The owners of the Victoria International Marina on the Songhees are back in charge of the facility after pulling together financing to pay off its debts and discharge the court-appointed receiver.
According to the receiver’s report to creditors, Vancouver-based Huai Yin Zhang, director of the companies that have a controlling stake in the marina, has secured more than $21 million in new financing, enough to cover the marina’s $16.5 million in liabilities and other associated costs.
In his report, Todd Martin, senior vice-president with Alvarez and Marsal Canada, the company appointed to oversee the facility in December, said Zhang had more than enough to pay off the Bank of Nova Scotia as well as cover municipal property taxes and money owed to Canada Revenue Agency.
The City of Victoria was owed $299,274 for property taxes, while Canada Revenue Agency was owed $196,958.
Martin said he supported the courts discharging the receiver and Zhang’s plan to take control of the company, as the new funds would cover all existing debts.
Community Marine Concepts, Victoria International Marina, Eternaland Yuheng Investment Holding and 0736657 B.C. owed a total of $16.5 million to a list of 48 creditors.
The marina was tipped into receivership in November last year when it was deemed to be in default to the Bank of Nova Scotia.
The marina borrowed more than $17 million from the bank to build the facility. The bank also provided a $100,000 letter of credit, a Visa card with a $50,000 limit, and emergency loans totalling $80,000.
Craig Norris, chief executive of Vancouver Island Marina, said it remains to be seen how the marina will emerge from the receivership, but he is optimistic the facility will be leaner and better organized.
Norris said operating under the auspices of a receiver helped improve operations and his team took advantage of the on-site expertise to improve systems and performance.
“It was a good opportunity to regroup and really dive deep into the operations,” he said. “It was refreshing and there will be a lot of that stuff we put into practice as well.”
The marina has struggled since it opened in 2018, a situation compounded by the pandemic, which closed the border to international sailors.
Facing another year of empty slips, the owners put it on the market last spring.
In December, the receiver had the marina appraised and started marketing it for sale.
Commercial real estate firm CBRE listed the property, generating five offers.
According to Martin’s report, the receiver did not accept any of the offers after Zhang and her family, the majority shareholders, made it clear they were pursuing refinancing and intended to clear the debts.
Norris said he’s not sure if the ownership group will consider a sale again.
Given the challenges everyone has faced through two years of a pandemic, the patience of any shareholder is likely to have been tested to the limit, he said.
“I think if the right price comes along, they might sell it, but they are going to do that when it makes the most sense to sell,” he said. “They’re not going to sell at a low point.”
The property includes the marina’s 28 slips for vessels between 65 and 165 feet in length, nearly 3,000 linear feet of concrete-and-steel floats, and amenities including a restaurant and a marina building.
Suffering from lack of international travel and cancellation of events during the pandemic, the marina was unable to access many of the relief measures available, because it didn’t have a business track record.
“Creativity was definitely at an all-time high amongst the few of us that remained during that period,” Norris said. “But you know it’s true, this stuff makes you more resilient and we did get through it.”
Norris said things have already started to pick up, with a seven per cent bump in revenue — though that only makes up some of the chunk taken out of the bottom line during the pandemic.
“There’s still a lot of apprehensive people out there, but we’re already double what we were in our best year in reservations alone,” he said. “But it’s going to take 10 times our reservations in order for us to be completely sustainable. So we’ll see how it goes.”
The marina was built at a cost of about $35 million, and opened with limited operation in 2018. In 2019, when it was fully operational, it hosted about 90 vessels.
