Holman Grand hotel sold

Ryan Ross
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The Holman Grand hotel will soon re-open for business after Homburg International bought it and four other buildings in downtown Charlottetown.

Homburg International announced the deal Wednesday in a news release that said it was buying Hardegane Investments, which owned the properties.

The acquisition also includes the Confederation Court Mall, the National Bank Tower, BDC Place and the Homburg Financial Tower.

In the news release, Homburg International chairman Richard Homburg said the deal means his company can reopen businesses, bring people back to work, generate economic activity and consolidate its corporate presence in Prince Edward Island.

“We are gratified that the province has supported us in this and we look forward to contributing valuable and successful properties and relationships in the community of P.E.I.,” Homburg said.

Last year, the hotel’s former owner, Homburg Invest Inc., shut it down after what it considered unsustainable losses while the company was restructuring under creditor protection. That restructuring left many creditors unpaid, including the provincial government and contractors who worked on the hotel during its construction.

A meeting of Homburg Invest Inc.’s creditors is planned for later this month where they will vote on a settlement plan. That plan likely won’t see every creditor paid all they are owed and Homburg International plans to review any remaining claims after that repayment process is finalized.

“We are gratified that the province has supported us in this and we look forward to contributing valuable and successful properties and relationships in the community of P.E.I.,” Richard Homburg

Homburg International will make goodwill payments to the remaining creditors where appropriate, the news release said. To do that, Homburg International says it has $1.75 million earmarked for creditor repayment.

Richard Homburg has not been involved in Homburg Invest Inc.’s management since March 2011.

Homburg Invest Inc. sought creditor protection in September 2011.

Although they both bear Richard Homburg’s name, Homburg Invest Inc., which is a public company, and Homburg International are separate businesses.

The news release said Homburg International plans to re-open the Holman Grand immediately, start hiring staff and accept bookings.

Prior to the sale announced Wednesday, Cominar REIT owned Hardegane Investments, which in turn owned Dyne Holdings.

Dyne Holdings owned the hotel and the other properties Homburg International purchased.

There are outstanding loans with the provincial government on some of the properties and the news release said they will be preserved without any write-downs in public money owed.

 

rross@theguardian.pe.ca

twitter.com/ryanrross

 

 

Organizations: Homburg International, Homburg Invest Inc., Holman Grand hotel Hardegane Investments National Bank BDC Dyne Holdings Cominar REIT

Geographic location: Charlottetown, Prince Edward Island

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Recent comments

  • Bill Kays
    Bill Kays
    May 24, 2013 - 13:44

    Where is the public outcry over this fiasco? Without us getting upset and telling government that enough is enough, these types of pillaging of the public purse will continue. Can you not hear Roach kicking back with his feet up laughing at us poor souls? How can he even hold his head up in public, or any of our so called cabinet members? Unbelievable. But hey, if all they have to do is create or use another company name to rape us again, so be it. You might take it but I am not.

  • Ed
    May 23, 2013 - 15:40

    A lot of people are going to go to bed tonight having satisfied themselves that they've made a difference with their slanderous comments. Sleep well small minds

  • ed
    May 23, 2013 - 13:40

    i wonder how many of the people who write this crap actually have jobs .most of the posts were submitted during working hours .are they all retirees with too much time on their hands??

    • Bill Kays
      Bill Kays
      May 24, 2013 - 12:25

      Ed, what is your point? Are you complaining about the government workers that comment here during working hours or you complaining just to complain? Whether I say a lot or you say a little, what's the difference if we can convey our point? MY MIND IS AT LEAST AS BIG AS YOURS, or was that another part of my anatomy. If you were to stop and think for a moment ... oh yea, people work and sleep shifts, I forgot.

  • Negativie, negative and negative
    May 23, 2013 - 13:04

    I am not surprised at the negative comments here. It is no wonder the Island is carrying a debt. Nobody would want to do business here with all the negative views. Most of the commenters here do not even know what they are talking about.Read the story carefully and if you do not understand parts of it I would suggest you have someone explain it to you. Richard Homburg is not the same person who drove the hotel into creditors protection and never paid the suppliers. It was a company he was once the Chief Executive Officer for. He was forced to step down and when he did he handed the reins to someone he trusted. This person put the Holman Grand into creditors protection. The Homburg Invest bears Mr Homburg's name and that is all. Mr Homburg is a man of his word. He is an honest person. Time will tell and when you people realize what Richard Homburg stands for I know you will eat your words. He has been in business for a long time. Never once did he ever have negative comments about the way he did business. His business ventures and his name were highly respected until he handed the reins over to a man he trusted. Mr Homburg's biggest concerns during this whole fiasco were the taxpayers, companies and the people that never got paid. Why is he taking over the short fall from Homburg Invest and paying the suppliers? Beacuse he is an honest person. He created his own company from the ground up,, he is a very smart business person. He will create employment for Prince Edward Island and he will also invest in he Island. I for one am happy to see this fiasco get cleaned up and most importantly see Richard Homburg do what he promised after Homburg Invest created this whole mess. Watch and learn.

