City of Powell River Council has voted to include $1.4 million in its five-year financial plan for the purchase of all Powell River Waterfront Development Corporation (PRWDC) lands.
Council also voted at its meeting on Thursday, May 2, that funding be sourced through a short-term loan from the Municipal Finance Authority to pay for the lands. Borrowing of five years or less by the city does not have to go to elector approval, such as referendum.
Mayor Dave Formosa said he thinks the plan to purchase the lands is great for the city.
“Council and staff will now be in direct control of these properties,” said Formosa.
Council was originally kept at bay from direct involvement in the lands because of legal opinions that the city should not be on the PRWDC board. This was due to a court case that showed harm could come to communities with this type of representation, according to the mayor.
“We never did have the opportunity to be there as your elected representatives; not that we didn’t have faith in our [PRWDC] directors,” said Formosa.
According to a staff report to city council, PRWDC gained ownership of lands through the process of dissolving PRSC Limited Partnership, which was originally a joint venture of the city, Tla’amin Nation and Catalyst Paper Corporation. The city decided to use PRWDC as its stakeholder in the venture.
When it was originally structured, the limited partnership took ownership of approximately 800 acres of properties that were considered surplus to Catalyst’s operations in return for a $4.5 million secured mortgage. Goals for PRSC were to attract investment in the portfolio of lands for the purposes of diversifying the local economy and creating new jobs and revenues, according to the staff report.
While under creditor protection in 2012, Catalyst made an agreement with PRWDC, Tla’amin and Tees’kwat Land Holdings Ltd to sell its shares in the limited partnership and retire the mortgage for $3 million. The cost was jointly paid by PRWDC and the Tla’amin representatives with the city writing a loan guarantee for PRWDC’s share.
According to the staff report, in September 2017, the PRSC directors representing Tla’amin proposed that the shareholders discuss taking ownership of the remaining properties and dissolving the limited partnership. The remaining properties were appraised and divided and PRSC was dissolved in December 2018.
Also, in December 2018, PRWDC entered into a sales contract with Sino Bright Investments Ltd to sell 10 acres of property it was overseeing, for development of a school and accommodations on lands adjacent to Brooks Secondary School. The purchase agreement, however, was extinguished in March 2019.
In the staff report, it stated that with the Sino Bright agreement being extinguished, staff believe it is time for the city to purchase the PRWDC properties in order to address two matters. One was based on public feedback regarding the proposed sale to Sino Bright; it is believed that it may be better that the city own the properties in order to provide more direction over future development. The other was that the city needs to address the issue of the city’s loan guarantee prior to its expiration on August 31, 2019.
Estimated cost to service the $1.4 million purchase of the PRWDC lands is slightly less than $300,000 per year to pay it off in five years.
