During the last several years of litigation, we have had to research many of our historical documents and interview many of the association’s founding members. We thought that it would provide invaluable information for current and future cottage owners to be cognisant of the role that our friend and neighbour, Doug Struthers, and his friends from the Steinbach/Winnipeg area played in the formation of the Buffalo Point real estate development. Their legacy is outlined in the attached essay that was written by Doug. For future reference, this essay will remain as a permanent document on our association website.
A HISTORY OF BUFFALO POINT
By Doug Struthers
The following is a short summary of the history in the development of Buffalo Point.
I am also writing this to let people know how investors and cottagers and others have played a very large part in making Buffalo Point the successful community that it is.
I knew Buffalo Point & Jim Thunder long before the development of Buffalo Point. I played the odd game of baseball against Jim as he played for Middlebro and I for Sprague. I also heard my sisters and their friends speak of what a good looking young fellow he was. Buffalo Point at that time was only accessible by boat from Warroad, MN during the summer and by winter road in the winter. People from Warroad said the nicest beaches on the Lake of the Woods were at Buffalo Point. I also saw for myself how beautiful a property it was when I went on fishing trips to Buffalo Point from Warroad. At that time there was no one living at Buffalo Point and it was a gorgeous, undeveloped area and the Americans had the best access to it.
In the 1970’s I was living in Steinbach and working for the Province of Manitoba as the District Engineer for the Department of Highways & Transportation. Around the mid 70’s I received instructions from head office that Buffalo Point First Nation was looking for help to build a road to Buffalo Point. I was to meet with Chief Jim Thunder and to provide him the best location for a road, survey the location and make an estimate of the costs. It was the Department’s policy to only provide free engineering to the First Nation Reserves. It was up to the First Nation or the Federal Government to pay the construction costs. Once the road was constructed and traffic volumes met a certain number the Department of Highways took it over and maintained it as a main market road. The estimated cost in 1976 was $250,000.00 to build the road from PTH 12 to Buffalo Point. At that time the Highways Department was widening PTH 12 in the area so Chief Jim took out a personal loan for $10,000.00 and hired Ericson Construction to build a short section of the road on the higher ground East of PTH 12.
Some time prior to this, Jim had convinced the Federal Government of the potential at Buffalo Point and they had sent out an engineer from Prairie Farm Rehabilitation to do a survey and report on the Reserve and its potential. It was a positive report and recommended where the marina, roads, cottage development and camp grounds could be located. Shortly after, funding was found to clear the roadways on the reserve and to survey a cottage development near the East shore. At that time it was all the help the Federal Government was willing to provide and Jim was looking for financial help. He told me that both the Province of Manitoba Parks Branch and a developer from Toronto were interested but both wanted a very long lease and that he or the band wouldn’t have any say in the development. This would not work for them as Jim would only be a figurehead chief. Jim told me about the cottage lots that were surveyed near the East shore and wondered if there would be any one interested in purchasing these lots at $5000.00 per lot. If he could sell 50 lots at that price he would raise the money required to build the road. I offered to set up a meeting in Steinbach so he could make a presentation to whoever might be interested. We went ahead with this meeting in the late fall of 1976. It was held in the Steinbach Curling club and it was attended by 60 to 70 individuals. There was mild interest and so on a very cold day in December a committee of about ten drove out to Buffalo to view the lots. We were able to drive across the bog and out to the East shore on a winter road. It was then a tough and cold hike along the shore and back into the bush where the lots were laid out. It was the groups consensus that the lots were too far from the shore and situated in very heavy underbrush and therefore not of interest.
Early in January 1977, I was talking to Jim and came up with an idea, what if I could get a number of people together and raise the $250,000.00 needed for the road – in exchange we would get a piece of property on the South shore to develop. Jim didn’t think that would work and the idea was dropped.
One late afternoon in early March 1977 Jim Thunder, Councillors Frank Thunder and Eddy Cobiness dropped into my office in Steinbach. They were pretty disheartened. It seemed their quest for financing was going nowhere. I again brought up my previous offer to raise the $250,000 and suggested that if we could get an agreement on the offer quickly we could possibly take advantage of winter construction and in the process save them a good amount of money. The conditions that winter were ideal for building a road across the bog. Eddy and Frank were surprised by the offer and asked how come Jim had not told them about it sooner. It was quickly agreed that we should go ahead with the plan as long as I could find the investors. I told them for the $250,000.00 we would require an area twenty-one hundred feet square (approximately 100 acres) on the South shore. Jim’s conditions were:
- The area had to be 400 feet east of the existing buildings on the South shore.
