Sale of Fortress Inn be­com­ing com­pli­cated for long­time owner

Has of­fer to buy, but must clear up sit­u­a­tion with lease­holder first

Cape Breton Post - - Front Page - BY CAPE BRE­TON POST STAFF

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.


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