to be in its best interest." Cayer told SCT his presentation and the information he provided Council was purposely designed "to ensure Council members have the information they need to make a fair and reasoned decision in this matter. I believe the over-whelming evidence shows that there is no doubt that accepting BANC's Tender is in the best interests of our community".
The Municipality's call for Tenders on the Bowood property gave them the right to " ... accept any tender or part thereof considered to be in its best interest." Cayer told SCT his presentation and the information he provided Council was purposely designed "to ensure Council members have the information they need to make a fair and reasoned decision in this matter. I believe the over-whelming evidence shows that there is no doubt that accepting BANC's Tender is in the best interests of our community".
Will he pay taxes?
Warden Taylor asked Cayer whether, if he acquired the properety, Halef would "pay his taxes". "Why don't you ask the city of Halifax if he pays his taxes," Cayer responded. Banc Group owns dozens of properties in HRM, on which it pays millions in taxes each year and Halef suggested to Taylor earlier in a letter that, if Taylor had any questions at all about his credentials, he should call Halifax mayor Michael Savage. Savage's office did not return calls made there.
Warden Taylor asked Cayer whether, if he acquired the properety, Halef would "pay his taxes". "Why don't you ask the city of Halifax if he pays his taxes," Cayer responded. Banc Group owns dozens of properties in HRM, on which it pays millions in taxes each year and Halef suggested to Taylor earlier in a letter that, if Taylor had any questions at all about his credentials, he should call Halifax mayor Michael Savage. Savage's office did not return calls made there.
Taylor's question, says the economic development specialist, is insulting in a variety of ways. "To suggest that such a trusted and respected businessman would not pay his taxes is beyond the pale. I think it shows some bias, or at the very least, a lack of judgement."
Town of Shelburne would welcome Halef
When he and his daughter decided to pursue the AtlantiCann project in Shelburne, the first call Halef apparently made was to Councilman and current mayoral candidate Roy O'Donnell. "I guess he had become aware of my very public position that we should pursue medical marijuana firms to establish operations in Shelburne," O'Donnell said. "I told him that I would do anything I could to help him establish AtlantiCann here." Based on O'Donnell's suggestion, the Town sent a letter to a B.C. firm inviting them to consider Shelburne as a location. Asked whether the Municipality's decision to rebuff Halef changed his mind in any way, O'Donnell responded, "Absolutely not. The cannabis industry is going to be a giant, cutting edge industry and I woud be quite interested in discussing possible Shelburne locations with him." O'Donnell added that, should he be elected, he would do everything in his powet to attract Atlanticann or any other cannabis producer to Shelburne.
When he and his daughter decided to pursue the AtlantiCann project in Shelburne, the first call Halef apparently made was to Councilman and current mayoral candidate Roy O'Donnell. "I guess he had become aware of my very public position that we should pursue medical marijuana firms to establish operations in Shelburne," O'Donnell said. "I told him that I would do anything I could to help him establish AtlantiCann here." Based on O'Donnell's suggestion, the Town sent a letter to a B.C. firm inviting them to consider Shelburne as a location. Asked whether the Municipality's decision to rebuff Halef changed his mind in any way, O'Donnell responded, "Absolutely not. The cannabis industry is going to be a giant, cutting edge industry and I woud be quite interested in discussing possible Shelburne locations with him." O'Donnell added that, should he be elected, he would do everything in his powet to attract Atlanticann or any other cannabis producer to Shelburne.
White elephant
A former senior municipal official currently serving on contract with the Nova Scotia government on municipal affairs issues told SCT that, considering the storied history of the Boy's School property, and especially in light of the heavy promotional efforts for their own new business park, in rejecting Besim Halef's offer, the Municipality may be stuck with an unsalable "white elephant" for years to come. Many of the buildings on the property are in disrepair and reportedly infused with mould much of the year. "It's not that often that a distressed property in a disadvantaged area generates the attention of a successful developer like Besim Halef.My guess is that this council will come to badly regret the decision to reject his offer."
A former senior municipal official currently serving on contract with the Nova Scotia government on municipal affairs issues told SCT that, considering the storied history of the Boy's School property, and especially in light of the heavy promotional efforts for their own new business park, in rejecting Besim Halef's offer, the Municipality may be stuck with an unsalable "white elephant" for years to come. Many of the buildings on the property are in disrepair and reportedly infused with mould much of the year. "It's not that often that a distressed property in a disadvantaged area generates the attention of a successful developer like Besim Halef.My guess is that this council will come to badly regret the decision to reject his offer."
Good money after bad?
"By passing up this offer from a bona fide developer and incurring the costs of maintaining a deteriorating building," he said, "the Municipality might just be throwing good money after bad."
"By passing up this offer from a bona fide developer and incurring the costs of maintaining a deteriorating building," he said, "the Municipality might just be throwing good money after bad."
When Cayer asked the Council to reconsider their negative response to Halef's bid proposal, and said he thought they were missing an excellent opportunity to promote economic growth in the area, deputy mayor Norm Wallet pointed to a colourful six-foot poster from the pricey new branding campaign for MODS, saying that the poster "speaks volumes about us being open for business."
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