By Brad Herron
The Eagle
Another hurdle has been crossed in the pursuit of developing the former-Domtar site in Cochrane.
Town council granted Springwood Developments Inc. subdivision approval on the 44-acre site. In return, the town will receive $79,042 and an option to lease, and potentially buy, a one acre parcel on the northwest corner of the site in the middle of town.
During his first term on council during the 1990s, Coun. Ross Watson had to deal with the creosote-contaminated site. Nearly a decade later, the issue is back and Watson said the town has “had this piece of property for far too long.”
With Springwood interested in the property, the bulk of council wasn’t willing to let an opportunity slip by.
The measure passed 6-1, with Mayor Truper McBride in opposition.
The site was divided in two. Lot 8, which encompasses 36.1 acres, including the southeast corner, has been deemed suitable for remediation.
A 8.81-acre strip, which bends eastwards in a crescent shape from the west corner of the site to businesses on Charlesworth Avenue, and contains a plume of contaminated groundwater, has been deemed a Special Management Area (SMA) and will not be developed or remediated. It will likely be paved over and integrated into the site.
This area will continue to be owned by Cochrane Properties Ltd. and leased to Springwood at a nominal rent. Springwood will then monitor the contamination and take on the water treatment responsibilities in the future.
A document in council’s package showed Springwood has an option to purchase part of the property and lease the SMA through a purchase, sale and lease agreement at a price of $600,000. Springwood will incur environmental liability insurance at a cost of about $750,000 to $1 million on the SMA, which will underwrite Domtar’s indemnity against future damages arising from the contamination.
In addition, the town is owed $483,853 in property tax that will be paid as a condition of subdivision.
Remediation is expected to be completed within two years, according to Bill Butler, president of Springwood. Contaminated soil on the site is proposed to be remediated by either onsite consolidation and partial bio-remediation, which will cost between $6 million and $6.5 million, or by digging the soil and transporting it offsite, which will cost $12 million to $15 million.
A remedial action plan has not been approved by Alberta Environment.
Under the Municipal Government Act, municipalities are entitled to up to 10 per cent of subdivided land. Accounting for previously deferred reserve lands of 2.3 acres, the town could have taken up to 6.71 acres of reserve land.
This option was quickly dismissed by both Butler and town administration. Butler said if another owner existed on the site, they would be unable to acquire insurance.
Jamie Dugdale, a planner with the town, advised council that owning contaminated property would be an unwise option, as the municipality would be undertaking a huge liability.
With administration recommending taking cash-in-lieu, council relied on an assessment from Altus Group Ltd. which valued the site at $520,000 or about $11,800 per acre. In total, this resulted in the offer of $79,042 to council.
To sweeten the offer, Springwood offered a discounted lease on one acre near the Nan Boothby Memorial Library.
This parcel, after council amended the deal, will be available once the land is remediated. The town will have an option for a 50-year period, with five additional 10-year renewals. As per the agreement, Springwood will lease the land to the town at half of its market value, and the town will have the option to purchase the area at half of market value at any period of the lease. Access will the provided once the land is remediated, which will happen at once, and will not be a staged event.
Roads and public utilities contained within the site will be built and maintained by Springwood and offered to the town through a public easement, to avoid liability for the town. It is currently planned that Centre Avenue will be extended across the railway tracks and onto the site, acting as the main entrance.
With the land currently zoned as a shopping centre district, Springwood may construct a commercial complex to a maximum of 18,500 square feet.
A decision to amend the Downtown Area Redevelopment Plan, the Land Use Bylaw, and Griffin Road Area Redevelopment Plan to allow for this construction was made March 12, 2007.
Discussion of whether to accept Springwood’s offer lasted nearly an hour, as council weighed the potential income from the site, which includes taxes, off-site levies and cash-in-lieu.
One concern was that if council rejected the application, or deferred a decision, Springwood could have taken the application to the un-elected Subdivision and Development Appeal Board, which can issue a binding decision.
Coun. Miles Chester supported the application from the onset, describing it as imperfect, but an opportunity to remove a unsightly blight from downtown Cochrane.
Mayor McBride didn’t agree, and called for council to postpone a decision and schedule a future meeting. After remediation some parcels could be worth as much as $1 million per acre, and with that much at stake, he said the town shouldn’t accept the offer.
“The town needs to be compensated for this major piece of downtown,” the mayor said.
Admitting that the monetary offer was a drop in the bucket, Coun. Ivan Davies said it was time to do something.
“I would like to see more (compensation) and on the other hand I understand what Springwood Development is doing and I fully support them moving forward with the development,” Davies said.
In an interview April 29, Mayor McBride said council missed a great opportunity. While he supports the ultimate decision, he believes the town deserved the value of mediated land.
“As time goes on, costs of remediation continue to fall, land value continues to go up and certainly the economics continue to change with that. So, us being told that it is this or nothing and it will sit empty for 25 years, I simply don’t buy that and I think that was some fear mongering,” McBride said.
Nathan Boskers, project manager with Springwood, said the company is continuing discussions with Alberta Environment and the Calgary Health Region on a remedial action plan.
Boskers didn’t offer any details about a potential clean-up, saying only that Springwood has “some idea” how it will happen. He is optimistic work will begin “some time this year.”