An affiliate of Correct Group, a construction and development firm, purchased a portion of the former Milford Bay resort in 2006.

The company’s planner James Dyment said Correct Group was told by the township’s planning department at that time that the lands are zoned community commercial, allowing for hotel, restaurant and resort uses.

Currently, the site contains a nine-hole, par-three golf course.

Alan Furbacher, Correct Group director of operations, said the company wants to improve the golf course, as well as create a high-end resort/cottage development on the site.

It recently learned, however, that the property is zoned residential and open space, permitting housing, agricultural, extractive and park or private club uses.

The property was reportedly rezoned to open space in 2000 at the request of former owner Lloyd Ross. The new zoning was never accurately recorded in the municipality’s schedules.

“It’s a very uncomfortable feeling,” said Furbacher, adding he has been upfront about his development plans from the beginning. “We’ve spent a lot of time and money to get to where we are.”

While Furbacher has since submitted an application to return the property to its original commercial classification, he is now facing several hurdles.

Despite an agreement of purchase and sale that requires the former property owner to support the redevelopment of the site, Ross and family are now opposing the redevelopment on the basis that Furbacher’s property is too small for such a commercial operation.

Originally, the Milford Manor property was more than 90 acres and had more than 1,500 feet of frontage on Lake Muskoka, said planner Marg Walton. Walton, who is representing Ross, said the lands now owned by Correct Group are only 27 acres, with about 125 feet of frontage.

During a Muskoka Lakes council meeting April 15, Walton argued against a staff recommendation to rezone the property to commercial. Furbacher’s property, she said, is not even considered a buildable lot in a resort commercial zone.

“I understand mistakes may have been made,” said Walton, noting the zoning mix-up. “That is no reason to abandon the appropriate planning process.”

Ross could not be reached for comment.

Local planner Bob List, who acted as Ross’s planner when the Milford Manor property was down-zoned in 2000, has also criticized the application. List alleged that the soils and rock outcroppings would make for “serious flaws” in any sewage services developed on-site. He went on to say staff’s rationale for returning the property’s commercial zoning was “fundamentally flawed,” as no concept plan for the site has even been produced.

According to a report by township director of planning Stephen Fahner, staff is supporting the rezoning because the property was originally zoned commercial prior to the year 2000. Staff never supported removing the commercial designation, Fahner said.

Further, Fahner’s report said rezoning the site would not automatically grant it development rights. Those rights could be considered when and if a further application for a zoning bylaw exemption is made.

Nevertheless, several councillors said they wanted to look at the matter more closely before making any decisions.

“I’m not sure I can make a decision with no reports at all,” said councillor Mary Grady.

Mayor Susan Pryke suggested seeking legal advice before making any decision on the matter.

“I think a postponement would be wise,” the mayor said.

Furbacher, said Fahner, will have to provide more information on his plan for the property before his rezoning application is reconsidered by council.

“The ball is back in their court at this point,” he said Monday.

Fahner declined to comment on potential litigation stemming from the application.

Furbacher, meanwhile, said the required reports are costly and could mean the end of the golf course. The course generates no revenue for Correct Group, and would be considered a liability should negotiations over the application drag on.

“We have been attempting to resolve this amicably,” he said. “But now the question has arisen: is it feasible for us to continue operating the golf course?”