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REGAL RIDGE UNDER SIEGE
Four weeks ago the Osoyoos Times reprinted a press release and letter of appeal for understanding from Adrian Erickson, developer of the massive Regal Ridge properties on Anarchist Mountain.
The letter acknowledged that Regal Ridge was undergoing restructuring and downsizing. Certain costs for infrastructure development, said Erickson, would have to be shifted.
Causes for the shortage of funds was attributed to the decline in the economic climate, competition from crushed housing prices in the U.S. Sunbelt and “uncontrollable power infrastructure costs.”
The letter stated that three quarters of lots had services in place and the company was working to find a solution for the others, with support from its creditors.
There was an outpouring of criticism from many readers about the lack of full disclosure on the part of Regal Ridge and what many people allege are half truths or distortions in the press release.
Regal Ridge promised large, beautifully laid out lots that included access by paved road with power, telephone and high-speed cable delivered to the lot. In addition all lots were to have drilled wells and free drilling for geothermal systems.
According to those who have bought up there, the two-to-three acre lots are spectacular and offer sumptuous views. The design allows privacy yet still provides a sense of community.
Rob Burk is the fire chief with the Anarchist Mountain Fire Department and owner of Kerin Construction, which builds homes. In his guise as a development owner, Burk has been involved in eight properties as part or whole owner and builder. Even with the problems there, Burk said, “It’s still a great place to live.”
Even so, he is now suing Erickson and Regal Ridge for breach of contract. Erickson, Burk stated, has not delivered on all the services promised in the purchase agreement.
While all lots do have drilled wells, approximately 120 of them do not have all, or in some cases, any services.
Oliver Betz is one of those unfortunate people. He has been waiting a long time and he isn’t willing to take Erickson’s word for it anymore. “I own No. 27 Sasquatch Trail and it [has] been almost five years since I purchased the lot. I still have no power or phone.”
Burk said, “A few are throwing their hands up in the air and saying, ‘It’s not worth it.’” Burk, who is looking at legal options, is not willing to accept outcome. “We’ve paid for it, now we’re paying again.”
Burk is also angry because, he claims, Erickson is now trying to deny his obligations. Burk said Erickson promised free geothermal drilling; Burk now claims Erickson is reneging on that promise. He shows off a Regal Ridge advertisement that states on the front, ‘FREE Geothermal Drilling.’
Mark Hillier is another buyer who feels that Erickson deliberately misled him. Hillier only purchased his property in September 2011. He believes Erickson must have known about the company’s inability to deliver on infrastructure, but Erickson told him nothing. Hillier wrote to Erickson, stating: “I cannot believe that all these issues materialized in just one month, and I do not understand why your company did not make us aware of this before we purchased the land. I specifically recall asking Ryan [Erickson, Adrian’s son and Regal Ridge’s sales manager] about the road paving and utilities at the time of purchase, and they would be supplied, and at that time it was not mentioned that Regal Ridge was having this difficulty.”
Excerpts from Erickson’s reply to Hillier include the following:
“I completely understand your frustration, please appreciate that our world has changed dramatically in 30 days, much less the past 45 days.
It started with one lender getting nervous due to sale cancellations we experienced due to the uneasiness in the world economy, now it has spread to some of our other lenders.”
This despite the statement on October 14 in Regal Ridge’s press release stating, “Our key lenders who take a long term view are supportive and we are confident that in due course Regal Ridge will be a leaner and more effective company.”
One man who is in the know about the infrastructure at Regal Ridge is John Nett, who was the project construction manager, working on the installation of infrastructure. He said, “Unfortunately there is nothing further from the truth than the statements Adrian Erickson made in the press release [dated] October 7, 2011.”
The question Nett wants answered is: “Where is the money?”
According to Nett, Erickson’s contention about price increases at Fortis is a red herring. He said Erickson is making excuses and contends the sharp increases in Fortis’ pricing only took place in 2011. If Erickson had kept up with installing infrastructure from 2007 through to 2010, Fortis’ change in pricing would only affect a very few lots.
What Nett wants is this: “Give us a plan [of] how it will be financed and by whom. Don’t ask us to pay for it again through taxes.”
When Nett talks about taxes, he is referring to the Regal Ridge press release that suggests they are negotiating with the RDOS to bring in power. The press release does not make clear that any such program must be agreed to by the residents and that it will only be done on a cost recovery basis. The residents will have to pay more if this goes ahead.
Bill Newell, the RDOS’ chief administrative officer acknowledged he is aware of the situation at Regal Ridge, but added, “Any services put into an area under an Electrical Service Area must be done through an official petition process that comes from the citizens.”
Nett is also incredulous about some of the “solutions” posed by Erickson. Nett said they were told that even though there was no phone connection they could get by with an Internet connection using Skype for outside contact, but Nett said there is no cellular reception on his property. In addition, there is no 911 service. Nett, and many of the others contacted want to retire to these properties. Said Nett, “I’m not willing to settle for no 911 service.”
Several people contacted are engaged in, or are contemplating law suits, but the fights are with Regal Ridge, the company. The people living there feel the development is a real community. Nett concluded, “Regal Ridge is a very good place and it is a great community with all the neighbours already living there; I’m positive one day it will be even bigger and better. Especially when all the property owners have their promised infrastructure and they are able to build and live on the mountain.”
Burk might have summed up the sentiments best of all when he said, “The best thing that could happen is they stop the advertising, they stop lying to the buyers.”
The Osoyoos Times attempted to get an interview with Mr. Erickson, which he initially agreed to, but later pulled out of. Instead, we were directed to send all questions in writing to Ron Palmer, Regal Ridge’s general manager, but as of press time Tuesday, no replies had been received.