- The area had to be 200 feet from the shore to allow public access to the beach.
As we shook hands and they left, it quickly dawned on me that I had a lot to do very quickly as I was leaving in two weeks on an African and European holiday for six weeks. I quickly listed the things to do:
- 2100 ft of lake frontage would require twenty investors who would each get a 100 foot lot and allow for five 20 foot access walkways for the back lots.
- One of the investor would have to be a lawyer to help draw up the agreement
- Draw up the agreement
- Make sure I was not in a conflict of interest with my job in the Department of Highways.
- Find a contractor who would be ready to start work almost immediately.
- Incorporate a company.
- Find a lending institution that would lend us the extra $150,000.00.
I started by calling a lawyer who was a fellow member on the Steinbach Planning Commission. He was definitely not interested. Feeling a lot less optimistic I started calling friends, relatives and colleagues. Anyone interested would have to have their $5000.00 cheque available in the next two days. I hoped I would get 20 including myself that I needed but added that I couldn’t have anymore. It would be on a first come basis, and I hoped I would get a good response. That evening I got in touch with lawyer Bob Smith and he was quite enthusiastic and wanted to be in the group. He thought two of his colleagues might be interested. I was quite surprised by the response to my phone calls as I had twenty-one investors very quickly. The last two arrived at the same time, what a dilemma! Not wanting to turn anyone down, I quickly decided there must be a way of dividing the frontage up into 21 lots and still have walkways. Later when drawing up a lot plan of the area, the late Al Boychuk, a planning engineer and investor came up with an excellent plan which was approved by the group. Another investor was Tony Schreyer who owned Schreyer Construction and was willing to move his equipment to the site immediately and begin work at Department of Highways hourly rate once the project was approved.
The following night after first talking to Bob Smith about being an investor, we met at his office and drew up a fairly detailed agreement between Buffalo Point Development Corporation Ltd. (BPDC) and Lake of the Woods Investment Company Ltd. (LWIC) (Bob had checked with the Registrar to see if this company name could to used). The draft agreement had a number of clauses to protect the investors and a schedule for work to be completed by the BPDC.
Lake of the Woods Investment would be responsible for everything on its property and BPDC would be responsible for constructing and maintaining of their roads, constructing a marina, providing hydro to Lake of the Woods property boundary and building a sewage lagoon. The sewage lagoon was not provided at that time but constructed much later and was very controversial. The agreement was dated March 15, 1977 and approved by Jim and council. It also had to be signed by all investors as we were not a registered company at this time. Also because we were not a registered company all investors had to sign for the loan at the bank.
Schreyer quickly moved in with equipment and the road was underway. At that time I also had assurance from the senior staff in the Department of Highways that I and none of my fellow employees who were investors were in a conflict of interest. Upon return from our trip I was pleased to find the road not only roughed in to Buffalo Point but had been constructed all the way to the proposed marina. The roughed in road was trimmed up that summer and the total contract costs were around $156,000.00 leaving BPDC with a nice surplus for other work.
That summer both BPDC and LWIC had their properties legally surveyed and registered with both the Federal Government in Ottawa (Indian Affairs) and the Winnipeg Land Titles. Buffalo Point, the first phase of cottage lots on East shore and LWIC the cottage development on the South shore. In the meantime LWIC developed a lease agreement for selling individual lots and BPDC approved it and also adopted it for the sale of their lots. The lease was based on the Provincial Parks Branch lease except we included an arbitration clause. At the same time LWIC developed regulations for the construction of cottages which were included with the agreements. Clause 6 of the regulation stated “Installation of plumbing, sanitary fixtures and sewage disposal facilities must comply with regulations of the Department of Health”.
Upon phoning the Federal Department of Health I was told that the requirements on Indian Reserves were the same as the Province in which they are situated. I then checked with the Red River Health unit in Steinbach and they advised me that only toilet sewage had to go into the holding tanks and that “grey” water pits were legal.
In the spring and summer of 1978 we arranged to have our development roads cleared and constructed and LWIC also began advertising lots for lease. The first cottage constructed at Buffalo Point was on lot 56, this was to be LWIC sales office for the next several years as my wife and I used it to sell leases on the weekends. Surprisingly, we had a very good response that first year as we sold 55 leases including the 21 to LWIC shareholders. BPDC also did quite well that first fall and in the summer of 1979 cottage construction was well underway even though there was no hydro power available. One of the reason lot leases sold well is that people were told by both BPDC and LWIC that this was federal land and there would be no school tax.
