Officials are readying the municipality’s piggybank to cover the Squamish Oceanfront Development Corp.’s first principal loan repayment.
The wholly owned municipal corporation won’t reach a development agreement with Matthews Southwest Developments and Bethel Lands Corp. by May 4 — the deadline for the first loan principal payment. On Tuesday (April 15), District of Squamish council backed a recommendation to pull $3 million out of the district’s land sale capital reserve fund. The money will be transferred to an economic development capital reserve fund from which it can be handed to the Bank of Nova Scotia, which issued the loan.
“[The recommendation] is to take the steps that are necessary to honour the obligation that the district has made to the bank in guaranteeing $8 million of SODC’s debt,” said Joanne Greenlees, the district’s general manager of financial services.
The $3 million must be repaid to the land sale reserve fund within five years, she noted. The money will be returned with the interest it would have earned in the land sale reserve fund.
Coun. Ted Prior was the only councillor to vote against the recommendation. He told The Chief it was a protest vote because he was shoved out of SODC meetings. After being on the SODC board for six years, Prior said he was asked by Coun. Doug Race to remove himself from the oceanfront discussions because he owns land adjacent to the proposed project.
“[Race] said it was a conflict of interest, but my lawyer said I didn’t own enough land to make it a conflict,” Prior said. “I feel I’ve been bullied out.”
The Squamish oceanfront is a sensitive issue for many residents, Coun. Ron Sander said. The money slated for the loan payment comes from the sale of property in the Squamish Business Park, Sander noted. In 2012, Solterra Acquisition Corp. purchased 20 acres of district-owned land on the corner of Queens and Commercial ways for $8 million.
“In effect, we are loaning some of that to ourselves and paying it back with interest,” Sander said.
The $3 million payment is not a budget feature, so it will not affect property taxes or operating budgets, Mayor Rob Kirkham told The Chief.
“It has no impacts whatsoever,” he said, noting the move is simply an interim step.
These types of commercial deals take time, Race said. He anticipates an announcement regarding an oceanfront development agreement in one or two months.
In June 2012, the district provided a $8 million loan guarantee and authorized a $3 million mortgage on the oceanfront to secure financing for the SODC. Re-financing was provided to enable the SODC to bring the project to the market for sale or development.
The May 4 deadline is for the first of three principal payments. The second is on the same date next year for an equal amount and the final payment on the same date in 2016 capped at $5 million.
By the end of 2012, the overall SODC debt sat at $9 million, district spokesperson Christina Moore said, noting the total would have increased since then. The exact figure on the current total wasn’t available at press time.
Prior said he’s asked for the SODC financial details multiple times, without success. A lot of money has been spent and Prior said he wants to know where it’s all gone.
“There are questions on where the money went,” he said.
