The Fascinating Failure of Channel Ridge
Images by Brette Little
This article has been adapted from a 2020 research article by historian J.I Little. This version was summarized by Brette Little and edited by Terri Potratz. Find the full feature here, originally published in the BC Studies quarterly journal.
In 1985, drawn to the natural beauty of Salt Spring, Victoria developer Louis Lindholm devised a plan for a European-style village to be built on a large 567-hectare site, complete with extensive trail networks throughout. Within the village, there would be townhouses, garden apartments, a Firehall, a school, a town hall, a clinic, commercial space, and even a theatre. A central plaza would pin it all together, space where the community could gather together. Lindholm’s proposed development on Channel Ridge was approved by the Islands Trust in 1986, with a restrictive covenant allowing for a total of 577 residences. Today, Channel Ridge is known for its incredible hiking trails but otherwise remains a rocky terrain devoid of any homes, save for one lone show home, sitting empty facing Samsun Narrows.
So what happened?
In the original 1986 development agreement, 110 hectares were to be set aside as a watershed protection zone for St. Mary’s Lake, which was the source of drinking water for most of the North Island. In 1989, Lindholm requested that his subdivision boundaries be moved over part of the watershed protection area to improve the view for some of his planned houses. After being denied permission, Lindholm clear cut 7 acres of this protected land in direct violation of the Islands Trust covenant. Not only was he sued for breach of contract by North Salt Spring Waterworks and the Salt Spring Water Preservation Society, but an injunction was granted preventing him from further development (including logging, building roads, or operating heavy equipment) on the watershed lands.
In a strange turn of events, on his way to court to protest this decision Lindholm collapsed and died. So that was the end of that? Not at all. Lindholm’s sons, his heirs, were eager to continue the project as well as to develop and sell 45 single-family lots south of the village development site. In reaction to the clear-cutting and other diversions from the original plan, Henry Schubart, the initial architect for the Channel Ridge development, publicly denounced the project and called for Islands Trust to review the plans again.
With existing septic systems in need of upgrading in order to facilitate future construction, the Lindholms decided their investment was too risky and in 2000 sold the Channel Ridge property to Property Team Inc. of Red Deer, Alberta, for an estimated $8 million dollars.
In 2003, with many investors and consultants in the mix, the permit process began for a new vision, what was to be called Highbridge. Cobblestone streets would wind through the village core, with 50 shops, galleries, and ateliers at street level, and residences above. The village square would be home to a market for local farm produce, with festivals and fairs taking place in adjacent meadows, and a water recovery system would be implemented throughout to address water shortage issues. Locals were worried that this village was starting to sound like a Whistler-style resort for the wealthy, and the Islands Trust responded by saying time-share ownership of the residences would not be permitted.
After $13 million was spent on the village site and with another $7 million still required for water and sewage, still, no construction on the buildings had begun, and costs for completion were estimated at $156 million by the company manager in 2004. There was a call for the village design to move away from the European style, and toward one that better reflected the natural and rural character of the West Coast. With the 2006 Master Development Permit, the maximum number of residential units had been reduced to 321, and commercial space had been significantly decreased. Still, the plan called for specialty retail and food service shops, plazas and an amphitheatre for concerts and other programming, market stalls, plus an Amenity Complex to house a library, meeting rooms, pool, sauna, and art studios. Tennis courts and a recreation field would lay at the other end of the site.
The plan called for retail and food service shops, plazas, an amphitheatre for concerts, market stalls, plus an amenity complex with a library, meeting rooms, pool, sauna, and art studios.
A year after the 2008 financial crisis struck, Property Team Inc. was sued by the Hong Kong Savings Bank for non payment of mortgage loans totaling $14.3 million; the value of the Channel Ridge property was estimated at $32.8 million at the time. This debt was then acquired by the Equishare Mortgage Investment Company, comprised of some 400 Channel Ridge Properties shareholders, in an effort to protect their original investment. By 2012, their debt had increased to $45 million, and the company went into receivership the following year.
The property was first listed for $17.5 million, then decreased to $11 million in 2014, until an offer of $6.6 million by Kelowna’s Viewpoint Enterprises was approved by the Supreme Court of British Columbia under a court-ordered sale. Because of growing water concerns and the Water District’s moratorium on new water hookups, Viewpoint backed out of the deal. Channel Ridge Properties and its first secured creditor, Paradigm Mortgage Investment Incorporated, filed a lawsuit against the North Salt Spring Waterworks District and the Salt Spring Island Water Preservation Society, demanding compensation or the return of the 272 acres of St. Mary Lake watershed land. Included in the lawsuit was Salt Spring’s Islands Trust Committee, on the grounds that it had approved post-1986 property developments that required potable water from St. Mary Lake.
The debt the company owed had grown to $56 million a year later, in 2016, when it was acquired by Vancouver-based Onni Group, which only had to assume responsibility for $5.65 million of the $12 million owed to Paradigm Mortgage plus $100,000 to the other sixteen creditors involved.
Onni Group has made no move towards development since that time, and the original lawsuit initiated by Channel Ridge Properties and Paradigm Mortgage still stands under Onni’s ownership, according to a 2018 update on the Water Preservation Society website.
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