Consider the purchase of the CN rail corridor strictly from a business perspective. If the District of Lake Country (DLC) invests in this heavily subsidized corridor, it will be the real estate deal of the century.
The purchase of the 17-kilometre corridor within Lake Country, much of it prime lakeshore, for $5.1 million (or under $50,000 per acre) is a real estate steal, made possible by the willingness of CN to accept a tax receipt for its large donation of land and the Clark government’s willingness to subsidize the purchase. The DLC must take advantage of this one-time opportunity.
The Government of Canada did not gift this land to the railway. Rather, CN purchased this corridor in fee-simple from private landowners.
When CN abandoned the rail line in 2013, local governments decided to purchase the land under the mandated abandonment process.
The original asking price was $50 million and after negotiations, a deal was struck for $22 million. CN will donate a large part of the corridor, for which it will receive a tax receipt from the City of Kelowna. The provincial government will subsidize the sale by contributing $7.2 million, taking no ownership position. The Regional District of North Okanagan and Coldstream will purchase their shares from reserves.
The City of Kelowna will pay for its share out of reserves. It has also agreed to help the DLC by purchasing a 50 per cent share of lands falling within Lake Country for approximately $2.5 million. With insufficient reserves, the DLC is required to borrow up to $2.6 million to complete the deal.
Ownership of this corridor opens up so many possibilities. As examples, the DLC could sell surplus rail corridor lands to purchase the City of Kelowna’s share; it could reserve the large surplus lands along the Oyama isthmus for a park; and it could lease land to adjacent owners for recreational, agricultural or commercial purposes. Most importantly, citizens of Lake Country will control their own future.
If the referendum fails and the DLC is unable to purchase the lands within its jurisdiction, the City of Kelowna has indicated that it may buy them. Why not?
It could recover its entire investment from the sale of surplus land, the most marketable being the extensive lands on the Oyama isthmus. It would receive income from leases extending far into the future and it would control development of a crucial part of Lake Country forever.
Those of us who have lived in the region for years will remember that the City of Kelowna gained control of the industrial-zoned lands south of Beaver Lake Road with a stroke of the provincial pen, and despite much subsequent handwringing on the part of Lake Country, Kelowna understandably refuses to turn over the land and associated tax revenues to the DLC.
Make no mistake about the implications of a Kelowna purchase. If Kelowna acquires all of the prime lakeshore real estate in Lake Country it will act strictly in its own interests. For example, if the DLC wanted to purchase land on the Oyama isthmus for a park it would buy it, not at the current heavily subsidized price, but at market value. Kelowna taxpayers would demand nothing less.
If the DLC purchases the corridor, it has indicated that it would, in partnership with a local stewardship group, consult with adjacent landowners in an attempt to mitigate negative impacts. One would not expect that neighbourly, community-building approach from a non-local owner.
Purchasing the rail corridor is not only an astute business decision, it allows the citizens of Lake Country to unite their community around a common vision and to control their own destiny.
I urge you to vote yes in the upcoming referendum.