The Rosseau, A JW Marriott Resort, seen here in summer, has been listed for auction by Colliers International Hotels this paper has learned.
File photo by Bev McMullen
MUSKOKA LAKES — The Rosseau, the main hotel at Red Leaves resort in Minett, is on the market, this paper has learned.
Cost overruns forced the multimillion-dollar hotel development into receivership on May 22 last year. The Rosseau hotel is now up for auction, confirmed Bill Stone, executive managing director of Colliers International Hotels, the firm that has been appointed to sell the residual interest in the property.
The Ontario Superior Court of Justice appointed Alvarez & Marsal as receiver, meaning the firm took over managerial control and responsibility of the property. JW Marriott continued to operate the hotel. Court documents show that Alvarez & Marsal met with Colliers after the court ordered an institutional sale in July of last year.
Approximately 130 of the hotel’s 221 units remain unsold, said Stone. Those 130 units and the balance of the public space in the hotel, such as the meeting spaces, the bar, restaurant and some development land, are up for sale as a single property. The receivership does not involve any of the other Red Leaves properties including The Rock golf course, Wallace Marine and Clevelands House.
The property will be sold by auction, with no set price, and Stone said buyers appear to be interested. “I think the interest has been strong. It has been diverse from a broad range of investors. So we are encouraged so far.”
Potential buyers are mainly from North America, but there is some “off-shore” interest, Stone said.
Among those potential buyers is Resorts Muskoka Ltd., which developed The Muskokan Resort Club on Lake Joseph. According to court documents Resorts Muskoka expressed interest in the hotel in October but was advised that it would have to wait for the institutional sales process.
The receiver has targeted May 2010 for the completion of the sale transaction, according to court documents.
“I can’t comment on timing,” Stone said. “It does take time to get deals done but we are hoping to have it wrapped up within about four or five months.”
The property will be sold through a two-round bidding process. In the first round the buyers must show their capability and wherewithal to do the deal; the second round will involve bidding on the price.
The first round deadline is Jan. 22 and the second round is March 10.
Ken Fowler of Ken Fowler Enterprises, an investor in Red Leaves, said he was disappointed last May when the project went into receivership.
He also said the hotel is only one small part of the Red Leaves development — a very large long-term project expected to be complete in 2030. He indicated the receivership meant loss of control of the hotel for the time being, but it is not the end of the story.
When reached by telephone last week, Fowler said he was not surprised the hotel is up for sale.
“We know what’s going on, it is the normal process,” said Fowler. He thought the hotel would have been up for sale sooner.
Fowler was noncommittal when asked if he would like to regain ownership of The Rosseau.
“Who knows? You never know in this world. There are lots of turns and twists in things, aren’t there?” he said.
The largest part of Red Leaves is not in receivership, he added. There are future plans for a village-like community with shops and the potential for 4,000 dwelling units.
The Fowler companies contributed more than $117 million in equity to the resort project, including approximately $50 million to The Rosseau, court documents state.
Whoever the future buyer is, they will decide whether the hotel will continue to be operated by Marriott.
Janine Allen with The Rosseau hotel’s public relations firm said she strongly believes the JW Marriott brand and its “unassuming luxury” is the right fit for the property.
“When and if the resort changes hands, these would be the things a new owner would consider,” said Allen.
Marriott has been a partner in the development of The Rosseau for five years, and remains committed to its success as a JW Marriott hotel, she added.