Dream of hotel’s revival turns sour
Maple Creek landmark’s woes leave investors, creditors in lurch
When the Commercial Hotel in Maple Creek was reopened in 2013, having been forced to close after bad flooding in 2010, its new joint-owner Inigo (Noy) Lim likened its early financial backers to Father Christmas.
“We don’t have any really big or good credit ratings, because most of us were three years only here,” Lim said as he praised the hotel’s lenders in a video with a local television station at the time. “(It’s) like Christmas coming early. They’re like Santa Claus.”
Now, however, some aren’t feeling so festive as the 1885 landmark’s re-closure in April left many out of pocket, including — to the tune of hundreds of thousands of dollars — federal government-backed lender Community Futures, the Canada Revenue Agency and the Saskatchewan Ministry of Labour.
After a much-vaunted revamp that was expected to cost between $750,000 and $1 million — more than $100,000 of which came from the Saskatchewan Ministry of Parks, Culture and Sport — the hotel is once more shuttered and up for sale. As for Lim and his co-owners, they have all declared bankruptcy.
In early May, the local Prairie Post newspaper reported that a note had been posted in the hotel’s window saying that, “The Commercial Hotel is temporarily closed for company restructuring until further notice. We apologize for any inconvenience this may have caused you.”
In a letter to one creditor later that month, hotel owners Lim, his wife Marichelle Lim, Jayson Catalasan, Almeenah Catalasan, Marcelo Del Barrio, Agnes Del Barrio and Ronald Del Barrio said they had reached the end of the line.
“We cannot apologize enough and we will always regret this has happened. Trust is hard earned and we have failed everyone,” the letter reads, blaming the economy, severe cold weather in the winter and other factors on the closure, which it says came about after the group, “exhausted all our resources.”
In November 2012, the sevenstrong Filipino immigrant group under Lim’s leadership — incorporated as the Licadel Hotel Group Ltd. — stepped in to save the property which had at one point been the town’s oldest-running business.
To finance the plan Lim — a chef previously based at Maple Creek’s Star Cafe and Grill — used provincial government grants as well as funds from Community Futures, which is backed by the federal government’s Western Economic Diversification Canada division.
Community Futures — non-profit corporations run by volunteer boards, supported by paid staff, of which there are 13 branches in Saskatchewan — was launched by the federal government in 1985 and provides strategic economic planning, technical and advisory services, loans for small businesses and other services to budding entrepreneurs.
In this case, Community Futures via local area branches loaned hundreds of thousands of dollars to the hotel. The local Cypress Credit Union provided further financing.
Taking their lead from the famous Grand Union Hotel in Montana, the group’s first step was opening a bar in summer 2013. Up and running fully by February 2014, the hotel boasted a saloon bar, a restaurant and dining room, 14 guest rooms, a refurbished lobby and plans for a patio expansion.
The thinking behind the renovation — to return the Commercial Hotel to the way it looked at the turn of the 1900s, a genuine throwback to a bygone era — was highly praised. And that, for all intents and purposes, appeared to be what was happening.
The Saskatchewan Ministry of Parks, Culture and Sport provided $32,000 in matching grant funding from the Main Street Saskatchewan Program. The funds were distributed via the Maple Creek Main Street branch between 2012 and 2014, to “support the rehabilitation of the front facade of the building,” the ministry said by email.
The ministry added that between 2013 and 2015, it awarded two matching grants totalling $70,000 from the Saskatchewan Heritage Foundation, “to support rehabilitation and restoration of the masonry, windows and doors on the building exterior of the building.” On the foundation’s own site, it said it would, “help restore the community’s Commercial Hotel to its former glory.”
In October 2013 the fast-rising Lim was photographed with Premier Brad Wall at a lunch hosted by the Canadian Chamber of Commerce in Manila, Philippines. On that trip, Wall singled out the Commercial Hotel and its owners for fulsome praise.
“Noy Lim is here today and has become a close friend of the whole province of Saskatchewan,” Wall said. “When they heard that we were coming to the Philippines, the partners got together and they said Noy better come along too. And sir, we are honoured to have you as a very official part of the Saskatchewan delegation of this trip.”
