Michael’s Bay ownership taken to civil court

TORONTO—JM Pellerin, the developer representing a group seeking to develop the historic Michael’s Bay property on Manitoulin’s south shore has applied for, and received, an October 31 hearing to determine the status of an offer to purchase the property made to the property’s original owners, which includes more than 600 acres of land, a restaurant (the Royal Michael’s Bay Restaurant) and two houses.

The RCMP on behalf of the Belgian government several years ago seized the Michael’s Bay property, deemed to have been acquired through the proceeds of crime, and turned it over to the federal government’s Seized Property Management Directorate (SPMD), but Mr. Pellerin asserts that the SPMD has failed to properly maintain the assets. The Belgian property owners were charged with selling agricultural supplements deemed to be illegal in Europe.

“They have been falling down heavily,” he said. “These are log buildings that have not really been maintained—dry rot has set in.” He noted that the restaurant had taken considerable water damage due to a leak this past January and that there has been fire damage to another building due to an electrical fire. “There was $250,000 in damage in January because of the water pipes,” said Mr. Pellerin.

Mr. Pellerin claimed that, currently, the property is uninsured, as the previous policy had expired on March 1 and that the property’s previous owners did not have a clear answer on the status of the property.

“The SPMD was brought in as a babysitter for the property,” said Mr. Pellerin. “When you are a babysitter, you have a duty and responsibility to report what is going on. If the child falls down the stairs and breaks a leg, you have a duty to report that.”

Mr. Pellerin described dealings over the property as “very complicated” and that he has received “no cooperation from the SPMD.”

He indicated that his lawyers had told him that the two parties were admonished by the judge to solve their differences before the October 31 court date.

“It is a beautiful property,” he said. “It is a shame that it is not being properly maintained. That serves nobody’s purposes.” He suggested that the cost to bring the property back up to proper standards could be as much as $500,000. “You have to ask, if it is going to cost that much to fix it, is it really worth it?”

Spokespersons for the SPMD declined to comment on any issues dealing with the property maintenance, saying that it would be “inappropriate due to the matter being before the courts.” The Expositor was referred to the SPMD website for information on the process for seizure and disposition of real estate.

That website indicates that once a property is turned over to SPMD for management, the directorate then “engages the appropriate professionals to manage, maintain, and safeguard the assets while legal proceedings are concluded.”

Once the proceedings are concluded, if the owner is found guilty (which was the case in Belgian court), sentencing may include the forfeiture of the assets,” reads the webpage. “If there are no appeals, SPMD begins the process of disposing of the assets. Normally SPMD utilizes public sales and auctions to ensure market value is obtained. Proceeds of disposal, net of all costs associated with the management of assets, are shared with the involved jurisdictions in accordance with the Forfeited Property Sharing Regulations.”

Seized property could be any asset acquired through proceeds of crime, or any object used to commit a crime. SPMD takes into account the specific requirements of each asset to maintain its value and condition.

“Real property is disposed of using PWGSC Realty Services or private sector realty brokerages,” continues the webpage.

The ongoing process has been very frustrating, admits the developer. “It not only involves a lot of money on the table, but also a lot of people’s lives,” he said. “There are people who would like to get back to work and get on with their lives.”