Kelowna’s mayor says the provincial government has given a “strong verbal commitment” to pay up to one-third of the cost of Okanagan local governments acquiring the abandoned Kelowna to Coldstream rail line.
Walter Gray said while Victoria has not put the offer in writing, after meeting with provincial officials including Transportation Minister Todd Stone at the recent Union of B.C. Municipalities convention in Whistler, it’s clear the province wants to help with the acquisition.
“We don’t have anything in writing from anybody but we have a very, very strong verbal belief that they want to be our partners (and will) commit to a maximum of one-third of the purchase price,” said Gray.
And according to Kelowna city manager Ron Mattiussi, the local governments have what he called the “essence of a deal” with CN to buy the rail line.
Now all that’s needed is to work out the details. Those details include who pays for environmental cleans up associated with decomissioning the rail line and ownership of associated properties.
Mattiussi has said in the past that the local government is aware of clauses in the original CN agreement to run the rail line that require some properties that the line crosses to be returned to the previous owner once the rail line ceases to exist.
The two revelations about a possible deal in the ongoing saga that is the fate of the abandoned rail line come, in Mattiussi’s words, at the “11th hour.”
The window to make a deal between the local governments and CN closes on Monday.
Kelowna’s director of community planning and real estate Doug Gilchrist, who is leading the negotiations for the local governments, (Kelowna, Lake Country, Coldstream and the Regional District of North Okanagan), confirmed a call to bring in the Canadian Transportation Agency is also being considered.
“That would protect our right to buy,” he said.
If the CTA is asked to intervene, the local governments would likely opt to ask for the non-binding option, which would see the CTA set a price for the rail line right of way and while that price would be binding on CN, it would not be binding on the local governments.
If the price was deemed too high, the local governments could walk away and let CN sell the land to another buyer.
The local governments would have to pay for the CTA to come up with a price if the non-binding option is chosen.
The binding option would tie both the local government and CN to the CTA’s final price but that option is not considered likely because of the lack of flexibility for the local governments.
Gilchrist said an announcement will be made today about whether a deal has been negotiated or if the CTA would be called in.
CN is asking $50 million for the rail corridor between Kelowna and Coldstream and the city says in addition to money the local governments would put in, it has a number of potential funding partners including the province.
Gray said while it is unlikely the federal government could provide funding because it would be for land acquisition and Ottawa does not fund that, it could help in other ways with grants to develop the desired recreational trail.
But while the mayor said the local governments have a price in mind that they would be willing to pay and have shared that with the province, the figure will not be made public until a deal is done.
It’s also unlikely public approval to spend the money will be sought unless it involves long-term borrowing.
The local government participants want to acquire the rail line to create a recreational corridor through the Central and North Okanagan.