On February 21, 1979 BPDC and LWIC signed a co-development agreement for the orderly development of Buffalo Point. It gave LWIC two representatives and BPDC three on a management committee. This committee was to establish development conditions for Buffalo Point. In effect, to set rates, levies, charges, duties and assessments, determine regulations, set building codes and establish orderly management of Buffalo Point. It also provided for LWIC to pay for services provided by BPDC such as maintenance of roads, sewage lagoons, garbage pits etc. LWIC paid these levies for all 138 lots to BPDC regardless if they were leased or not.
In 1979 LWIC paid BPDC $100 per lot or $13,800, for services and an increasing amount each year there after until all the lots and responsibilities were assigned to BPDC in 1985. These rates were worked out very amicably between BPDC and LWIC during that time.
The Regulations called for the cottage shell to be constructed within two years and to have at least 600 sq. ft. of living area excluding verandas. Cottages were to be located at least 20 feet from the side or rear property lines and 35 feet from the front property line. Each lessee had to submit a lot plan showing the cottage location and it had to be constructed according to the National Building Code. No pit toilets were allowed. When LWIC divested and assigned the leases to BPDC in 1985 all cottages had been constructed according to regulation as they had been thoroughly checked during construction.
It was an exciting time as there was a flurry of cottage construction on both East and South shores. This was the beginning of making Buffalo Point the successful community that it is today. Neighbors helped neighbors and cottagers got to know each other.
Even though we were off to a great start, hydro power was a necessity and negotiations with Manitoba Hydro got under way. BPDC was to provide power to Buffalo Point and to their East shore development, and LWIC to provide power in its South shore development. It was a time of very high interest rates in the early 1980’s as the bank rates got as high as 23%. Jim told me he had to pay 19% for the loan to bring power to Buffalo Point. I understood that Manitoba Hydro charged BPDC between $250,000 and $300,000 to bring power to Buffalo Point. I would assume BPDC would have received a lot of their investment back as Manitoba Hydro’s policy was and still is to charge the full cost of hydro construction costs to the developer and to make annual rebates based on how many homes, cottages and businesses hook up to power.
LWIC paid just over $60,000 to Manitoba Hydro for installing power lines in their development. To make our development more attractive LWIC had their internal road ways cut out just wider than was required for the road and hid the hydro lines on the walkways. The cost of doing this was more expensive than having hydro on the roadways but it made our development more appealing. The first cottages on South shore hooked up to power in 1982.
The economy had gone into recession in the early 1980’s. The investors in LWIC had not gone into the development business for the long term, and as BPDC had met all its commitments except for the lagoon, in 1985 we assigned our 98 sold lots and sold the remaining 40 lots to BPDC. The majority of the LWIC investors had a lot and lake front cottage on Lake of the Woods and that was their original plan when they invested. When LWIC closed it’s books and went out of business that year it had spent between $450,000 and $500,000 on it’s development, including the original $250,000 for the road. The 40 lots we sold back to BPDC were sold at a bargain price of $2000 per lot.
In 1990, 91, 92 Buffalo Point got its biggest boost from the Provincial Government. It was provided by the Minister of Highways and Transportation, the late Honourable Albert Driedger. It was the asphalt paving of the Buffalo Point Road from PTH 12 to the Buffalo Point Marina. It was the Department’s policy at that time if an existing road to and Indian Reserve was to be upgraded the cost would be shared on a 60/40 basis. 60% by Indian Affairs/Band and 40% Provincial Government. When the public right-of-way (R.O.W.) ended at the reserve boundary the participation by the Provincial Government ended there. If there was a public R.O.W through the reserve to serve either public or private land beyond the reserve it participated on the same 60/40 basis. It also participated on this same basis if the road ended at a public dock on a navigable lake which would be open to all boat and vehicle traffic.
On this basis the Provincial Government would take over all future maintenance and upgrading of the road on the portions it participated in. At that time is was estimated to upgrade the road from PTH12 to the marina and surface it with bituminous pavement would cost $2 million. Because of poor soil conditions it would cost $1.34 million from PTH12 to the reserve boundary and $660,000 from the reserve boundary to the marina on much better soil conditions. Since the road through the reserve was not a public road in the name of the Province, the Minister asked me to approach Jim to see if the band would give up a public right of way through the reserve to a public dock so the Department could participate on the full length of the road. I then met with Jim and John Thunder and after thinking about it for a short time Jim said no! They couldn’t give up the R.O.W. to the Province. At this time the Dept. of Indian Affairs (INAC) had also told Buffalo Point they had no money to participate in this project and Jim said BPDC certainly couldn’t raise their share ($1.2 million) of the project. With no public R.O.W. under the Department’s policy, it could only participate on 40% basis on the portion of road from PTH 12 to the reserve. If the road was to be paved under that policy the Departments share of 40% would only be $536,000 leaving BPDC to raise $1.464 million to upgrade the road to the marina.
