FOLLOW-UP

A sheikdom in distress

Anthony Wilson-Smith March 26 1984
FOLLOW-UP

A sheikdom in distress

Anthony Wilson-Smith March 26 1984

A sheikdom in distress

Anthony Wilson-Smith

The 750 full-time residents of North Hatley, Que., discovered five years ago that Egyptian businessman Saad Gabr had discreetly bought up half of the prime commercial property in their tranquil resort village in Quebec’s Eastern Townships, 160 km east of Montreal. Gabr made his purchases in 1979 through third-party agents. In one two-week period in February, 1979, he acquired the village’s two marinas, a hardware store, two restaurants, two service stations and a 10unit apartment building. During the next few years, as local residents learned about the extent of the previously unknown investor’s holdings, Gabr announced his intention to spend $50 million to turn North Hatley into an international resort centre and another $250 million to build a space research facility. Now most of the properties that Gabr bought are no longer in business. No one in the Eastern Townships has seen the man whom local people dubbed the “Sheik of Massawippi” (after the lake that the town overlooks) since last summer.

And no one seems to know when—or if—he will return.

For many North Hatley residents, Gabr’s ambitious plans and his generosity—he once paid a local restaurant owner $1,200 to drive some Saudi Arabian visitors around for a few hours—proved seductive. In addition to his schemes for resort and space research centres, he promised to build an electronics assembly plant, an export promotion centre and an institute of Islamic studies. Said North Hatley Mayor Ruth Taylor: “I think anyone can understand why some people were quite impressed with him.”

Gabr, 61, was always vague about his sources of financing. At times he claimed to have made his money by selling scrap metal in Egypt during the Second World War. At other times he attributed his wealth to a trust fund. Still, few people doubted that Gabr had the means to make good on his promises. The few local people whom Gabr, on rare occasions, invited to his house were overwhelmed by its grandiose fea-

tures, including two living rooms, which seated a combined total of 250 people under matching $100,000 crystal chandeliers. Gabr’s high-powered friends also impressed North Hatley residents—Pakistan’s President Mohammed Zia ul-Haq and Prince Faisal of Saudi Arabia have visited him.

Some residents had serious reservations about Gabr’s plans. They worried that his elaborate schemes would destroy the pastoral quality that has long made North Hatley a favorite summer retreat of Montreal’s anglophone elite. After his acquisitions became known, concerned townspeople pressured city

council to take some action to curb Gabr’s expansionism. At their urging, the councillors passed a stringent zoning bylaw limiting the size of buildings, which scuttled Gabr’s resort plans.

That setback did not discourage Gabr. He continued to buy property in and around the area. In June, 1981, he made his most spectacular acquisition: the 1,400-acre howitzer shell-launching compound of Space Research Corp., which he bought for $1 million after the company declared bankruptcy. Gabr said that he would transform the facility into a satellite-launching industry. In a familiar pattern, after he revealed his plans for the centre he abandoned the project.

Townspeople recall that in 1980, when Gabr invited them to a cornerstonelaying ceremony at the site of what he said would be a technology school, a small crane dropped the stone into a gap in a fake wall while Gabr, a zealous

Moslem, waxed eloquent about the Moslem-Christian world. The next day both the simulated wall and the cornerstone had disappeared, and the site once again became a parking lot. Said Taylor: “He started things and then seemed to forget them or bought things just for the sake of closing them.”

Last year townspeople for the first time questioned Gabr’s ability to pay his bills. Early in the year his company listed 46 properties in Quebec as security for two loans totalling $38 million. Then in August a bailiff, at the request of a Sherbrooke, Que., businessman to whom Gabr owed $295,000, seized 44 of his properties. At the time, Gabr also faced more than $1 million in lawsuits from former employees and building contractors whom he had allegedly not paid. In December Gabr settled the businessman’s claim out of court and had the seizure lifted, which allowed him to put the properties up for sale. But in January he ran into more financial problems when a lawyer, representing 10 former employees who claim that Gabr owes them almost $500,000 in salaries, obtained a court order to have a bailiff seize furnishings, estimated at $30 million, from Gabr’s home.

Townspeople believe that Gabr is in either Saudi Arabia or England. Because the man who had been his lawyer, Joseph Cassar of Sherbrooke, stopped representing Gabr for unspecified reasons last fall, he no longer has an official representative in the area. No one answers the door at his home—which locals have dubbed “Baghdad sur le lac”— even though two pickup trucks sit near the front entrance and more than half a dozen cars are parked at the rear. His telephones ring unanswered. While Gabr’s list of angry creditors is growing, Taylor says that his 1982 property taxes are fully paid, although he is behind in his 1983 payments. She seems unworried that Gabr will default. Said Taylor: “When I have to reach him, I know how to get him.”

So do the local real estate agents who have slowly been putting his North Hatley properties onto the market. A group of townspeople is negotiating to buy back the only gas station left in the village—Gabr had the pumps removed from the other—which closed in December. For many North Hatley residents, the loss of the gas station proved intolerable. Said resident Ronald Sutherland: “When I first came here, there were five gas stations, and now there are none. I can forgive or forget a lot of the bizarre things he has done around here, but every time I have to drive eight miles just to fill up, I can’t forgive that.” As their town struggles to return to normal, most North Hatley residents now fear that Gabr’s money has gone the way of his gas pumps.