Sale of Fortress Inn becoming complicated for longtime owner
Has offer to buy, but must clear up situation with leaseholder first
Moving on from a wellknown business in the scenic seaside community of Louisbourg has proven complicated for its longtime owner.
Senator Michael MacDonald had leased the property known as the Fortress Inn to Montreal businessman Ali Khan last year with the hope the man would eventually buy it.
“The lease finished at the end of March and we didn’t sign a new one because he wanted to change the lease, he wanted to pay much less, he wanted to do a bunch of things and we were negotiating it,” said MacDonald, who has owned the inn since 1988.
“In the meantime another fella came up to me and said ‘I want to lease your business.’ I told him ‘I’m already leasing and I’m going to lease again.’ I said ‘I’m hoping for somebody to buy it and this guy has been leasing it for a year, I think he might be interested in buying it.’”
The new party went through the place and decided to make MacDonald an offer.
The process of selling the inn is now proceeding but not before MacDonald said he honoured a first right of refusal on the property with Khan, even though their lease agreement had expired.
Khan felt he had a “verbal agreement” to operate the inn for two or three years so that he could eventually bring sound financial documents to a bank to justify a loan.
He was set to sign a new lease in December to operate the business for a second year but he said MacDonald kept putting him off.
“We’ve been shocked and traumatized,” Khan said.
“We turned it around completely. We had success all around us. We brought the music, you name it, we did everything the way any motel or restaurant does it on the Montreal level.”
Though Khan is upset, MacDonald maintains he did nothing wrong throughout the process.
“He knows I did everything right. I gave him first offer, first refusal with better conditions and better terms.”
As for the lease renewal, MacDonald said it wasn’t renewed because Khan wanted to change aspects of it.
The chance to sell the inn emerged before that process advanced.
Khan believes MacDonald is now able to sell the motel based on upgrades he did during his one-year lease.
He’s now hoping to reclaim some of those costs he estimates at $45,000 for things like televisions, bed sheets and other items.
MacDonald said they also have a legal agreement to cover fair depreciation compensation for such things.
“Everything is above board,” MacDonald said. “It’s a simple business transaction. He had two opportunities to buy, including this spring, and he declined. Am I supposed to sit down and never sell my business because somebody wants to lease it?”
Khan is no longer pursuing lease or purchase agreements on the inn. He has sought legal advice regarding compensation for upgrades he did to it, though.
There may soon be a new owner for the Fortress Inn in Louisbourg.