On November 13, 2002, Intrawest completed the sale and lease back of its Whistler/Blackcomb employee housing properties to Westwind Apartments Ltd., for approximately $20 million. This transaction was designed to further Intrawest’s objective of releasing capital invested in assets with a low rate of return on investment, while ensuring that these properties remain available for rental to mountain employees. The transaction involved dealings with a number of prospective purchasers and negotiations with the Resort Municipality of Whistler, Canada Mortgage and Housing Corporation (CMHC) and the purchaser’s mortgage lender, Desjardins Financial Security Life Assurance Company.
The CMHC-insured financing was contingent upon the postponement of registered employee housing covenants to the first mortgage security, combined with an option to purchase in favour of the municipality, which protects the municipality’s position by giving it the option to purchase the properties for the amount owing under the first mortgage if the lender realizes on its security. The transaction also included a concurrent lease in respect of two staff dorm buildings, which were leased to The Fairmont Chateau Whistler. The deal was structured to ensure that it would be treated as a sale and operating lease for the purpose of both Canadian and U.S. accounting rules.
Tony Knight, David Ross and Stacey Handley of Lang Michener acted for Westwind. John Doolan and Craig Shirreff of McCarthy Tétrault LLP acted for Intrawest. Richard Parr and Ray Young of Lidstone, Young, Anderson acted for the Resort Municipality of Whistler. Hugh Claxton, Peter Anderson and Janet Derbawka of Boughton Peterson Yang Anderson Law Corporation acted for Desjardins Financial. Fairmont was represented by in-house counsel Barbara Kilner.