Mayor, Council to Meet Barbusci at Holiday Inn Today

Albert Barbusci (via Novaporte website)

Albert Barbusci (via Novaporte website)

Mayor Cecil Clarke and the CBRM council will meet port promoter Albert Barbusci on Wednesday afternoon in what was supposed to have been a secret session between 1:30 PM and 3:30 PM at the Holiday Inn.

Barbusci, of Sydney Harbour Investment Partners (SHIP), flew into Sydney Monday night, according to CBRM economic development manager John Phalen, who told the Spectator the Montreal-based port promoter wants to update councilors on his progress developing and marketing a container terminal for Sydney.

CBRM Municipal Clerk Deborah Campbell Ryan is aware of the meeting, the clerk’s office told the Spectator, but was not involved in organizing it — that job apparently fell to Phalen, who notified councilors of the event.

Councilors with whom we spoke were not provided an agenda. Contacted on Monday afternoon, Barbusci declined to comment on his progress during a telephone interview with the Spectator.

 

Ch-ch-ch-changes

The subject of the meeting may be a sweetheart land deal for SHIP – a company owned by Barbusci and Montreal-based real estate developer Canderel.

Last Thursday morning, Nova Scotia Municipal Affairs Minister (and Sydney-Whitney Pier MLA) Derek Mombourquette introduced amendments to the Municipal Government Act (MGA) designed to facilitate the development of a container terminal in Sydney.

Phalen says there are three purposes to the legislation that CBRM requested the Stephen McNeil government introduce, all critical to a deal going forward between CBRM and SHIP:

• Allow for the sale and/or lease of land below market value

• Allow for a tax abatement on the land

• Allow for a 99-year lease.

The revised legislation states that if the CBRM chooses to sell or lease “eligible municipal property” valued at more than $10,000 dollars at less than market value, council must first hold a public hearing on the matter. Proceeding with the sale or lease would then require a two-thirds majority vote by council.

The lease agreement would be about the same length as that between the United Kingdom and China for Hong Kong. Phalen explained that the lease and tax arrangement is a century long to ensure the estimated $700 million investment in a container terminal operation can be recouped, something both he and Mayor Clarke say could not be achieved with a 20-year lease. (Of course, no one signing the agreement today will be alive to say whether the investment has paid for itself by the time the lease expires.)

 

Greenfield Site

In announcing the proposed changes to the MGA, Mombourquette told the Cape Breton Post he “didn’t have the details of the deal the CBRM is proposing, but said the CBRM did its own vetting of its proposal by hiring PriceWaterhouseCoopers.”

We’re basing these changes based on the proposal that they brought forward and the work they’re doing with SHIP.

Greenfield site or Novaporte, if you prefer.

In fact, the only terms made public from the Option and Development agreement the CBRM signed with SHIP last November were those included in a letter from that PwC auditor, Richard Deslauriers. Deslauriers wrote that when the Option and Development Agreement is triggered, SHIP will receive:

The option to lease lands comprising an area of approximately 431 acres located in Edwardsville for the purpose of developing a wharf and a container terminal. This is referred to as the PORT SITE.

The option to purchase the freehold title to lands comprising an area of approximately 1,000 acres for the purpose of developing a multi-tenant logistics site. This is the LOGISTICS SITE.

Barbusci told the Spectator he wants to lease 200 hectares (500 acres) and buy 400 hectares (1,000 acres). Another 100 hectares (250 acres) are owned by First Nations.

The amount of land involved is almost 10 times the size of Point Pleasant Park in South End Halifax which is adjacent to the 30 hectare (75 acre) Halterm Container terminal.

Payment for the property was spelled out in a second motion passed during that November council meeting:

When the option agreement is exercised with Sydney Harbour Investment Partners Inc. in relation to the Port Site, the payment of $10,000,000 will be held in reserve and will be used in lieu of borrowing for capital purposes until the reserve is depleted. The equivalent borrowing amount shall not be increased as a result of this reserve which will result in an accelerated debt repayment and resulting in increased available operating funds.

CBRM CAO Marie Walsh said last November that $10 million price tag included both the Port Site and the Logistics Site.

Mayor Clarke also told the Spectator the land in question is valued at $10 million. Neither Clarke nor Phalen would say what the sale and lease prices would be. Barbusci declined any comment on price but offered to discuss the agreement in about a month. When asked for details of the SHIP/CBRM agreement, Mayor Clarke and Phalen said they were subject to an exclusivity agreement and could not be provided.

Whatever the price, it would be below the actual value of the land sold or leased and the property itself could be subject to a tax abatement for up to 99 years.

But another element of the revised provincial legislation is that the CBRM council and citizens must be informed of the details of the agreement. Phalen says the agreement will not be finalized until after the legislation passes; however, the economic development manager says the municipality is consulting lawyers to see if citizens must be informed of the contents of the agreement before it is finalized.

He promised to respond to inquiries about the timing of a public meeting by Tuesday, but has not been available to answer questions.

 

Political Response

Vernon Pitts

Vernon Pitts

Guysborough County Warden Vernon Pitts says the amendments to the Municipal Government Act are unfair and tilt the playing field.

He says Guysborough taxpayers paid about $3.2 million dollars to buy about 100 hectares (250 acres) of land for a proposed container terminal at the Strait of Canso. The warden says the property was then sold at market value ($3.2 million) to the developers of the proposed container terminal, the Melford Group.

Pitts says it’s very likely that Guysborough municipal officials will formally object to the legislation when it comes before the Law Amendments Committee.

But while he objects in principle to selling and leasing land below market value and granting tax abatements, Pitts says if the legislation is passed, Guysborough will seek the same authority from the province. Pitts predicts that the legislation will trigger “a race to the bottom” as municipalities compete with one another to attract big projects and businesses.

The Nova Scotia Progressive Conservative Party and Nova Scotia NDP are keeping quiet for now on where they stand on the legislation. Neither would commit to support or oppose the legislation.

Some CBRM councilors contacted said they were unable to see the benefit to taxpayers of a 99-year lease and a below-market-value land sale with a century-long tax abatement.

The explanation may come in the closed door, secret meeting at the Holiday Inn on Wednesday.

Rick Grant

 

 

Longtime CTV reporter Rick Grant began his journalism career in radio here on the Island. He is now based in Halifax.

 

 

 

 

 

 

 

 

 

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