On September 6, 2018, City of Powell River entered into a 99-year lease with 1170987 B.C. LTD (Gaoshi Holdings, Canada) for $600,000 for 11.5 acres beside the airport for a general aviation industrial park [“City moves on tax break bylaw for airport deal,” September 14]. I believe this agreement does not best serve the interests of its residents.
Gaoshi Holdings has no experience in the aviation business. With no track record, I believe they should have been required to provide a solid business plan to the city prior to approval of the agreement.
The price of $600,000 for a 99-year lease seems too low. This equates to approximately $6,000 rent per year or $500 per month.
I disagree with a foreign company receiving tax breaks. The lease agreement reads the tenant will receive a tax break for the first 10 years. In year one, the tenant will pay no city taxes, in year two, the tenant will pay 1/10 of the city taxes due and so on.
There is little risk for the tenant. If the tenant hasn’t developed the site in four years, the city may cancel the lease and the tenant will have his entire $600,000 returned plus any taxes paid, as well as the fair market value of any improvements to the property.
In the event of early termination, I suggest the following terms should have been negotiated into the lease: the $600,000 be prorated or the tenant pay a penalty for not meeting the conditions of the lease (no full refund as land is unavailable for four years); any taxes received would become the property of the landlord; and any improvements to the property become the property of the landlord.
A clause stating that the tenant is required to use local vendors and contractors would also have been prudent.
Please city council, in future be more vigilant; don’t give away our city.