    • intobed
      May 23, 2013 - 13:39

      You are right, Negative. And I am sure when the investigation is over, Mike Duffy will again be an honest man, who only did the right thing. Sure.

    • Huh?
      May 23, 2013 - 14:01

      Just a question: Clearly, you are not the "you people" to which you refer, so who are you and how can "us people" validate your claims?

  • Come On People
    May 23, 2013 - 11:26

    What a positive move for the city of Charlottetown and P.E.I.. It is so important to have a vibrant city centre, capital city and Birthplace of Canada! Jobs in service, office, retail etc.. will not be lost and the tax base will not be eroded forcing Islanders to pick up the slack. I am also surprised at the negative comments towards a business man who is willing to take the risk and pick up the tab on these properties rather then have them go into default and leave the taxpayers "on the hook". I also commend him for committing to pay off the contractors that were left hanging by Homburg Invest. There were no Island businessmen willing to do any of the above. It's time to move forward and support our fellow Islanders who work and conduct business on P.E.I. - this helps everyone!

    • rent seeker
      May 23, 2013 - 12:43

      Homburg took very little risk... a majority of the funding for the hotel came from the province. After the bankruptcy, he's now buying it back for far less than it cost to build, leaving creditors holding the bag. The risk would have been if he'd gone ahead and built the thing putting his own capital at risk, not that of PEI taxpayers.

    • Yeah Right
      May 23, 2013 - 13:07

      This has been a paid (off) public service announcement.

    • Come On People
      May 23, 2013 - 13:54

      Mr. Rent Seeker, Mr. Homburg's risk is investing in paying the contractor's that were owed by another company and going forward with upgrading and investing in these downtown buildings rather then allowing them to go into default and be picked up from the tax payers for fire sale prices while throwing hundreds of Islanders out of work.

    • Townie
      May 23, 2013 - 14:09

      Come on Come on People. His risk is not investing in paying the contractor's that were owed by another company, he is not even paying in full what HE owes those contractors. Just because he's using a company with a different name doesn't make him right, honest, or a good business person. His company paying less than it cost for his other company to build the hotel isn't good for the economy of PEI or its residents. Don't pee on all of our legs and tell us its raining.

    • Come on People
      May 23, 2013 - 21:20

      The only one peeing on legs is people like you Townie. I'm all for keeping jobs, a tax base and investment in Charlottetown. You on the other hand, regardless of the facts, continue to spread misinformation.

  • Observer
    May 23, 2013 - 11:20

    Wow, Homburg has these politicians and bureaucrats mezmerized. This whole deal reminds me of one of those magic tricks with the cups and the ball. The sad thing now is that one can assume the province is even more entangled in this mess and that our precious tax dollars are being poured into this bottomless maw. Unbelievable. Who is making these decisions? What kind of expert advice are they following?

  • waitaminute
    May 23, 2013 - 10:48

    If some contractors will not be paid, I would suggest they be gifted shares in this marvelously successful business venture, they said, tongue in cheek.

  • ed
    May 23, 2013 - 10:36

    Did any of you whiners actually read the article before you started spewing your crap . the way i read it said the contractors will be paid. I wonder if some of these people ever had a positive thought in their lives.

    • Townie
      May 23, 2013 - 14:11

      You better read it again Ed. The investors will meet to decide who will get paid and how much they will get paid.

  • Embarrassed
    May 23, 2013 - 10:14

    And once again I'm embarrassed to see how fellow Islanders jump to shovel on the cynicism The article says their is no government money lost on the deal, so I for one am thankful. It also says creditors will be paid and cash is set aside and it's about time. Both good things. Do people know something that the Guardian doesnt? I no nothing about business but I remember Homburg lost control of a company and it says so in the article. I try to pay attention . But it looks to me it doesnt matter that the article says people will have their own opionons I think this is great news and let's get people BACK TO WORK!!

    • ed
      May 23, 2013 - 13:11

      [to embarrassed][ and come on people] [bravo.].....finally someone is looking at the whole picture. it's too bad that more people can't see the positive in this announcement.

    • Townie
      May 23, 2013 - 14:13

      You better pay a little more attention then "A meeting of Homburg Invest Inc.’s creditors is planned for later this month where they will vote on a settlement plan. That plan likely won’t see every creditor paid all they are owed and Homburg International plans to review any remaining claims after that repayment process is finalized." Settlement does not mean paid in full.

