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Cracks were showing in Westbank First Nation's private hospital plan last year

The West Kelowna building where Ad Vitam rented office space.
June 27, 2015 - 3:36 PM

WESTBANK FIRST NATION - Despite assertions from the partners behind Canada’s first for-profit private hospital that it is proceeding as planned, documents show the deal to develop the Lake Okanagan Wellness Centre was in disarray last year.

When it became clear in October 2014 that Ad Vitam Health Care was out of money and unable to pay rent, the company entered negotiations with a private landowner on Westbank First Nations to leave its partnership with the band, according to documents filed with the B.C. Supreme Court.

Ad Vitam has been working in partnership with Westbank First Nation since 2011 to build the hospital for $120 million to $150 million. The band’s commitment was 20 acres of prime real estate overlooking Okanagan Lake and Ad Vitam was to raise financing and manage the facility.

In March 2013, the company secured a commitment letter from Oxbridge Group of Companies for $150 million in financing but the cash never materialized and neither the band, nor Ad Vitam directors Mark McLoughlin and Lyle Oberg will say when or why it was pulled, in part because the matter is being investigated by the RCMP.

Both Oberg and McLoughlin say the project is back on track with a new funding partner, but couldn’t give specifics.

However in response to the lawsuit for defaulting on its office lease, filed Dec. 31, 2014, Ad Vitam said when “the development became stalled” and it could no longer pay $8,400 rent for the entire fourth floor of a building in Estates Square on Old Okanagan Highway, the company turned to landlord Noll Derriksan, himself a grand chief and former chief of Westbank First Nation, to renegotiate.

“The parties reached an agreement for the wellness and medical clinic to be built on lands to which the plaintiff holds a certificate of possession rather than on lands directly in the name of WFN,” the counter claim says.

The partners contemplated a scaled down version of the project at $50 million and agreed Derriksan would attempt to raise the money from private lenders in exchange for a finder's fee.

Ad Vitam said the relationship broke down when Derriksan made "certain demands" and made other, unspecified allegations he attempted to interfere with the development.

None of the allegations have been proven in court. No further filings were made by Ad Vitam and a default judgment was registered for just shy of $150,000.

Contacted earlier this week, Oberg would only say Ad Vitam decided the office was too big for its needs and opted to vacate.

“We felt we didn’t need the space at that point in time. It was a large space and… we didn’t know if the project was going to ahead at the time (and) we had a dispute with the landlord,” he said.

McLoughlin said Ad Vitam would deal with the matter in time but refused to speak about the secondary negotiations with Derriksan.

“A lot of groups are very interested in building a facility,” he said. “It is of high interest to a lot of people. We continually get calls… or levels of interest around what that could look like. That is not an uncommon thing for someone to look at building the facility. Anybody can go out and build the facility if they have the capital to do it.”

Derriksan confirmed they were in negotiations but denies he interfered in the deal. He says he tried to connect the project with two different venture capitalists from overseas but they wouldn't touch it.

“I had several investors that might have taken this deal but what they were missing is approval, some evidence they would be allowed by (Health Canada) to do this. I had one guy who would normally jump all over this type of thing but he never even responded.”

To contact the reporter for this story, email John McDonald at jmcdonald@infonews.ca or call 250-808-0143. To contact the editor, email mjones@infonews.ca or call 250-718-2724.

News from © InfoTel News Ltd, 2015
InfoTel News Ltd

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