Seaspan discussing transfer of property rights to Nanaimo

NANAIMO – Deal would open up development possibilities on south waterfront

Seaspan Ferries is in talks with the City of Nanaimo about releasing a key part of the south industrial waterfront as it considers moving operations to Duke Point.

Nanaimo officials and Seaspan Ferries have been in confidential negotiations about the potential transfer of right-of-way claims on the Wellcox railway land.

Bill Corsan, the city’s manager of real estate, said the discussion alone is a huge step forward and if successful, it could open up greater possibilities for redevelopment along the water’s edge.

The City of Nanaimo bought 10.8 hectares of the south industrial waterfront for $3.4 million in March.

Local officials and residents envision a changed waterfront, with parks, shops and a transportation hub. But officials have also known significant challenges stand in the way of immediate development.

Seaspan alone ties up six hectares of  land and water with a statutory right-of-way, preventing the city from making use of the area so long as the company holds the claim. The Island Corridor Foundation holds a hectare.

Corsan said the city planned to hold the land in trust for future development and help create a vision for the area that could be rolled out once “serious encumbrances” like land claims were dealt with.

Negotiations for right-of-ways weren’t expected for another four decades. But Seaspan Ferries recently approached the city about the potential to work toward making the Wellcox property free and clear as it looks to consolidate its downtown terminal with Duke Point.

“It’s huge,” Corsan said. “[When the city purchased the Wellcox Railway land] we were told not to expect Seaspan to be leaving anytime soon, so it’s quite fortuitous we are having this discussion in the first year of ownership.”

Seaspan Ferries has owned the right-of-way to water and land at the south industrial waterfront for close to 20 years and only started to reconsider when it purchased Van Isle Barge Services in Duke Point two years ago.

Seaspan Ferries vice-president Steve Roth said it no longer makes sense for the company to operate two terminals in such close proximity to one another.

Seaspan has made a bid to barge garbage at its Duke Point site for a potential waste-to-energy incinerator, but Roth said the two projects are not “tied at the hip.”

The potential incinerator would fit with its service and help make the case for the significant investment needed to develop the terminal for increased marine traffic, Roth said, adding relocation could still be years away.

“Before that becomes a free and clear piece of property for the City of Nanaimo and right of way limitations are removed, we have to figure out how we are going to run our business,” he said.

The city will also have to negotiate with the Island Corridor Foundation over land rights.

While the company is willing to work with other stakeholders on the vision for the Wellcox site, it hasn’t stepped forward to bargain with its right-of-way – one of the few connections to Island rail.

Corsan said he’s hopeful the city can take the first step toward taking control of the south industrial park by working with Seaspan. If the land is released, it could allow the vision for the waterfront to move forward and the city could have greater authority over development along the water. There will also be more options on where to put the Regional District of Nanaimo’s new transportation hub, which has been planned for the area.

The city would have to offer compensation for the land rights.