Sob story in Innisfil

By STEVE LADURANTAYE The Globe and Mail Jun. 29 2012

Friday Harbour sits at the mouth of an abandoned Lake Simcoe marina, a resort development that promises city-weary Torontonians a year-round escape from the blistering pace of their lives for less than the cost of a decent downtown condominium.

The developer is quick to talk up the 242-hectare site’s many amenities. The 2,000-some lakeside units, tucked in alongside a nature reserve, will range in price from $250,000 to a $1-million. They’ll eventually sit next to a new golf course, a 400-room hotel, an amphitheater and dozens of high-end shops and restaurants.

Buyers need not even worry about their carbon footprints. The site is about 12 kilometres from the Barrie South GO Station, meaning anyone with a decent bike could make the trip to cottage country without ever sticking a key into an ignition.

While it sounds pretty idyllic, reality is a little more complicated. Markham-based Geranium Corp. launches a massive marketing effort this weekend that will culminate with a sales centre opening in the fall, but the company won’t dwell on the 10-year legal battle that has dogged developer Earl Rumm every step of the way, costing both him and his opponents tens of millions of dollars.

His long and impressive list of enemies – which features both townies and millionaire Bay Street big shots who have vacationed in the area for generations and don’t want to see their refuges disrupted by thousands of new part-timers – have fought for a decade.

Their concerns are myriad: They worry about the lake’s water quality, they dread increased weekend traffic. They also wonder what would happen if the real-estate market weakened and demand for expensive second homes tanked, leaving a half-finished site fully tricked out with municipal water and sewer services.

“Some people are never happy,” Mr. Rumm says, sitting in the back of a Land Rover during a company-sponsored tour of the site that started with a helicopter ride from downtown Toronto. “They keep losing and losing in every challenge they make, and still they get to come back and challenge every time we look for a new permit or try to move things further along.”

As his excavators strip the site of trees to prepare for the billion-dollar development – which has the blessing of both the province and the municipality – his opponents are digging in for one last offensive that could render all previous approvals moot and chill resort developments across the province.

The whole project depends on blowing open the mouth of the harbour, digging a 24-hectare hole, deep enough for any boat that can navigate the Trent-Severn Waterway, and filling it with water. The thousands of vacation homes would be built along the artificial shoreline that is created, and the golf course’s rolling hills will be built using the excavated dirt.

But the land around the harbour still belongs to the province. Mr. Rumm is convinced the land transfer is a rubber-stamp process, but environmentalists working under the umbrella Innisfil District Association hope they can keep the province from selling the land to Mr. Rumm.

“It should really be renamed Monday Morning Harbour because there is going to be a huge hangover when the environmental costs come due,” says David Donnelly, the lawyer working with the group.

The environmentalists who oppose him have dismissed his ecological efforts but the company feels it’s getting a bad rap, mostly from the part-time residents who oppose the project. Eighty-one hectares – a full third – of the site has been designated as an environmental zone.

“If this were a parking lot naturalization then I could see some positives,” says Mr. Donnelly. “If you look at a satellite shot of Lake Simcoe, there’s not a lot of forested shoreline left.”

While Mr. Rumm is only months away from opening a sales centre, the project’s roots goes back decades, to when he would visit the area as a child to spend time with friends and relatives in their summer homes. He says he has the area’s greater good in mind – the company estimates the resort would have 1,000 full-time employees and generate about $4.4-million in annual property-tax revenue for Innisfil.

He grew to love the area, he says, and now owns one of the largest properties along the shoreline. That’s put him in a strange situation over the last decade as he squared off with high-profile opponents who spend as much time on Bay Street as they do on the lake.

“They think they can be cogs in the system, when really all they are doing is creating a lot of noise and fuss for nothing,” Mr. Rumm said.

“There is a process for us to follow, and we’ve followed that process every step of the way.”

That’s not to say he came out of the last decade unscathed. The development was cleared by the Ontario Municipal Board in 2007, but a string of approvals were needed before he could start clearing the land. He estimates the company has spent $100-million so far, and doesn’t have much to show for it aside from the parcel of land and dozens of reviews and environmental remediation plans.

While opponents focus on environmental concerns, the greatest threat to the project has little to do with trees or permits. The project is targeted toward wealthy city dwellers who want to get away for up to 300 days a year. But the units are a hybrid of cottage and house, which means they are susceptible to the market forces challenging both types of properties.

The condo rush that pushed prices in the city up by double-digit percentages since the recession is showing signs of slowing. Household debt, meanwhile, is at the highest level on record.

A recent report from ReMax, meanwhile, underlines the challenges facing anyone trying to sell vacation properties. The market has been in the dumps for years, and hasn’t enjoyed the same level of sales activities as the residential housing market. The average vacation property in the Innisfil area sits on the market for 235 days, with starting prices on winterized waterfront property starting around $500,000.

The report hints that slow sales in the area are the result of a lack of product, not a lack of interest. That’s the kind of thing Mr. Rumm likes to hear as he prepares to stake his company’s future on the massive resort development.

“This is going to happen,” he says. “You can’t time the market, you can’t worry about things like that. This is all about the lifestyle. We’ll be there to entertain you, so you don’t have to worry about entertaining yourself. How can anyone be against that?”