Watch This Space…

This three-story brick building at 90 Esplanade was built to house the Federal Department of Fisheries and Oceans (DFO) in 1976. The DFO sailed away in 1999 and the building found a new owner, JIJ Holdings, in 2001. It has been tenanted for most of the past 16 years, but in recent years has been vacant.

I think about this building a lot, mostly because I live in the North End and it intrudes on my consciousness every time I look down Yorke Street expecting to see the harbor and instead see a three-story brick building. The last time I paid any real attention to it (other than the day I was walking by on my way to the Joan Harriss Cruise Pavilion and heard an alarm going off inside and alerted a security person who said, “Oh, that happens all the time”) was last year, when I read about it in the minutes of a Port of Sydney Development Corporation (PSDC) board meeting.

The subject came up at the 9 November 2015 meeting (heavily edited minutes from which were posted months later because that’s the way the Port board rolls). Under the heading, “Port Budget Pressures: CEO,” the minutes state:

Several issues were discussed that came out of the CBCL audit. The current office space used by Port staff is in need of repair; however, it is usable at present.

An offer of $800,000 was made by the PSDC for the building directly in front of the Port;

Motion: Moved by Councillor Saccary, seconded by Councillor MacLeod, that upon the completion of an appraisal by the CBRM, the CEO be authorized to continue to negotiate for the building located directly in front of the Port of Sydney.

Motion Carried.

That building, Usher confirmed for me by email Monday, was the old DFO building at 90 Esplanade.

 

JIJ Holdings

JIJ Holdings’ entry in the Registry of Joint Stock Companies looks like this:

 

The firm bought 90 Esplanade from the federal government in 2001 for $450,000. I asked the DFO about the sale and spokesperson Stephen Bornais sent me the relevant documents. He also explained why the “Instrument of Grant” included in the documents makes it look like Queen Elizabeth II sold the property to JIJ Holdings for $1. According to the DFO’s director for Real Property:

It is completely normal practice not to list the value/sale price in an Instrument of Grant, however, contracts require consideration by law to be real contracts so typically the $1.00 is used.

Sydney Fisheries

 

No sale

By 2015, when the Port made its $800,000 offer for the building, 90 Esplanade had an assessed value of $649,400.

Source: ViewPoint Realty https://www.viewpoint.ca/

Source: ViewPoint Realty (2018 numbers are preliminary)

The Port board minutes are silent on the subject for the months following the Port’s offer, but during the 1 March 2017 meeting, Usher suddenly tells the board the Port has decided to “withdraw the $600,000 item for office space” from its budget:

4.1 Office Space: As per discussions at a previous meeting, and considering Marlene Usher’s withdrawal from the capital budget of the associated costs for a new office space, continued discussion did not confirm a plan as to where the office should be located or what the port office space should entail. Based on the options to have the office space in the pavilion, build new or move into a privately owned building, it was decided that a credible business plan be developed to aid in the decision. Such a plan could be paid for through the CBRM Budget (Professional Fees), and would consider the feasibility for the office space to integrate related organizations, which then led to the following:

Motion: made by Mayor Cecil Clarke, 2nd by Deputy Mayor Eldon MacDonald, for CBRM to initiate the development of a business plan to determine the best location of a port office with recommendations on how, or if, the port office could maximize more from the efforts of related organizations by being housed together in the Port Office. Motion was passed.

(Let’s think for a moment about what happened there: the interim board of the Port of Sydney, an arm’s length corporation owned by the CBRM, passed a motion instructing the CBRM to initiate development of a business plan. How, exactly, did that work? And what “related organizations” are they contemplating housing in the Port office?)

Although the board minutes don’t mention it, what had happened in the meantime was that the Port’s offer for 90 Esplanade was turned down, a fact Usher confirmed for me by email on Monday:

Our offer was rejected by JIJ.  We would not agree to their asking price (over one million).

 

Sold!

In December 2016, JIJ Holdings got its asking price, inking a deal to sell 90 Esplanade to 3046975 Nova Scotia Limited, a company whose listing in the Nova Scotia Registry of Joint Stock Companies looks like this:

Patrick Donovan and Kiki Kachafanas are husband and wife. (And although 3046975 Nova Scotia Limited is currently revoked for non-payment, I think it’s safe to assume Donovan will soon settle his registry bill — the company has been revoked and reinstated twice before, most recently last year.)

Donovan agreed to buy 90 Esplanade from JIJ Holdings for $1,185,324.40 (which rounds to $1.2 million which seems to be what every property on the Sydney waterfront is worth, except for the ones that are worth $6 million). Strictly speaking, Donovan signed a mortgage agreement with JIJ Holdings that would see the latter advance the $1.2 million to be repaid at 3% interest. You can see those documents below. You will note that the mortgage agreement is witnessed by Demetri Kachafanas, who is the CBRM’s Regional Solicitor — and Kiki Kachafanas’ brother.

IMG_20171002_0001

 

What’s the problem?

This is all legal of course, but doesn’t it seem a little…what’s the word…cozy? Especially following on the heels of BCB director Danny Ellis’ waterfront property win with the CBRM.

That Donovan was a generous donor to CBRM Mayor Cecil Clarke’s mayoral campaign only adds to the coziness.

Source: CBRM. (Click to enlarge)

Would 90 Esplanade have sold for twice its assessed value if the Port hadn’t expressed interest in it? Is the new owner counting on renting office space to the Port and whatever “related organizations” the CBRM is contemplating housing in the Port office? Is there, somewhere in the Civic Centre, a “credible business plan” explaining “how the port office could maximize more from the efforts of related organizations by being housed together in the Port Office?”

I could be wrong, of course. Perhaps Donovan has other plans entirely for the building. But when I asked Usher if there was any possibility of the Port eventually renting office space in 90 Esplanade, she responded:

There is no agreement in place nor under discussion. The Port is in dire need of new office space and this may represent one of several options however any arrangement contemplated must be affordable within the port budget.

So, as I said at the outset: watch this space.

 

 

 

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