Blue Ocean Golf Club is seeking an extension of its lease to 99 years and the purchase of 1.01 hectares of land to build a resort-hotel on golf course lands in Sechelt.
Blue Ocean currently holds a golf course lease with about 50 years left on it, but a longer lease is needed to satisfy financial lenders and pave the way for some major golf course improvements.
Chinese investor Owen Wang signed a lease with the District of Sechelt for the golf course in March 2014 and at that time he said he planned to put in at least $2 million worth of improvements to the clubhouse and golf course.
In addition, he planned to spend millions more on a new 150-unit hotel/spa, but investing millions into a new hotel without owning the land underneath is a sticking point.
“Two-thirds of the golf course is a Crown grant to the District of Sechelt (DOS) so we own it in fee-simple, but there is a covenant on it called a reverter that says if it isn’t used for golf course purposes it may go back to the province. The other third is a Crown lease to the District of Sechelt for the golf course,” said acting director of development services Mike Vance.
Vance noted the hotel Blue Ocean plans to build would be situated on land owned by the DOS.
He explained that the DOS subleases the Crown lease portion and leases the Crown grant portion to Blue Ocean, and for the past several months the DOS has been renegotiating both of those leases with the golf course operator.
“We’re renegotiating the terms of how the golf course is operated, which will include public access to tee-times, the green fees and the term of the lease. So we’re currently going through all of those right now,” Vance said.
However, one part of those negotiations has to be OK’d by the province – the transfer of title of the 1.01 hectare parcel, which is to be the site of the new hotel/resort.
“The land has that reverter, so if it’s not used for golf course purposes, the Crown has to either amend the covenant or remove the covenant to permit a hotel at the golf course. So that’s the process we’re going through now,” Vance said, adding that part of the process includes consulting with the Sechelt Indian Band.
Another issue being negotiated between Blue Ocean and the DOS right now is the possible supply of reclaimed wastewater to the site for irrigation purposes in the drier months.
Blue Ocean consultant Bob Heaslip said those talks won’t be a deal breaker for the lease renegotiation, but it “makes sense” to have the discussion at the same time.
“It is part of the discussion but it’s separate, so in other words it’s not an inherent part of the discussions about the lease,” Heaslip said.
He explained the possibility of accessing reclaimed wastewater for irrigation purposes is appealing to Blue Ocean.
“For the last couple of years, we’ve had pretty much drought conditions, and when it gets to that point we need water in a key period of about 120 days from June to September,” Heaslip said.
“We can purchase water from the [Sunshine Coast Regional District] but if it gets into a Stage 3 or 4 drought, they won’t sell it. So in order to have a greener looking golf course during that key period, we are exploring with the District the idea of extending through piping up to a reservoir the reclaimed water, and that would get us through that key 120-day period.”
Heaslip said Blue Ocean’s hope is to have negotiations wrapped up with the District “within the next several months.”
