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Liability issues a challenge to land purchase

The city’s intended purchase of 10.8 hectares of land and water at the Wellcox Railyard from Canadian Pacific will result in several challenges, say city officials, the most notable of which is assuming liability over the aging trestle that serves as the current access point.

Last week, the city announced it entered into a purchase agreement with CP to buy the property at 7 Port Drive for $3.4 million with the intention of building a transit hub that could one day connect buses, rail and even a passenger ferry to downtown Vancouver.

But along with potential trestle repairs and environmental concerns – the site is built on coal slag – the majority of the property is encumbered with perpetual rights of way which will limit development potential of the property.

Nanaimo Mayor John Ruttan said he admits that the city has a tiger by the tail by entering the purchase agreement, but thinks the payoff will benefit taxpayers long-term.

“For a number of years we’ve been trying to make a transportation hub... and it’s something we see as a great opportunity,” he said.

The Regional District of Nanaimo partnered with the city on the purchase, agreeing to pay $2 million for a portion of the land that will house the transit hub. The city has not yet created a plan to develop the remaining part of the property.

“The motivation on our part isn’t land development but to try to relocate the bus transfer system,” said Ruttan.

Snuneymuxw Chief Douglas White III said his council looked into the property several years ago and considered the property more trouble than it is worth.

“The environmental liability is one thing, and it in itself is a serious concern,” said White. “But I can say that property is easily the most complicated piece of land I’ve ever come across with the encumbrances, right of ways, leases and other issues. Our assessment is that it would be excessively expensive and costly.”

He added that he expects city officials to include Snuneymuxw in future planning discussions.

While still in early planning stages, condition of the trestle that connects the property to Esplanade remains a concern and is likely to come with a hefty price tag to repair if required.

Ted Swabey, the city’s manager of community safety and development, said it is possible to avoid that cost and liability.

“There is certainly going to be significant costs depending on how we upgrade it or if we upgrade it,” he said. “But it may not end up being the primary access to the site. In the long term we expect to have Front Street go through the property and become the major access.”

CP, which put the entire 21.6 hectares of the rail yard up for sale in January 2011, is currently retaining ownership of the southern portion of the land. Ruttan said the company was unwilling to subdivide into smaller parcels.

Despite the challenges, the acquisition meets several priorities of the strategic community plan, including working with other stakeholders to improve transportation and mobility in Nanaimo, improving the waterfront and taking responsibility of a key area of the city.

“It’s the last urban frontier of Nanaimo, and it’s extremely important that this last piece of urban frontier gets developed in the best possible way for the citizens,” said Coun. Fred Pattje.

City council will have to review all leases – two companies currently lease part of the site – licences, rights of way, environmental and geotechnical reports and other site assessment before approving the move, with the property transfer scheduled for March 31.

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