The Department of Highways would only then maintain the road from PTH 12 to the reserve. After I reported back to the Minister he was disappointed and asked me to look at any other ways the Department could help them in providing pavement to the marina. He felt the reserve had done a great job to date and they needed some extra help to make the development really successful. He said “a very successful development at Buffalo Point Indian Reserve would be a good example for other reserves in the province”. After some time thinking about it I came back to the Minister with a possible solution. Since the road from PTH 12 to the reserve is approximately 4 miles and the road on the reserve is approximately 6 miles, if the Department paid for the 4 miles and the INAC/Buffalo Point paid for the 6 miles it would at least look like we are participating on a 60/40 basis even though the Department would not be participating financially on that basis. Under this proposal the Department of Highways would contribute $1.34 million (67%) and INAC/Reserve $660,000 (33%). The minister thought that this could work for the Department and asked me to again contact the Chief to see what he thought.
At this time INAC, under some pressure from the Province had found some funds to participate in the project but insisted that Buffalo Point First Nation would have to give up one half of their base annual allocation to the project. At that time Buffalo Point base allocation must have been approximately $300,000 as Buffalo Point was required to contribute $150,000 of it to the project. When I met with Jim and John they were quite happy with this proposal but were not so happy to give up one half of the base allocation.
Knowing there was gravel on the reserve I suggested to Jim & John why not allow the Department of Highways to come in and test the deposit to see how much gravel there was and we could possibly make a deal to buy the gravel for the upgrading at prices the Dept. was paying near built up areas in the province. This worked out very well for Buffalo Point as in the end INAC agreed to waive the requirement for the band to contribute one half of their annual year’s base allocation. Buffalo Point got a paved road at no financial cost to them; all they had to do was to supply the gravel. What a deal! At a later date Jim said to me “the paving of the road to Buffalo Point made Buffalo Point”. It was the biggest thing to happen at Buffalo Point since building the original road.
Under paragraph 23 of the original agreement between BPDC and LWIC dated March 1977 BPDC agreed that it would maintain the road system within the demised lands, pickup garbage, pump out sewage tanks, etc. at a cost in line with accepted rates for similar services provided elsewhere in the Lake of the Woods area and in the Province of Manitoba. Because of this clause over the years I had randomly checked what other cottagers were paying elsewhere for similar services. Over the years the rates at Buffalo Point had risen slowly but had remained reasonably close to what other cottagers were paying even though in most cases Buffalo Point’s rates for services were on the higher side.
In 1998, John who had become heredity chief in 1997 decided that the annual rate for services had to increase quite drastically. The rate in 1997 was $435 and John wanted $575 in 1998, $700 in 1999 with a further large increase in 2000. At the spring meeting of the Buffalo Point Cottage Owners Association (BPCOA) it was decided that if we couldn’t change John’s mind we would go to arbitration as provided under our leases. We then had the annual fees paid into a trust account. I was later appointed by the executive to act as BPCOA arbitrator. As part of the negotiations we did a review of what other cottage areas in Manitoba were paying. In the Whiteshell Provincial Park service fees in 1998-1999 ranged from a low of $260 in Brerton and Nutimak Lake to a high of $467 in Falcon Lake Town site where garbage pickup, paved roads, sewer and water are provided. We also checked what was being paid in the RM’s of Gimli, Victoria Beach and Lac du Bonnet as municipal taxes on cottages on privately owned land. Excluding school taxes, in Shorewood Estates (RM of Gimli) lakefront cottages averaged $752 per year and back tier $432. In Victoria Beach $613 lake front, $461 back tier. In Lac du Bonnet (Lee River) $511 lake front, $173 back tier. The 1997 service fee rate of $435 was certainly in line with the rates paid elsewhere as the majority of lots at BP are back tier lots.
