From anywhere along the waterfront in picturesque Summerside, you can see it – the notorious ghost resort looming over the red shoreline. In its 35 years of existence, the luxury resort and spa has never had a guest, unless you count the starlings that live in the rafters.

Clouds have been hanging over the Prince Edward Island resort formerly known as Dynasty Spa since 1994, when it went bankrupt. The past owners were later convicted of fraud in cases related to the property.

The current owner, Toronto-based Shizhong Liu, who also goes by Sean Liu, bought it 21 years ago, but it has continued to stand empty.

Mr. Liu has long promised to reinvent the resort.

Various plans have never come to fruition. The latest iteration styles the property as the PEI Ocean View Resort & Golf, a five-star holiday retreat with a 27-hole golf course and condominiums. The hope is to attract wealthy visitors from China.

But another storm has been brewing: Mr. Liu is embroiled in a political scandal on the island, the latest chapter in the long tail of controversy that has followed the development.

This past spring, a third-party investigation found that former environment minister Gilles Arsenault failed to follow provincial policy when he verbally agreed to amend Mr. Liu’s permit to alter wetlands for the construction of his golf course. It also examined a $100,000 donation the developer made soon after to a community group run by Mr. Arsenault’s former campaign manager.

The two men dispute each other’s accounts: Mr. Arsenault is adamant that his wetlands decision was not contingent on a donation, while golf course designer Graham Cooke, who met with the minister on Mr. Liu’s behalf, told the report author that the property owner understood the approval would be granted in exchange for the donation.

After receiving the report in late March, Premier Rob Lantz fired Mr. Arsenault from cabinet and suspended him from caucus pending investigations by the RCMP and the conflict of interest commissioner.

Months later, the resort itself is still in limbo.

The residents of the friendly tourist city of Summerside have been asking questions for years about whether developers such as Mr. Liu have a moral obligation to see through promises they’ve made to the community. While some dismiss the issue as a property owner simply playing in his own sandbox, others are aghast.

The sprawling bones of the resort – surrounded by piles of gravel, shipping containers and mounds of red dirt – have become “a bit of an eyesore” on the otherwise picturesque waterfront, Summerside Mayor Dan Kutcher said in an interview.

The perennial delays have fueled frustration and a sense of wariness in the city. Mr. Kutcher cited a recent article in Summerside’s prominent weekly newspaper, The Journal Pioneer, which chronicled a timeline of Mr. Liu’s failed promises and evolving plans for the resort.

“I think we’ve become numb by it. I think it is a potential key piece of our waterfront that at this point looks ugly,” he said, adding that he finds the situation puzzling as a former business owner and commercial lawyer. “I’ve never seen anything like that anywhere, where you’re investing in a project but it is continuously incomplete.”

Another sore point for locals is the dearth of golf in Summerside. A decade ago, Mr. Liu purchased the city’s only golf course, but he closed it for renovations in 2019 after operating for only one season. It’s currently incorporated into his plans for the PEI Ocean View Resort & Golf.

Mr. Liu insists he plans to open the resort eventually, though he can’t say exactly when, said Nicolle Morrison, a local real estate agent who sold him the property and acts as his spokesperson in the community. “It’s gonna open, it’s gonna open,” she said.

Mr. Liu, who is in his 70s, has previously lived in PEI and owns several chemical plants in China. His Canadian company, SZL Group, describes itself as “a leader in owning and developing luxury golf resorts, prime land, and comprehensive travel services,” with golf courses in Barrie, Ottawa, Edmonton and Moncton, and other golf developments across the country.

Two years ago, construction on the resort, which had been ongoing for five years, halted abruptly. Mr. Liu had changed his mind about the resort design, Ms. Morrison said. He wanted to add two swimming pools, she said, and change the location of the washrooms for the rotunda, which was built in 2014 and is envisioned as a restaurant with panoramic views of the Northumberland Strait.

Golf course construction has been beset by delays, too. Most recently, the province ordered the developer to stop work for a month last winter when the wetland issue arose.

The drama and delays have meant that controversy over the resort and the golf course is essentially constant in the small coastal city, Ms. Morrison said. In June, she met with Mr. Liu and his interpreter in Toronto to understand exactly what’s going on.

“If I didn’t get the answers I wanted, I was going to walk – because my reputation is on the line, right? Everybody’s talking and I hate all that talk,” she said, adding that the course designer Mr. Cooke was complaining that Mr. Liu hadn’t yet allowed him to hire people and start construction. “I thought, enough is enough. I flew up. I met with them, we had a great meeting.”

Workers are now focused on laying sod and digging ponds for the new golf course, which Ms. Morrison said is on schedule to open in the fall of 2027. Condo designs for the site are also underway, she added. With work underway on the golf course and designing condos, why is nothing happening on the resort itself? “I asked the same question,” she added, shrugging her shoulders.

