City of Powell River has received funds from Catalyst Paper Corporation in lieu of payments it is supposed to receive once provisions in an agreement in principle (AIP) are completed.
Catalyst gave the city a $42,827 cheque in September, representing the rent received under the JRK Holdings Ltd. lease from June 1, 2012 to June 2013.
JRK, now wholly owned by City Transfer Inc., leases property from Catalyst. The property is next to another parcel that is the site of the barge terminal.
The city-owned barge terminal was relocated from Westview to Townsite on land leased from Catalyst at the end of 2010 and early 2011, due to the south harbour expansion project. The city hired City Transfer, the company that operates the facility for the city, to construct the new terminal.
The AIP between the city and Catalyst includes a provision for Catalyst to subdivide the JRK parcel and the barge terminal parcel from the remainder of its property. Once the subdivision is completed, Catalyst will lease the barge terminal lands to the city for $1. As well, Catalyst will give the city a 30-year licence of occupation and a three-year lease for the JRK lands.
Following the transfer of the JRK lands to the city, the city will transfer the JRK lands to City Transfer. In exchange, City Transfer will transfer ownership of the barge ramp to the city and pay the city $5,000 a month for exclusive occupation and use of the barge terminal facility lands.
However, none of this has happened yet because the subdivision hasn’t gone through. “Despite the efforts of all parties, the subdivision is taking longer than expected,” wrote Brian Baarda, Catalyst vice-president of finance and chief financial officer, in a letter to Mac Fraser, the city’s chief administrative officer, dated September 25.
City council discussed Baarda’s letter at a recent committee-of-the-whole meeting. Councillor Russell Brewer had some questions about Baarda’s letter and the payment, which led Mayor Dave Formosa to explain that it was a “good faith cheque.”
The city was to receive $5,000 a month, plus taxes, but the subdivision hasn’t happened, Formosa said. “Based on good faith and the fact that we’re supposed to be getting some revenue, I started whining, where’s our money?” he said. “I understand the paperwork isn’t done, but we’ve done everything. What about us?”
Based on that, Formosa said, Catalyst agreed.
Under the terms of the JRK lease, City Transfer pays $4,000 a month to Catalyst. However, Baarda told the Peak there was an adjustment to the original contract amount for the hog pile area that the company realized it needed after signing the original contract.
