Homburg deal hits snag, cut him lose
By Stephen Pate
Dr. (sic) Richard Homburg, putting Ghiz in the lobster pot
NJN News
January 7, 2009
The Guardian is reporting Hotel project may move to new locale
Dr. Richard Homburg bought his honorary doctorate from St. Mary’s University after donating $1.5 million. He recently donated another $5 million to St. Mary’s. His name is spelled Homburg, not Homberg as some media stories have spelled it. The money comes from banks in Holland where his company trades on the stock exchange.
The real story is Homburg can’t raise the rest of the money. Who can borrow money in today’s financial crisis? Iceland is about to go bankrupt because it put trust in international banking. Leahman Brothers in NYC went bankrupt.
Ghiz should cut his losses with Homburg.
We don’t need another luxury hotel and Mr. Ghiz you’re going to need the money for social programs not patronage. Or maybe just to stave off Provincial bankruptcy.Some of us were around when the Province wasted $30 million on one of the fanciest hotels I’ve stayed at – the Delta. It was sold for what it was worth – $1 million when the place went bankrupt.
Lest you think me a person of no class, I’ve rested my head at the Comfort Inn, at the Drake in Chicago and some of the finest hotels in the world. One NYC Fifth Avenue suite cost me US $2,700 per night, maybe not worth that but pretty fancy with a suite off Central Park filled with expensive artwork and priceless furniture.
The Delta is more than we deserve for a little province of 135,000 people. It’s a beautiful hotel well run by local management and employees. The silly thing is the Delta is not fully booked all year long. Are we going to put them out of business?
Cut Homburg lose. He will never be able to pay back the $30 million and will come crying to us when he can’t. Developers are not a reliable lot of people. They dream big dreams but often overshoot reality.
Homburg is a pretty sharp character. The hotel will be owned by an LLP. Their website boasts
“Homburg Invest Inc. (HII) has its head office at Suite 600, Brunswick Street 1741, Halifax, Nova Scotia, B3J 3X8. HII owns the majority of its property assets indirectly via limited partnerships (referred to here simply as ‘the Partnerships’).
LLP’s are the lobster trap of business financing. You put money in the trap but you can’t get out alive: it’s trap to lobster pot.
While Homburg will control the property, all shareholders, bond and loan holders can only sue the LLP not Homburg for default. At the right moment, Homburg will tell the Province he can’t repay the $30 million and default.
Likely the Province won’t have enough leverage to take the property. In any event, Homburg will have banked a tidy profit on the construction and may be willing to let the property go. What’s your bet that Homburg can wind Robert Ghiz around his little finger.
This happens all the time. LLP’s are a trick to keep the rich richer and naive impoverished. Where did the unpaid debt from the Delta go? To you and me ladies and gentlemen: it’s part of the national and provincial debt.
LLPs are hiding the PNP money and they will vanish into thin air when we are left making refunds to the Chinese immigrants. It’s happening in Nova Scotia just across the Strait.
As we reported,Homburg plans $45 million hotel – Ghiz gives them $30 million is the wrong use of taxpayer’s money.
At worst it’s Premier Ghiz spending our money on propping up the rich and powerful oligarchy.
