Company wary of land-sale spotlight
May 02 2012
Point Hope Shipyard, along the Upper Harbour, is owned by The Ralmax Group.Photograph by: Arnold Lim , timescolonist.com (May 2012)
Ralmax president and CEO Ian Maxwell hopes his company's interest in buying four city-owned waterfront industrial lots doesn't become the focal point in a broader community debate over city land-sale policy.
"The debate about the disposal of city assets should go on. I'm all in favour of public process and I have no problem at all with that," Maxwell said in an interview.
"But I just think some people might think this is a Ralmax issue. It's not. The city can tell us no, they don't want to sell us the property."
Councillors Shellie Gudgeon and Ben Isitt are sponsoring a public forum on issues surrounding the sale of city-owned land on May 9.
The two say the decision to hold the forum - which they have organized and is not city-sponsored - came after recent in-camera council discussions relating to the Harbour Road properties and property in the vicinity of the Northern Junk building.
"These are big decisions requiring public engagement and well-thought-out strategies," Gudgeon said. "They're strategic waterfront pieces of land."
Gudgeon said she hopes the community discussion focuses on the broader policy issues, but she cannot control what members of the public say.
"I am dismayed, though, that it is going to become all about Point Hope," she said. "I'm going to try hard to make it not about Point Hope."
The Ralmax Group, which owns and operates Point Hope Shipyard, has long-term leases with the city on three Harbour Road properties and has been in protracted negotiations with the city for almost nine years to lease a fourth parcel immediately north of the Johnson Street bridge so it can expand shipyard operations.
The four properties at 203, 211, 327 and 345 Harbour Road are valued at roughly $17 million.
A year ago, Ralmax entered into an option agreement to lease the fourth parcel and has since put $1 million toward engineering and other studies in preparation for expansion, Maxwell said.
The idea of purchasing the properties arose during lease negotiations, Maxwell said. The idea is as much about risk aversion as it is title to the property.
The city, as landlord, has to be cautious that it is not exposed to a financial risk such as what might occur when a property that has been used industrially for a more than a century is redeveloped.
"A large part of the reason it's taken so long to get where we are is [that] the city, on behalf of the public, can't accept those levels of risk. So working around them has become very difficult," Maxwell said. "The risks to the city go away if we purchase the land. The risk becomes ours."
Ralmax's expansion plans have been further complicated by the Johnson Street Bridge replacement project.
At the 11th hour, the city informed the company it needed a sizable chunk of the optioned lot to stage construction of the bridge and suggested six property line changes. The company has agreed to three.
"It came out of left field," Maxwell said.
"We didn't have any indication until very late in the game."
The city maintains the option agreement always provided for it reserving some part of the lot for the bridge and it has simply exercised that right.
Ralmax is now looking at reconfiguring its plans. Regardless of the outcome, the bridge project means its plans are partially on hold, Maxwell said.
Ralmax has invested about $17 million in upgrades on its leased lands, including the construction of a marine turntable, new sheet-pile docks and a wastewater treatment system.
No terms of any purchase offer have been received by the city. The councillors simply have said they are open to considering a fair market-value offer.