Popular hotel set to close with sale of building in Nunavut capital

Owners of the Waters’ Edge restaurant in Iqaluit are taking their landlords to court to maintain a rental lease for their business but building owners Northern Properties, says they’re selling the building and want the hotel and restaurant off the premises. A trial will ensue next week in Iqaluit (FILE PHOTO)

The imminent sale and closure of Iqaluit’s Hotel Arctic appears to be a certainty, according to affidavits recently filed in a civil suit challenging the lease of the Waters’ Edge Steak and Seafood restaurant, which operates within the building.

In statements submitted to the Nunavut Court of Justice, Northview Apartment Real Estate’s northern Canada regional vice president, Linay Freda, confirmed the sale of the Hotel Arctic, which NPR has operated since it purchased the then-Nova Hotel in 2011.

“I am aware the buyer of Hotel Arctic has plans for significant renovations as it does not plan to continue with the operation of a hotel,” Freda said in her affidavit.

The buyer of the property, which is a short distance from Iqaluit’s four-corners intersection, was not identified in Freda’s statements.

NPR’s office in Iqaluit declined to identify the buyer when contacted by Nunatsiaq News, citing an ongoing civil suit with Waters’ Edge.

The sale will be finalized on July 28, with the hotel closing for good on the same day, Freda said.

All that remains before the sale is finalized is to resolve a lease dispute between NPR and the Waters’ Edge Steak and Seafood restaurant, whose owners allege that they have a tenant’s agreement valid until August 2023.

Kim and Donna Waters, two sisters who own the Waters’ Edge restaurant, and its adjacent Kickin’ Caribou Pub, filed a civil suit against NPR and are seeking a legal injunction “barring the Defendant [NPR] from terminating the lease or from dispossessing the Plaintiffs from the premises.”

The owners claim they have a lease with NPR that began Sept. 1, 2012 and expires Aug. 31, 2017 in which they pay $19,000 per month rent plus “occupancy costs” of $4,150 per month, increased annually by five per cent from the start of the lease.

A lease extension, amending the current lease and extending its term to 2023, “has been agreed to. The lease has been renewed and the amendments acted on,” the owners said in a statement of claim filed with the court June 1.

If a judge finds that the restaurant indeed possesses a valid lease—in a trial scheduled for next week—the ruling could jeopardize the sale of the hotel, Freda says in her affidavit.

As part of its agreement with the hotel’s buyer, NPR is required to deliver “vacant possession” upon the closing of the sale, with the exception of the restaurant premises.

NPR believes that the current lease with Waters’ Edge is only valid until August 31, 2017, as the alleged lease extension referred to by the restaurant’s owners was never signed.

“I can confirm that NPR has no record of ever receiving a signed copy of the lease amending agreement,” Freda alleges in her affidavit.

If the restaurant remains in operation beyond Aug. 31, 2017, NPR could suffer “significant loss and damage” in the range of $1 million, Freda claims.

That’s because NPR would have to keep the building open solely for the purpose of the restaurant and suffer damages for added expenses incurred by the building’s new owners for continuing to operate with the attached restaurant.

A trial to determine the validity of the restaurant’s current tenant agreement is scheduled to take place over two days, beginning June 26, at the Nunavut Court of Justice in Iqaluit.