In February, a member of the public noticed that construction was happening in an area not covered by the developer’s existing permit and tipped off the province, according to the third-party investigation ordered by the premier and conducted by the law firm Stewart McKelvey.

The law firm’s 10-page report, dated March 24, was delivered to the province’s deputy minister of land and environment, Norbert Carpenter.

It detailed how in 2024, Mr. Liu was provided a permit for use of 27.1 acres of approved wetland to build his golf course and paid the province $406,500 in compensation, as required under provincial legislation.

(That amount has also been controversial. The rate for wetland compensation increased in early 2024, three months before Mr. Liu’s permit was issued. But the province allowed him to pay a lower figure under the old rate.)

In October, 2025, according to the report, then-minister Mr. Arsenault met with the developer’s representatives, golf course designers Mr. Cooke and Cory Black, at a hotel in Summerside to discuss altering the wetland permit.

He gave the men verbal approval to begin work on additional wetland outside the approved area, which did not follow the province’s wetland conservation policy. Normally, the developer would have had to make a second application and follow a three-step wetland mitigation process that includes conservation steps before compensation.

Several months later, on Jan. 28, the developer made a $100,000 donation to an unincorporated community group called Comité Diversité et Equité – translated from French as the diversity and equity committee – which had previously supported local schools.

Elise Milligan, a volunteer with the group who had served as Mr. Arsenault’s campaign manager in the 2023 provincial election, was interviewed by the third-party investigator and said they planned to use the money from Mr. Liu to develop a local watershed project for youth.

Mr. Arsenault has said that he never implied the altered permit was contingent on the donation, or vice versa. He said the donation was the developer’s idea - Mr. Liu wanted to do something related to education and the environment - and Mr. Arsenault provided him with options of groups he could donate to. He said he suggested Comité because he felt they did great work in the community.

“I did all this with the best of intentions,” he wrote in a Facebook post a few days after his firing.

“... However I realize now that the optics of the situation matter. If the developer thought the donation was contingent on the permit, that was never the intention. Clearly there was a miscommunication and that’s very unfortunate.”

Ms. Morrison, Mr. Liu’s spokesperson, agreed that the wetland issue was a miscommunication. She said it’s been blown out of proportion and listed other contributions Mr. Liu has made to the community, including spending $500,000 for outdoor trail lighting along part of the public waterfront trail in front of the resort and armour rock along the coastline. “He pays a lot of taxes and he doesn’t get any appreciation,” she added.

But it was clear that for PEI’s political class, the transaction did not meet the smell test.

In his report, lawyer Murray Murphy wrote: “Regardless of whose version is more accurate, the timing of the donation suggests that it was linked to the approval.”

The report recommended that the developer file a new application and the community group return the $100,000 donation. The money has since been returned.

Mr. Lantz, the Premier, noted in a March 28 statement that the report did not draw a final conclusion on the transaction between Mr. Arsenault and Mr. Liu.

He told a news conference that day that it was “relatively clear” that Mr. Arsenault did not personally benefit from the transaction, but it was “exceptionally clear that he demonstrated poor judgment.”

“Elected leaders need not only be free of conflict of interest,” Mr. Lantz said in his statement. “They must also be free of the perception of conflict of interest.” Mr. Lantz’s office said he wasn’t available for an interview.

He instructed the island’s conflict of interest commissioner to investigate and suspended Mr. Arsenault from caucus pending the outcome of the probe.

The deputy minister, meanwhile, referred the matter to RCMP.

Commissioner Judy Burke, whose role is to investigate potential financial conflicts among members of the legislative assembly and cabinet, said her own probe into a potential breach by Mr. Arsenault is superseded by the police investigation. “Following the police investigation, if Mr. Arsenault remains in office, my own investigation will resume,” she wrote in an e-mail to The Globe and Mail.

RCMP spokesperson Ellen Peters said in an e-mail that the investigation into Mr. Arsenault and the $100,000 donation is ongoing. “We will provide updates when appropriate.”

As the investigations continue, the City of Summerside has invited expressions of interest for investors to develop a public golf course – a new one altogether.

It’s clear, Ms. Morrison said, that they aren’t counting on Mr. Liu to follow through on his plans to bring golf back to the community. “The city doesn’t believe in him anymore.”

Mayor Kutcher said there is huge community demand and economic potential for golf in the area, and already, seven proponents have submitted proposals.

“If there’s two golf courses, that’s even better,” Mr. Kutcher said. “That’d be great. Then Summerside all of a sudden becomes a great golf destination, but I’m not hanging my hat on any projects associated with the Ocean View Resort.”

With a report from The Canadian Press