In 2014, the hotel won Business of the Year in Maple Creek. In June 2015, the hotel posted a photo to its Facebook page as it catered the wedding of Wall’s daughter at nearby Cypress Hills Interprovincial Park. In the Maple Creek municipal election of October 2016, Barry Rudd was elected mayor with 445 votes, with Lim running second with 184.
However, investors and creditors say that as the hotel was winning plaudits and Lim and his team were keeping exalted company, much of the work promised by the group — such as renovations to the third floor — was never fully completed, and much work that was contracted, was never paid for.
Although the provincial grants were meant, among other things, to spruce up the property’s exterior, at least one mason was badly shortchanged.
Court of Queen’s Bench documents show CAP Masonry of Balgonie was granted a judgment against Licadel in September 2015 for $45,377.66 after interest and costs, for unpaid work on the hotel.
Charles Pirie of CAP Masonry said that after they undertook basement and exterior brick work from September 2014 onward, his company was constantly told by Licadel that they had fresh funding coming from Community Futures and elsewhere to pay CAP in full, but payments dried up with almost one-third of a $145,000 bill unpaid.
“They never responded to phone messages; they never responded to emails,” Pirie said. CAP went to court when their lawyers told them there were already liens against the building.
“They advised us that another lien would be inconsequential and we wouldn’t have any grounds to actually get any funds back,” Pirie added. Of the outstanding sum, he says he received a “random” cheque for $2,000 in October 2015 without any note of explanation, after the court judgment.
Local woman and one-time Commercial Hotel waitress Gabriel Chudleigh, who ran an art sales business from the hotel’s lobby, was received a loan of $45,000 from Community Futures Southwest for her business, Gabriel’s Gifts. The loan’s purpose was described in documents by Community Futures as a “Business startup and building investment.”
She received $15,000 in December 2013 and $30,000 in early 2014, using the latter — with the guidance of Community Futures — to buy what she thought were 30 “dividend” shares that would give her a piece of hotel revenues.
Instead, she says the hotel fobbed her off when she asked for a written outline of her share deal. When Licadel eventually put the agreement in writing months later she was, in effect, due only to get the same yearly six per cent interest from the hotel on her $30,000 as she was required to pay Community Futures on the $30,000 loan. Chudleigh contends she was used as a “funnel” in a deal that was worthless to her but benefitted the hotel, which stood to gain the extra $30,000.
Email chains seen by the Regina Leader-Post involving Chudleigh, Noy Lim, Community Futures Southwest general manager John Parker and others show a pattern of confusion, delay and conflict.
In Dec. 11, 2014, emails to Chudleigh, Licadel’s law firm told her, “It is apparent to me that there was some miscommunication at the early stages of this agreement and some loose use of the word ‘dividend’ when discussing the agreement.”
The firm outlines how at that point, Lim’s understanding of the deal remained that Chudleigh would get a guaranteed six per cent of her investment each year, or $1,800. However, in a letter to Chudleigh from the law firm a week earlier, a lawyer had said the $1,800 talked about by Lim (his own client) was incorrect.
“In short the $1,800 figure is not necessarily the correct amount to be paid to you,” the letter reads. “The amount paid to you each year will be dependent upon the success of the Hotel.”
After she protested, first Chudleigh’s terms were improved — but never linked to hotel profits — and eventually her $30,000 was returned by the hotel via the law firm in March 2015.
After she gave the $30,000 back to Community Futures, the outstanding balance of the loan was forgiven in 2016. She says that by the time the saga drew to a close, the only cheque she had ever received from the hotel was for less than $1,000 and she didn’t cash it, as it would suggest she agreed to a bad deal.
“The idea was for me to get dividend shares, which would be an investment,” she says. “Somewhere along the line, after they got the money, that all changed. My investment became a debt, and one that I would have had for 15 years.”
A July 2016 letter to Chudleigh from the board of Community Futures Southwest apologizes to her — “once in a while mistakes happen” — but also notes that during an audit of its operations, nothing improper was identified, including on her account. The letter adds that the “same offer and other options was offered to other investors,” in the hotel, attracting some $190,000.
Some weren’t as lucky as Chudleigh; the Leader-Post has confirmed one consortium of eight local investors “who genuinely wanted to see the hotel do well,” as one person involved put it, invested $70,000 but received only a fraction of the promised returns. Neither did they ever get back their principal sums, as agreed.
