Thursday, September 12, 2013

How Much Will The Wellcox Property Cost?

67% of Industrial Waterfront Not Controlled By City

The City of Nanaimo acquired 26.7 acres of land and water located at 7 Port Drive on March 27, 2013 from Canadian Pacific Rail. The majority of the site (21.6 acres) is encumbered with perpetual rights of way which limit the immediate development potential. The purchase price was $3.4 million.

The purchase was subject to the City conducting a period of due diligence which included review of the existing leases and rights of way, an environmental assessment, a geotechnical assessment and a bridge condition assessment. The City was satisfied with the findings of the due diligence.

Rights of Way - Seaspan Coastal Ferries occupy 15.4 acres of land and water under a right of way agreement. Island Corridor Foundation occupies 2.53 acres of land for railway operations.

Environmental - EBA Engineering Consultants was hired to review the existing environmental studies completed for CP Rail. Most of the property is filled foreshore comprised of coal waste deposited across the site. There are environmental impacts associated with coal waste which can be managed on site at the time of redevelopment.

Geotechnical - future development of the property may require the installation of concrete piles to support buildings over the filled foreshore.

Trestle Assessment - the existing wooden trestle will need to be replaced or an alternate access to the lands to the east of the railway tracks be identified in the near future.

Seaspan & ICF Pay No Rent For Use Of Property

Neither Seaspan nor ICF pay the City of Nanaimo any rent for the use of nearly 70% of this industrial waterfront property. In fact Seaspan does pay approximately $30,000/yr. in taxes which seems like a pretty sweet deal for the use of over 15 acres of industrial waterfront in the heart of downtown Nanaimo. Try finding a deal like that anyplace else?

Both of these companies hold perpetual rights of way on this property, which means that for $30,000 a year or so, Seaspan can make use of this valuable piece of waterfront property forever. There is talk now that Seaspan is considering consolidating their operations at Duke Point, but you can bet the city (that is you and I) will likely have to pay a pretty penny to Seaspan for that perpetual rights of way they currently hold. I would argue it is as valuable as actually owning the land, without having any capital invested.

This is yet another example, of why some people raise their eyebrows and get shivers down their back when they hear our wheelers and dealers at city hall are once again delving into the realm of private enterprise and property development. Don't they know that in that realm 'there be monsters'?  


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