Island resort ‘nightmare’ worsens for owners

THERE'S a new twist in the seemingly never-ending troubles that have befallen the billionaire's dream-turned-nightmare that is the Couran Cove Island Resort.

The two companies that supply the resort's infrastructure and maintenance services are suing the umbrella body for the six bodies corporate.

They allege they are owed more than $5 million in total by the Couran Cove Resort Community Body Corporate.

There's no indication on court records whether the claims will be defended.

The action is the latest chapter in the resort's 22-year life, one that is not characterised by plain sailing.

Couran Cove was a dream that has become a nightmare for its owners. Picture by Scott Fletcher
Couran Cove was a dream that has become a nightmare for its owners. Picture by Scott Fletcher


The move against the body corporate comes as a $17 million transaction that would see control of the resort move to boutique Sydney property and investment group EDG Capital is in apparent limbo.

The deal, announced 15 months ago, involves EDG assuming control of much of the resort from the Onterran group.

The transaction appears to have been complicated by Onterran, which is delisted from the ASX, calling in administrators last year.

The two companies involved in the action against the body corporate are in the hands of parties associated with EDG.

Former Couran Cove Island Resort owner Craig Dowling exited in 2015.
Former Couran Cove Island Resort owner Craig Dowling exited in 2015.

 

Island Resorts (Facilities and Equipment) and Island Resorts (Infrastructure) pay suppliers and then, according to the statements of claim, invoice the community body corporate every four months

A Couran property owner says it's costing more than $3.5 million a year to service and maintain the resort and supply it with such things as fuel.

The resort, which has more than 350 developed properties, has six bodies corporate and it appears three of them having been paying their way.

They represent owners of more than half of the resort's 'homes' and it seems some of the owners of the other 150 or so titles also have been paying their levies.

Meanwhile, the EDG Capital team has a bigger foot in the door at Couran Cove than just service agreements - it or related parties own a number of properties and the group last year bought the management rights to the resort.

Couran Cove promised a new adventure in Gold Coast tourism when it opened in 1998 but its initial lustre faded and it was sold by receivers in 2012.

New owner Craig Dowling found that enthusiasm doesn't guarantee financial success and exited in 2015 after a rough time with management staff and with the resort's bodies corporate.

At one point he asked the Quinn Group, linked to John Quinn, to resign as the resort's asset manager because of owner unrest.

Couran Cove Island Resort, South Stradbroke Island.
Couran Cove Island Resort, South Stradbroke Island.

Onterran, it seems, also hasn't found the going easy.

The resort was built by US billionaire philanthropist Chuck Feeny and he's believed to have invested some $300 million.

Latterly, some of that went to pay levies and fees on unsold properties.

The resort made a loss of $85.9 million in the year to February 2011 and Chuck threw in the towel.

The Irish-American founder of Atlantic Philanthropies had set out 30 years earlier to help others and had, by 2014, given away his $7 billion-plus fortune.

His generosity was just what the doctor ordered for three Brisbane medical projects - he gave them $102 million all up.

Originally published as Island resort 'nightmare' worsens for owners


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