Esquimalt Legion makes appeal for its survival
Clash with developer over $32M joint-venture highrise takes toll: ‘We’ve drained our bank account’
The Esquimalt branch of the Royal Canadian Legion on Admirals Road is fighting for its financial life amid fears it might go under due to a disputed highrise development project.
“We need all of Victoria to come and help us,” manager Doug Grant told the Times Colonist on Saturday, standing in the parking lot of the 1970s facility. An online fundraising campaign has been launched.
“There are veterans who built this with their blood, sweat and tears. Some people even put up their houses [as collateral] to build this.”
At issue before a Vancouver arbitrator is a joint-venture agreement the legion undertook with Monimos Equities and Developments Inc., and its principals, Christopher Fitzpatrick and Robert Schmidt, to build a $32-million seniors’ highrise on the legion property. The 12-storey project was to incorporate a new 5,000-square-foot legion facility and 10 units earmarked in perpetuity for legion ownership, with the developers getting 142 units they could sell to pay for the project and their profit.
Monimos contends the legion is in default of the 2008 joint-venture agreement, while the legion claims the agreement has expired with little or no investment by the developer. The case went before B.C. Supreme Court Justice Robert Johnson, who ruled on Nov. 7, 2016, that an arbitration clause of the joint-venture agreement is still in effect.
Grant said that Fitzpatrick and Schmidt want control of the property, valued at $2.6 million as of September 2013, even though the legion is already on the hook for a $1.5-million mortgage for preconstruction costs such as surveying, drilling for rock depth on the property and feasibility studies.
The legion must pay $333 daily to service the mortgage, and Monimos now wants the property, Grant said. Another developer was willing to make the project happen, but the property is tied up in legal proceedings, he added.
Arbitrator John Logan is hearing the case, with more documentation required by both sides by late September, Grant said.
Monimos’ Schmidt said he was unable to comment, as the legal issues are ongoing, and Fitzpatrick did not return a call from the Times Colonist.
“Monimos says that Branch 172’s efforts to market its land are causing difficulties in finding financing to complete the project contemplated by the joint venture,” the judge stated. Monimos reasons that “potential investors will be discouraged by the appearance of dissension among the joint venturers and second, Branch 172 is offering its land at prices below what Monimos is seeking by way of investment capital, thus undermining its efforts to secure the necessary financing.”
But Johnson wrote he was “not persuaded” that any damages Monimos might suffer as a result of the legion’s efforts to sell its land require an injunction forbidding such a sale, as Monimos requested.
Grant said Monimos says it has invested $700,000 in the project, but has not produced receipts, saying flood damage in the aftermath of the Tudor House fire in 2013 led to their destruction.
“This has nothing to do with the township,” Esquimalt Mayor Barb Desjardins said in an email to the Times Colonist. “It is unfortunate that it has occurred, but there is from what I see an arbitration process and so it would be wrong to comment at this time.”
The judge said the legion argues that Fitzpatrick and Schmidt misrepresented themselves as “capable of moving the joint venture to fruition within a commercially reasonable time” causing the legion to suffer damage and loss as a result.
“Now the Esquimalt Legion has a $10,000-per-month mortgage payment against their property, no new legion and no veterans/seniors housing,” says the legion’s GoFundMe page.
“They need your help to cover the legal costs, and to keep the doors open and the lights on while they fight these developers through the courts,” the page says.
Grant, 73, said it’s all he can do to pay the staff, but has not drawn a salary for full-time work in months.
“It’s a mess,” he said. “We’ve got legal fees. We’ve drained our bank account. We’re trying to survive … It’s just a terrible situation.”