The key to the BC Rail sale lies in Premier Gordon Campbells beginnings in real estate and land development.
One must never forget that first and foremost, Gordon Campbell is a real estate man – his past and beginnings were as a developer, and at no time when dealing with him and his administration should that be forgotten.
Not when it comes to forest land deals the province had been criticized for ( Weyerhaeuser /Brookfield Asset Management deals) , nor when it comes to highway construction and road work deals( South Fraser Perimeter Road and Sea to Sky) . But especially not if one begins mulling about the ramifications of the $1.00 transfer of land clause written into the dubious privatization of BC Rail, which is about to occur on or before July 15th 2009.
While reading the June 27th, 2009 post on The Legislature Raids titled ” BC Rail: Union of B.C. Indian Chiefs says Province Wilfully Mislead or Withheld Information About B.C. Rail ” , something sparked a memory of an article that talked about the Sea to Sky highway construction. And how the value of lands along that corridor skyrocketed with the news of the highway construction and the 2010 Olympic bid. And more importantly, how those lucrative properties were obtained.
It was within this chillingly revealing article by Donald Gutstein titled “Developers are the Olympic Games’ real Winners.” (Georgia Straight, May 31, 2007) that one finds the connection to the BC Rail sale, and in my eyes, the key reasoning behind that ludicrous $1.00 land transfer clause.
” Some developers benefited handsomely from taxpayer investment in the $2-billion Canada Line and the $800-million Vancouver Convention and Exhibition Centre expansion. But the main vehicle for creating developer wealth is the $2-billion (including future debt-servicing costs) investment for traffic improvements between Vancouver and Whistler. True, some of this money would be spent on the Sea-to-Sky Highway even if there were no Olympics. But this work was fast-tracked, meaning that projects in other B.C. regions were shelved.”
“During 2002, as Poole and the bid corporation prepared their final proposal, the provincial government was studying various options for improving the link between Vancouver and Squamish. As well as looking at major upgrades to the existing highway, the provincial Ministry of Transportation and Highways reviewed possible routes through the Capilano, Seymour, and Indian river valleys. These alternatives would cost more–from 50 percent to 100 percent more–but the result would be a safer, faster ride.
But these alternative routes went largely over Crown land. How could they help future real-estate sales?
The ministry evaluated all aspects of the routes. One factor leapt off the page: “developable land accessed”. Upgrading 99 Northwas ranked five out of five for this factor, with five being the best, or the most. The other options received a score of one out of five.
One area with great “developable land” potential was Britannia Beach, but its ownership was in limbo. West Vancouver investors purchased the Britannia Mine site and 4,000 surrounding hectares in 1989. They struggled from one failed attempt to another to find a way to clean up the site and turn a profit.
Then along came the Olympics, and Britannia Beach’s fortunes changed overnight. Vancouver developer Rob Macdonald came out the big winner. He’s a strong Gordon Campbell supporter, having donated nearly $100,000 to the Liberals since they won the 2001 election. Macdonaldpurchased the offshore company that held a mortgage on the property and pushed for a speedy resolution of the ownership situation. A month after Vancouver was awarded the Games and the Campbell government chose the Sea-to-Sky Highway route, the B.C. Supreme Court turned the property over to Macdonald for an undisclosed amount.
If the Vancouver-Squamish connection had gone inland, Macdonald’s newly acquired property would be worthless. Instead, the highway would go right by his front door.
Macdonald donated more than 90 percent of the land to the province. This was steep slopes that were useless for development and contained “some of the most contaminated land in North America”, according to then–Sierra Legal Defence researcher Mitch Anderson. Let the taxpayers assume responsibility for the cleanup. Macdonald also agreed to contribute a levy of $1.75 million toward remedial work.
Macdonald kept 202 hectares of high-value land for residential and commercial development. He would get further assistance from taxpayers in the form of $27 million for a plant to treat polluted water from the mine, another $99 million for the province to clean up contamination of the lands it got from Macdonald, and millions more from Natural Resources Canada for a visitor centre and mining museum, boosting the value of Macdonald’s commercial property.
~ now pay attention – here is where BC Rail starts to come in ~
The Squamish First Nation was another big winner in the Jack Poole sweepstakes. In a complicated land swap in 2000, the First Nation ended up with an option to buy land from BC Rail at Porteau Cove in order to create a new reserve and build houses for band members. This had nothing to do with Olympics or highway improvements.
