Feds: Keweenaw County must sell lodge at fair-market value
EAGLE RIVER — The Department of Agriculture Rural Development (RD) has directed the Keweenaw County Board to sell the Keweenaw Mountain Lodge to settle the county’s outstanding debt to RD, according to a letter from RD.
After a wait of several months, board members received the response to a Nov. 2, 2016, letter from Charles Miller, county prosecutor, and a Dec. 6, 2016, letter from Board Chairman Don Piche pertaining to alternative proposals regarding refinancing the Keweenaw Mountain Lodge.
The response, dated March 3, came from the U.S. Department of Agriculture Rural Development.
“The government is not interested in, and hereby rejects, the three alternative proposals outlined in the attachment to Mr. Miller’s letter,” the letter states, “and the $100,000 cash settlement offer contained in Mr. Piche’s letter.”
The letter goes on to state the government recognizes that ever since Keweenaw County issued three bonds, described as “the bond,” the KML has consistently lost money, and that for several reasons the county has been unable to meet its financial obligations under the terms and conditions set forth by the bond.
“The government also realizes that the facility’s financial health is unlikely to improve so long as the facility remains under the issuer’s ownership and/or management,” the letter states.
The letter then set forth the terms and conditions under which the County Board must proceed with the sale of the mountain lodge.
“At closing, the government shall be entitled to receive 100 (percent) of the sale proceeds (after deducting closing costs),” the letter states, “up to the amount of all then-outstanding bond debt (including accrued interest of any applicable penalties).”