REVscene Automotive Forum - Whistler owner wants Ottawa to pay $90M US: report

The Canadian government denies that it is negotiating a payout to the owners of the giant ski resort and Winter Olympics venue, Whistler Blackcomb.

The New York Post reported Monday that the parent of Intrawest ULC, the company that owns one of the venues for the Vancouver Winter Olympics, wants the Canadian government to put up $90 million US before the Games start or it will sue.

The Post reported the parent firm, Wall Street hedge fund Fortress Investments LLC, is negotiating with the Canadian government, with the report quoting Fortress as saying Ottawa had promised to compensate it for the time Whistler Blackcomb is used for the Olympics.

But the federal government maintained late Monday that no negotiations were underway.

At no time has the government of Canada been approached for any sort of payment, according to Deirdre McCracken, a spokeswoman for Heritage Minister James Moore.

There is no contract between the government of Canada and the owners of Whistler Blackcomb, McCracken added.

Whistler is to be the site of alpine skiing events during the Olympics, which start in 11 days.

The report said Fortress wants to get paid before the Games start or it will start legal proceedings. It did not identify its sources.

An Intrawest spokesman said it would not comment on the report but CEO Bill Jensen said in a statement that the company "has a 2002 agreement with VANOC (the Olympic organizing committee) to host the Winter Olympics at Whistler Blackcomb and have every confidence that VANOC will honour its financial commitments. Intrawest is looking forward to a successful Olympic Games."

The Intrawest spokesman, Ian Galbraith, told CBC News separately the terms of the agreement have not been made public but described it as a "make whole" agreement. He did not elaborate.

Make whole is a term used in business circles to describe compensation for losses.

The Post also reported that Fortress is offering cash to lenders of Intrawest in an offer to creditors that would give it more than two years to pull Intrawest out of its financial troubles.

Fortress paid $2.75 billion when it bought Intrawest in 2006, much of it with borrowed money. It is late on a $524-million debt payment.

Lenders have set a deadline of Feb. 19 — in the middle of the Games — to foreclose on Intrawest if they do not get more money from a deal to rearrange Intrawest's debt.

Report said to be credible

James Brander, a professor at the Sauder School of Business at the University of British Columbia in Vancouver, said the report that Fortress is looking for $90 million US is credible.

"It's not the slightest bit surprising that Fortress seems to be using brinkmanship with the Olympics about to start. That has certainly happened with Olympics before," he told CBC News.

"Sometimes governments give in to that. More commonly, they don't," he added.

Brander said Fortress is trying to raise cash to buy time with the lenders, but he predicted the lenders won't agree to that. He expected that Fortress will end up losing the Intrawest assets including not only Whistler but also Mont Tremblant in Quebec and Blue Mountain in Ontario.

Even if the lenders foreclose during the Games, he said, he doubted it would make any difference.

"That's a paper transaction. That doesn't affect what's happening on the ski hill," he said.

"It is possible that Fortress might threaten to do something like try to close down operations," he said, "but … I strongly suspect they don't have the legal right to do that."

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