Porteau Cove is one of the very few developable sites between Vancouver and Squamish, a 500-hectare strip on the shores of Howe Sound running south from Porteau Cove Provincial Park to Deek’s Creek.
Developers eyed this land for decades, but it was owned by BC Rail and not for sale. Then along came the Olympics with their highway upgrade, and the land skyrocketed in value. It was now too valuable for band housing. In 2004, the band exercised its option to purchase the land for a reported $12 million. It then signed a deal with Concord Pacific Developments to develop 1,400 homes. Interestingly, two former chairs of Concord Pacific were among the developers on the board of the 2010 bid corporation, along with Poole.
The lots are marketed as being just 25 minutes from downtown Vancouver via the new Sea-to-Sky Highway. If the venture earns just $50,000 for each lot, after putting in roads, sewers, water lines, and public amenities, that’s still a profit of about $58 million to be split between the band and the developer. For its part, the band says it plans to invest the profits in housing and job creation for band members–elsewhere, of course. In Concord Pacific’s case, some of the profits will likely flow back to its Hong Kong owners. ”
Isn’t that just something to get the old brain cells working?
Even going back to the date of the deals talked about above, Charlie Smith of the Georgia Straight voiced the very same concerns in this article of March 2004, titled ” B.C. Rail Deal frees Real Estate ” :
“Consider the facts so far. Prior to the election, the premier told voters that he would not sell the Crown-owned railway. What led him to change his mind?….”
“CN has contributed $150,000 to the B.C. Liberal party during Campbell’s tenure as leader.” ( recall this article is from 2004)
“CN chair David McLean, a Vancouver developer, has been a political supporter of the premier since Campbell was mayor of Vancouver in the 1980s and early 1990s.
McLean was previously chair of Concord Pacific, which also supported Campbell when he was mayor of Vancouver. Concord Pacific developed the north side of False Creek.
McLean also chaired the influential Vancouver Board of Trade in 1993 and supported Campbell’s efforts to replace Gordon Wilson as leader of the B.C. Liberal party.
On November 25, the B.C. Liberal government announced in a news release that it had reached an agreement-in-principle with the District of Squamish to transfer 29 hectares of BC Rail land to the district.
According to the news release, prospective plans for the BC Rail site include developing a full-service marina, a passenger ferry terminal, and cruise berths.
The government also announced that CN will “facilitate” upgrading of the Sea-to-Sky Highway and ensure rail alternatives for the 2010 Winter Olympics. McLean was a director of the Vancouver 2010 Bid Corporation, which put together a successful bid to the International Olympic Committee.
The major provincial media continue focusing on the activities of political aides at the centre of the story. There has been little coverage of BC Rail’s waterfront property in Squamish.
As the District of Squamish proceeds, there will be no shortage of developers wanting to exploit the potential. B.C.’s biggest players, such as Concert Properties and Concord Pacific, may find such an opportunity irresistible on the eve of the 2010 Olympics.
Executives with both companies were huge supporters of the Olympic bid. Concert Properties chairman Jack Poole is now chair of the organizing committee that is staging the 2010 Winter Games.
The IOC’s endorsement last year set the stage for a real-estate boom along the Sea to Sky corridor. “
This is why I have to laugh when reading that, according to the premier, the reason behind the clause was to protect taxpayers….
” Government has refused to reveal details of the contract until the bureau has completed its review. But a copy leaked on the weekend showed that the government has the power to force CN to buy for $1 any B.C. Rail line land it chooses to abandon. CN is prohibited from abandoning any routes during the first five years of the deal, however. Premier Gordon Campbell said this clause was put in place solely to protect taxpayers and prevent CN from potentially offloading expensive environmental cleanup costs onto the government. CN would be compelled to buy such land and perform the cleanup itself if this was the case, the government said. Campbell said that the agreement with CN makes the company responsible for maintaining all the tracks, railbeds and land on which the railway operates and that the $1 land-sale option simply provides extra protection for taxpayers.
– Times Colonist (Victoria), Page A04, 21-Apr-2004 B.C. Rail deal has just one more trestle to cross By Jeff Rud“