NANAIMO GIVES DEVELOPER $9.5 MILLION

CITY OF NANAIMO GIVES
SURO DEVELOPMENT $9.5 MILLION

NOTICE OF INTENTION TO PROVIDE ASSISTANCE

UNDER A PARTNERING AGREEMENT AND

NOTICE OF PROPOSED DISPOSITION OF LAND

Public notice is hereby given pursuant to Sections 24 and 26 of the Community Charter that the City of Nanaimo proposes to provide assistance and transfer certain lands through agreements with Millennium Nanaimo Properties Ltd. and Suro Development Company (“the Developers”) under which the City has engaged the Developers to partner with the City in the development of the Port of Nanaimo Centre.

Under the Agreements, the City would provide assistance to the Developers in the form of:

(a) Transfer of lands legally described as PID 026-459-027, Lot 1, Section 1, Nanaimo District, and of the Bed of the Public Harbour of Nanaimo, Plan VIP79756 (the “hotel lands”) as a developable site to the Developers for $10.00 30 days after the Developers execute a construction agreement to build the hotel, and construction of municipal works and services on public lands to the boundary of the hotel lands. The estimated value of the hotel lands as appraised in November 2007 is $1,500,000.00.

In addition to the participation of the Developers in the Amended Partnering Agreement and construction of a hotel adjacent to the Vancouver Island Conference Centre, the Developers will provide public access to a portion of the hotel lands to be secured by a statutory right of way in favour of the City. It is anticipated that the construction of the hotel will be completed in 2010.

(b) Transfer of lands legally described as PID 026-938-251, Lot 1, Section 1, Nanaimo District, Plan VIP82428 (the “foundry site lands”) to the Developers for $10.00 pursuant to an Agreement for Sale with the transfer to be 30 days following the satisfaction of the conditions precedent to the transfer or later in accordance with the Purchase Agreement (Foundry Lands). The estimated value of the foundry site lands as appraised in November 2007 is $8,000,000.00. In consideration of the transfer, the Developers will pay to the City a purchase price equal to the sum of $9,000,000 (Nine Million Dollars) less the costs of constructing the City’s share of a parking facility to provide 150 public parking spaces adjacent to Maffeo-Sutton Park if such parking is acquired by the City. The purchase price for the foundry site lands will be paid in six installments corresponding to stages of the construction of two residential buildings to be constructed on the foundry site lands with the fi nal installment to be paid at the end of the term of the Agreement for Sale, being completion of the second residential building or no later than 2015-DEC-31. Construction of the residential development on the foundry site lands is to commence by 2010-DEC-31.

(c) An amortization of the payment of approximately 40 percent of the Developers’ capital cost of constructing the parking spaces for use in connection with the development on the hotel lands to be paid by the Developers over the fi rst twenty (20) years of the Developers’ lease with the City. The value of such deferral is approximately $310,000.

A copy of the Amended Partnering Agreement (with amendments) and the proposed Purchase Agreements between the City and the Developers may be obtained during regular offi ce hours from 8:30 am to 4:30 pm Monday to Friday (excluding statutory holidays) at City Hall, 455 Wallace Street, Nanaimo, BC V9R 5J6.

Dated at Nanaimo, BC this 13th day of February, 2008.

Editors comment: Can anyone tell me that kind of risk Suro Development is taking? What kind of risk is the City of Nanaimo aka taxpayers taking in this whole deal?