John refused to lower the 1998 service fee and he was formally requested to name an arbitrator for BPDC. He named himself. Under the terms of the arbitration in our leases John and I had to agree on a third member of the arbitration board to be chairman thereof. I brought a list of qualified candidates who were available to act in this capacity to a preliminary meeting with John, but he had another suggestion to resolve the impasse. He had met a person who he thought would be helpful in this regard. His name was Dennis Depape of the Inter Group Consultants and he had offered to facilitate the dispute. Denis would provide his time for free for the three meetings between three members of the BPCOA and the three members of BPDC to try to facilitate a consensus. After I spoke to Dennis, we agreed to accept hits offer. Richard Jupp, Peter Dyck and I represented BPCOA. The meetings went very well and the outcome was “The Buffalo Point Joint Planning Committee Terms of Reference” dated 2000 and the “Co-Management Agreement” of the same year. Using generous estimates for hours and rates we then worked out budgets for 1998 and 1999 and even though they came out lower than the $575, they were higher than the $435 we paid in 1997. It was then agreed that we would recommend to the cottagers to pay the $575 for 1998, but further annual maintenance fees would remain at $575 until the actual operation costs exceeded that amount. This committee also agreed to work on a formula for lease extensions and shortly after successfully did so. A large majority of cottagers subsequently extended their leases for 75 years. At this time Buffalo Point also began selling 75 year leases.
The next few years after signing the Co-management Agreement everything ran quite smoothly. John did bring up that he would have to build a sewage lagoon at various meetings suggesting that the cottagers would have to contribute. My position on the committee was that under the original agreement with Lake of the Woods Investments the lagoon was to be constructed by BPDC. A sewage lagoon under that agreement should have been built at least 20 years earlier. All sewage had been dumped on the ground surface at the NW corner of the reserve over the years. BPDC needed the lagoon so they could construct the Convention Center and a future hotel. If they wished the cottagers to take part and pay some of the costs our committee would have to be consulted. On arriving back at BP in the spring of 2007 I was quite surprised to find the lagoon and force main had been constructed during the winter. Since John had not involved the Buffalo Point Joint Planning Committee I originally thought that BPDC had gone ahead on its own as required under the 1977 agreement with LWIC. It was not what had been planned as we soon received an invoice for $1852 to be paid by October 1st, 2007.
A BPCOA committee of President Don Plett, Randy Wohlgemuth, Peter Dyck, John Neufeld and I was setup to try to negotiate a settlement. After a number of meetings it became obvious that BPDC was not prepared to give on the invoiced amount. Therefore it was decided to hire a solicitor, Mr Neil Duboff of Duboff Edwards Haight & Schacter to represent the cottagers in any further negotiations with BPDC. Neil is an expert in aboriginal law. At the initial meeting with BPFN (Buffalo Point First Nation) and BPDC Neil spoke about how important Buffalo Point is to both the cottagers and the First Nation. For most cottagers it was their home away from home and for some their actual home. It was a wonderful place and we wished to preserve it. Everyone was concerned about negative publicity. We didn’t wish to go to arbitration or court and hoped we could negotiate a reasonable settlement for all.
After some good discussion it was agreed that if the cottagers would pay the assessed amount over four years that BPDC would agree to a new agreement which would be binding on both BPFN and BPDC. The agreement would provide the cottagers in addition to the existing annual service fees a say in any future developments that might affect them. If this could be worked out there would be no need to go to arbitration. At the conclusion of this meeting Chief John offered to pay half the costs of the new agreement. This tentative agreement was taken to the executive and with the recommendation of our solicitor it was agreed to proceed on this basis. Over the fall and winter of 2007 – 2008 the new agreement was negotiated and on April 16, 2008 it was signed by John Thunder for both the BPFN and the BPDC and by Don Plett representing BPCOA. The agreement took effect May 1st 2008 and is a binding, living agreement that gives the cottagers a say in anything that effects them regarding future development and in setting rates, fees and taxes at Buffalo Point.
Buffalo Point Development Corporation and Buffalo Point First Nation over the years has constructed a very successful marina and campgrounds, an excellent golf course, a very unique administration building and an impressive convention center. We all know that it is not only buildings that make a community. It is people! At Buffalo Point it is the people, summer cottagers and residents who choose to live there year round. People volunteering. People who put on the Annual Picnic, the Ladies Breast Cancer Golf Tournament, the Annual Fishing Derby etc. Those people who spend hours volunteering their time on behalf of the Cottage Association. People enjoying the lake, relaxing and having fun. Buffalo Point has been a great place to live and to meet new neighbors and develop new friendships.
- Raised in Sprague, Manitoba
- Attended University of Manitoba
- Graduated with a BSc (Civil Engineering)
- Started with the Department of Highways, Province of Manitoba as a Resident Engineer in Winnipeg 1959.
- Held various positions with the Department as a Professional Engineer at Lac du Bonnet, Steinbach and Winnipeg.
- Retired in 1996 as Assistant Deputy Minister of Highways and Transportation after 37 years of service.
- Since retiring have spent the majority of time with wife Evelyne enjoying our home at Buffalo Point.
LAKE OF THE WOODS INVESTORS 1977