  • man behind the curtain
    May 23, 2013 - 10:04

    So it sounds like Homburg incurred great debt to build the hotel under one of his corporations, then walked away from that debt and under another of his corporations assumed ownership again for a fraction of what is owed. I'd be thanking the government too. Anything Goes is right: we need to see more numbers.

  • Anything Goes
    May 23, 2013 - 09:17

    There is only one number in this story. Instead of the several one would expect. Such as a sales price. The contractors debt figure is the one mentioned. This is a political message rather than an explanation of a business contract.

  • THE FACTS
    May 23, 2013 - 09:07

    Let's see if I have the facts. Homburg comes to town, talks the Provincial Government into millions of dollars, hires local contactors to build this hotel, then closes the hotel does not pay the Government nor contractors, Sells the entire group of properties to one of his own companies and plans to open again and from the sounds of this article is looking for more taxpayers money. When will these locals in Government learn they cannot play with this international boys with out being taken for a ride. Any local business that does dealings with this outfit now deserves what they get stuck with but the taxpayers do not deserve to lose anymore. To the Government I say please STOP giving our money that is sorely needed in other places to these multi million dollar companies.

  • Rube's R'Us
    May 23, 2013 - 08:37

    Keep your eye on the shells folks, the pea is under there . . . it's here, it's there. Okay, put your tax dollars on the table and make your bets. Except here's the rub, win or loose like our money disappears. And the magic is that we shrug and feel okay about the game!

  • dissapointed
    May 23, 2013 - 08:32

    Progess?

  • fred
    May 23, 2013 - 08:03

    you ve got to be kidding

  • Bob Macdonald
    May 23, 2013 - 07:22

    In the interests of good reporting the Guardian should do a story on how this whole deal played out. By that I mean, did the building end up getting paid for by taxpayers and the unpaid contractors. Has he essentially got a 30 million dollar building for 10 or 15 million. I guess they call deals like this smart now a days. It used to be called underhanded in the past. Really to the guardian. - Do a story on this - it is in the public interest if we paid for it. If not we should be made aware of that as well.

  • Quiet Observer
    May 23, 2013 - 07:21

    And who gets screwed at the end of the day? The Island businesses that are owed money. I hope they do not accept settlements and take them to court and get judgments put on them. Ghiz's buddy Homburg is bad news for PEI and will continue to put it to Islanders. And where is Ghiz in all this to protect Islanders. As the major creditor, the government of PEI would have to approve this sale.

  • Wondering
    May 23, 2013 - 07:10

    Just how much did this fiasco cost Island Taxpayers?

  • Sure , Sure
    May 23, 2013 - 07:03

    Sure , Sure : There are outstanding loans with the provincial government on some of the properties and the news release said they will be preserved without any write-downs in public money owed. What a crock of BS this is . It's not hard to tell that PEI is a way out of it's league dealing with these business people . We are in for another rip that the goverment will cover up . Sicking reading this , knowing that our taxes are again going to line strangers pockets . When will this goverment realize that they don't have the brains to deal with private business , It is also not in their mandate .

  • dissapointed
    May 23, 2013 - 06:35

    One of the newest and ugliest hotels in Charlottetown will reopen and the people that built it will not be paid. Still no parking Im guessing????? How does this happen?

  • fed up
    May 23, 2013 - 06:31

    cripes... left hand sold it to right, stiffing suppliers and PEI taxpayers. And so-called "Innovation" and "Development" bodies will continue to shovel money at this schemer.

  • Mad Teach
    May 23, 2013 - 05:58

    So the government is willing to bailout some terrible business man, but they're cutting teaching positions. Sounds like that will help the Island a lot.

  • Just one of the Sheep
    May 23, 2013 - 05:36

    Fool me once, shame on you; fool me twice, shame on me Looks like we are showing just what fools we have in power. Wonder how Homburg became a wealthy man ?

  • Adam
    May 23, 2013 - 00:18

    This is sick. Whatever way you twist it, it's a shell game. Local contractors won't be paid, our friends and neighbors folks. This unsophisticated government appears to have given a gift to Mr Homburg , and/or his shareholders. I think it would be anathema to patronize this business until a public list of creditors is satisfied that they have all the money they are owed.

  • intobed
    May 22, 2013 - 23:45

    Oh no! How many more millions of our dollars will this cost Island taxpayers? Homburg is laughing all the way to the bank.

  • Sauced
    May 22, 2013 - 23:44

    Maybe now with new ownership they'll turn off those ridiculously ugly LED uplights

    • Townie
      May 23, 2013 - 14:17

      Except that the new ownership is the same as the old ownership, just a new name. So they will still have ridiculously ugly lights, they just might not be LED.

  • don
    May 22, 2013 - 22:35

    how much did we lose on this deal? i would say every cent. in the hole again.