Thursday, January 12, 2012

Sandown Racetrack Site

North Saanich council met and considered new information from the staff.   I had commented on the project earlier about my concerns of too much risk being transferred to North Saanich and this risk should remain with the current landowner.

I am now looking at the report tabled at the January 9th the Committee of the Whole meeting.

The report estimates the cost to North Saanich to meet the costs involved with the MOU with the ALC on the land would be $693,000.  In the December report the estimated costs were $455,000 of which the landowner would cover some of the demolition, which in January shows up as a $100,000 contribution.  So from December to January the estimate of the costs to the municipality rose $338,000.

Several things have not yet been addressed yet that need to be before moving forward, most specifically the issue of soil contamination.   At the moment things are moving forward as if there is no hydro-carbon contamination on the site, which given the use of the site seems unlikely to me.  Even a small scale contamination can escalate the costs a lot.

I am also concerned the estimates of the costs are generally being low, a very typical thing that happens at the local government level when everyone assumes the best.    The estimates should be considering the worst case scenario to see how much risk there is.  I think it is more realistic to assume the costs will be between $800,000 and $1,000,000 with a potential of something much higher if there are major issues to be addressed.

Down the road North Saanich will gain in property taxes when the commercial property is developed.   At that time it will take several years of the taxes to cover the costs.   The question is if it is worth North Saanich to pay $800,000 to $1,000,000 now to be recovered through increased taxation in 10 to 15 years time?

Ultimately this is being done to allow the owner to develop part of the land as commercial land.   The re-zoning and removal of the land from the ALR provides a very large capital increase to the landowner, more than enough for the landowner to take the risk on costs of the land.

Given the gain of something on the order of $3.5 to $5.5 million to the current landowner from the change in zoning and getting some of the land out of the ALR, why is the current land owner not willing to shoulder all of the risks and costs?   It is a no brainer unless there is something we do not know.

All that I can think of is that the landowner may be concerned the remediation costs will be much higher, or the landowner is short on money and can not afford to cover the costs involved.
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