William Yang, a local entrepreneur who owns Cypress Pizza and Chicken and other small businesses in the town, saw his own $20,000 investment amount to nothing.
After buying into what he called a “bond investment” with Licadel in 2013, he said the group gave their word he would receive his principal $20,000 sum back after three years, on top of a six-per cent return each year. The goalposts were later moved, he says.
“The contract was supposed to be for three years, and for some reason they turned that into five years, so what can I do? I can’t do anything,” Yang says.
Yang provided the Leader-Post with a promissory note that says payment of the principal “shall be made in one lump sum on the fifth anniversary of this note,” or in full, or part, on the third anniversary “at the option” of Licadel. He says this contradicted a prior gentleman’s agreement when the money was handed over.
After receiving his six per cent in biannual instalments of $600 until the middle of 2016, he says Licadel then began stalling. “They put it off, and put it off, and put it off,” he says of his most recent interest payments which never came.
“And now they’re bankrupt, so I don’t know how I can get my $20,000 back. They are really smart. Noy is a really, really smart man, and he knows how to talk.”
Yang realizes he will be far down the pecking order should anything emerge from any sale of the hotel.
“Bankruptcy doesn’t give a damn about the building. They’ll just sell it … 50 cents on the dollar,” he says. “So the bank takes most of the money, and then after that it’s going to be the shareholder, and nothing else for the small little bondholder.”
In bankruptcy proposals for the seven owners of the Licadel Hotel Group obtained by the LeaderPost, shared liabilities run to hundreds of thousands of dollars.
In statements of affairs from the Office of the Superintendent of Bankruptcy, various liabilities are repeated among the group. Lim’s liabilities total $460,244; his wife Marichelle’s $493,637; Almeenah Catalasan’s $380,263; Jayson Catalasan’s $365,118; Agnes Del Barrio’s $474,240; Marcelo Del Barrio’s $493,460; and Ronald Del Barrio’s $551,050.
On Lim’s filing, unsecured liabilities include $243,927 to the Canada Revenue Agency; $11,600 to the Saskatchewan government’s labour relations division; $5,822 to the Saskatchewan government’s revenue division; and $13,196 to local lender Thunder Hills Loan Coop. Also listed is a secured liability of $164,362 to Ontario-based tech firm Techcom Managed Services.
Ronald Del Barrio’s bankruptcy proposal lists liabilities that include a guarantee of $350,000 to Community Futures Southwest. Also listed is a guarantee of $158,157 to Cypress Credit Union. Neither of these amounts appear on any of the other six owners’ filings; other filings list liabilities of just $25 to both Community Futures Southwest and Cypress Credit Union. A bankruptcy expert contacted by the Leader-Post said that the $25 figure would often be used when a bankrupt wished to acknowledge that he or she owed a debt to a certain entity, but the amount was not yet determined.
A spokesperson for Western Economic Diversification Canada said by email that individual Community Futures loans could not be discussed, and relayed queries to local branches.
In separate calls, Community Futures Southwest confirmed that Licadel “are a client” and noted that the hotel is up for sale. Community Futures Southwest’s John Parker said he would not discuss clients for confidentiality reasons, but stressed that Community Futures does not lend to individuals, just businesses.
Licadel Hotel Group Ltd. is, as of July 4, still active, according to registry documents, with Noy Lim listed as its president. A call to the hotel was answered by owner Almeenah Catalasan, who said the line was diverted to her. She would not speak about the hotel and said she did not have phone numbers for any of the other owners.
Asked for a number for Lim, she said: “He doesn’t have any cellphone number, I’m sorry. Noy is the right person to talk to. He’s our president. Right now, he’s not in town.”
“There’s no plans, not right now,” she said of the hotel. “It’s just closed for now.”
Calls to a cell number previously associated with Lim gave a “not in service” message, and he did not respond to an email.
Calls to a business associated with two other owners, and social media messages, were not returned.
The hotel has been listed online by real estate group Royal LePage — asking price $800,000 — since last month.
“The owners have spared no expense in bringing this historic hotel back to its glory and you will be amazed with the results of the makeover,” the listing reads.