To say that the BC real estate market is currently hot is an understatement. Properties list for thousands above their current Assessed Value. Multiple bids flood in, thousands of dollars over asking price.
Great time to be a seller. Suddenly find yourself a little short of cash? Good time to sell some real estate. One such seller wanting to convert land into cash to cover out-of-control expenditures is the Town of Qualicum Beach. In late December 2020 we discovered, and reported, the sudden $1.75 million dollar latest cost overrun on the Memorial Avenue /19 A Roundabout project, even before the shovels hit the ground.
Luckily, even facing a cash crunch like this, thanks to the hot real estate market the Town does not have to face the prospect of unloading real estate at fire-sale prices in a soft market, or worry about attracting buyers. Yet, somehow Town Council seems to be unaware that the real estate market is running hot right across BC including here in QB.
We examine three examples in which Qualicum Beach Council appears to be handing over Town-owned land at fire-sale prices to a very cosy group of developers.
“Sale” of East Village Town Parking Lot
The Town has a vision for the East Village, created with extensive public consultation during the development of the Town’s current Official Community Plan in 2017/18. The Town-owned three lots at 126, 130 and 134 Second Avenue East are part of the East Village Plan. However, the rest of the adjacent land on which this East Village “concept” will mature is privately owned and the land owners might have a somewhat different development idea that better suits their objectives. Meanwhile, the Town’s residents were just left to wait and see as the wheeling and dealing went on between the Town and the property owner/developers behind closed doors.
On July 15, 2019, a proposal from the owner of the land east of the parking lot (Berwick side) came before Council, complete with extensive diagrams and pictures by John Larson’s firm (C. A. Design), for first reading. Readers can find the details appended to the Council meeting agenda. Two months later it emerged that the Town apparently had neglected to ask the property owner to the west of the parking lot whether they might have a competing design proposal of their own, but that’s another story unto itself for another issue.
Over a year later, in September 2020, the Town issued a Request for Proposals (RFP) looking for “detailed applications from interested parties to design, develop, own, operate and finance a mixed residential and commercial development on certain strategically located Town-owned lands on [the south side of] Second Avenue East, as part of the East Village redevelopment.” They coyly labeled the RFP as “East Village: Town-owned Parking Lot” as if they were seeking competitive bids for their (our) valuable chunk of prime undeveloped land.
Tenders closed on October 19, 2020. To our knowledge, there was no public opening of these tender(s). None of the proposals are currently included at the Town’s project website https://www.qualicumbeach.com/_eastvillage
In fact, in their RFP, the Town had not even asked for binding offers, opting instead to request, “… details on the financial benefit to the Town – e.g., proposed purchase price, lease terms, etc. Although this only needs to be described in general terms in this proposal, the Town may require that Applicants provide a binding offer within a specified timeline.”
So why the pretense of an open tender for what is simply the next stage of a private behind-closed-doors negotiation with a single already-selected party?
Months went by. Sixteen weeks after the RFP closed, on February 8, 2021, it was announced by the Town that the purchaser is Nanaimo-based Windley Projects Inc. According to the Town’s media release “The decision to sell this land to Windley, at a purchase price of $525,000, comes after a four-month public procurement process to explore the best available value from applicants.” Really? Probably just a coincidence that Windley’s latest project in the area is the Kelland Ventures mall at Alberni Hwy and Despard in Parksville, anchored by Jimmy Pattison’s new Quality Foods store.
This Town-owned parking lot is a half-acre of land which the BC Assessment Authority valued in its current state at $1,071,000 in July 2020, almost a year ago. The Town is getting only half that much from Jeff Windley. No explanation of this glaring discrepancy (gift?) has been provided to the public by the Town.
Under section 24 of the Community Charter legislation, Town Council must give public notice of its intention to provide assistance to a person or organization including “disposing of land or improvements, or any interest or right in or with respect to them, for less than market value”. [emphasis ours] Furthermore, “The notice must be published before the assistance is provided and must identify the intended recipient of the assistance, and describe the nature, term and extent of the proposed assistance”. There is allowance in the legislation for exceptions, but only related to conservation of heritage properties.
In the interests of both transparency and accountability, if some other form of quid pro quo deal has been made between the Town and Windley/Kelland, it ought to be made public so that it can be assessed as to its compliance with the law intended to generally prohibit the provision of assistance to business, as specified in section 25 of the Community Charter.
189 Sunningdale West
On the March 17, 2021 Council meeting Agenda, the public was informed that the Council, in their closed meeting on March 3, 2021, had directed staff “to list 189 Sunningdale Road for sale as a residential development site with a minimum price of $600,000, with all offers due on March 22, 2021 at noon.”
We can find no evidence of a subsequent public tender nor a public opening of bids on March 22, 2021, nor any report to the public about how many bids were received, from whom, at what price – all of which it is reasonable to expect when disposing of publicly owned assets.
It is unclear how and where this sale was advertised to attract maximum interest. On March 30, 2021, the Town announced that “The Town will receive $745,000 for 189 Sunningdale Road, a scenic 962 m2 residential lot, sold to the highest bidder, 1100916 BC Ltd. This lot was rezoned by Council for the purpose of residential development in 2020, and the new owners have the option of subdividing and building two dwellings, or coming forward with a zoning amendment and building a multi-family dwelling.”
FYI, since the Town did not provide its residents the courtesy of identifying the new owners, 1100916 BC Ltd. is a numbered company whose registered directors are John, Jamie and Jeremy Larson and their father Brian. Yes, the same Larson group whose C. A. Design firm are designing the Windley/Kelland portion of the East Village redevelopment discussed earlier in this story.
504 Juniper Drive
At the same March 3, 2021 closed Council meeting, according to the March 17, 2021 regular Council Meeting Agenda, Council had directed “staff to list the land at 504 Juniper Drive for sale by the Town’s current Realtor, Jamie Larson.” Yes, the same Jamie Larson listed above. On March 31, 2021 the Town announced that “504 Juniper Drive was sold for $341,000, to Harbour Mill Holdings Inc. This 590 m2 parcel is zoned Residential 1 (R1), and allows for a single family dwelling.”
Sounds like a bargain, given that the BC Assessment is $336,000, based on an estimated market value in July 2020. Not sure why it didn’t attract dozens of offers well above asking price.
FYI, Harbour Mill Holdings is the registered moniker for Don May Construction with Derek Heinz, Don and Brenda May’s grandson, listed as President of the company.