Mill River Resort owner gets leeway in provincial contract

The new owner of the Mill River Resort, sold by the P.E.I. government earlier this year, is given plenty of flexibility in terms of how to operate the property over the course of the 20-year deal, according to a copy of the contract obtained by CBC News.

Don McDougall purchased the resort and surrounding attractions for $500,000, with the province providing $6 million over the next 12 years for improvements to the property.

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The contract, obtained through a freedom of information request by CBC News, shows McDougall has plenty of leeway in keeping that agreement.

The agreement lays out four particulars for the operation of the properties.

• Continued operation of the Mill River Golf Course.
• Operation of Mill River Hotel as a major destination resort.
• Operation of Mill River Campground in a manner consistent with its present use.
• Mill River Aquaplex to be operated 12 months a year, with full community access.

If McDougall does not continue those operations, he is liable to pay a penalty of $500,000.

Province trying to cut its losses

But McDougall retains the right to change operations at the property "to assure the future economic sustainability and viability and success." He may also subdivide, sell or amalgamate the property. These changes would be subject to approval from the province, but could not be "unreasonably withheld."

McDougall also agrees to continue to operate winter activities at the park, but the penalty attached to stopping those operations is the return of snow grooming equipment.

The outdoor fun park is to be decommissioned.

Had it continued to run the properties, the province estimates its losses over the next 12 years would have been $6.6 million.

The province's first payment of $500,000 for property improvements was due 10 days after the signing of the contract. The Opposition has argued that effectively means McDougall paid nothing for the properties.

For the past two weeks, the Opposition has been asking for the contract to be tabled in the legislature. On Friday, Economic Development Minister Heath MacDonald said it may happen this week.

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