FILE PHOTO: Dallas Desjardins makes a putt on the 18-hole at Summerside Golf and Country Club.
Shizhong Holdings Inc. expects to finalize deal to purchase golf club, include it as part of Prince Alex Spa
SUMMERSIDE – The City of Summerside is now a loan guarantor for the new owner of the Summerside Golf and Country Club.
Council approved a motion Tuesday night authorizing the city to offer Shizhong Holdings Inc. a $900,000 loan guarantee.
The Journal Pioneer confirmed Tuesday morning that the company expects to finalize a deal today to purchase the golf club and include it as part of the Prince Alex Spa and Resort, which is on a neighbouring property under development in the city's west end.
Council voted on the motion after a brief in-camera session following its monthly committee of council meeting. The vote was unanimous except for two councillors who were not present.
Mayor Bill Martin said this was a good deal for the city.
"The city has a policy that's been in place for some time that allows it, under very specific circumstances, to guarantee loans for economic development, up to $1 million," said Martin.
"The individual whose loans we're guaranteeing has an excellent capacity to meet the obligation and the business case makes excellent sense."
That individual is Shizhong (Sean) Liu, who, while originally from China, purchased a home in and relocated to Summerside several years ago. Liu purchased the old Dynasty Spa property in the city's west end about a decade ago and started developing the property in earnest last summer, financing the project himself.
Liu has said that his vision is for the resort to be five stars and eventually employ more than 200 people.
Having the golf course as part of the spa property will help make that vision a reality, said Martin, which is why it made sense for the city to act as a guarantor for the project.
The mayor stressed that acting as a guarantor does not mean taxpayers will be loaning Liu funds for the resort project. Rather, the city has agreed to take over repayment responsibility to Liu's creditors if, for whatever reason, he could not pay his debt.
The worst case scenario is that the city ends up owning the golf course, said Martin.
Council has sought thorough legal advice on this matter, he added, and has spent a considerable amount of time doing its homework.
"This isn't frivolous. This isn't anything we went into with our eyes closed. We knew exactly what we were doing."
The golf course property, which is located at 1399 Linkletter Rd., includes a clubhouse with a restaurant, offices and retail space in addition to an 18-hole course that spreads over 147 acres. The abutting Prince Alex Resort property is 116 acres.