CBRM Council: Wither Waterfront Development?

Last night’s council discussion regarding Harbour Royale Development Limited’s new Sydney waterfront proposal was fascinating in many ways but the most interesting aspect to me (besides the outcome, which was council refusing to entertain it and voting instead to issue a new request for proposals for CBRM-owned land on the waterfront) was the glimpse it gave into the behind-the-scenes maneuvering around this development.

 

Harbour Royale Development Ltd's Sydney waterfront plan.

Harbour Royale Development Ltd’s Sydney waterfront plan.

 

First, a quick recap: in 2017, CBRM council issued a request for proposals (RFP) to develop the Sydney waterfront from the Holiday Inn to the Cruise Pavilion, HRDL submitted a bid (the only bid) that included a new central library and council approved it. HRDL openly declared the public library was to be the “catalyst” for a private development that was to include a residential tower, a commercial tower, a “marine interpretive center” and an expanded Holiday Inn housing a casino. HRDL’s initial agreement was for 18 months and it was later granted an 18-month extension.

In March this year, HRDL, having made no progress on any aspect of its waterfront development, asked council to seek funding for a design and scope of work study for a waterfront library. Council, for a variety of reasons, refused. During last night’s meeting, Mayor Amanda McDougall acknowledged that at this point she’d emailed Chernin (ccing council) to ask for a revised proposal before HRDL’s pre-development contract expired in June, but it seems no proposal was received before June 30.

Instead, HRDL requested a second extension to its agreement, which council refused during its July 6 meeting.

Then, according to what CAO Marie Walsh told council last night:

…the solicitor and myself met with Mr. Chernin and we had talked about the discussions around the council, he had asked, “Do you think they would entertain a proposal?” and our indication from the discussions was yes, that they would. It was our belief that they would entertain another proposal.

And so HRDL prepared another proposal which — wait for it — Walsh and regional solicitor Demetri Kachafanas “brought to an in camera session which directed it here.”

Deputy Mayor Earlene MacMullin interjected that it had been directed to a public meeting because council refused to discuss it in camera.

 

New proposal

CAO Marie Walsh presented council with three options: agree to consider Chernin’s proposal (details of which were not provided), issue a new RFP for the waterfront development or do nothing at this time.

District 1 Councilor Gordon MacDonald moved that council issue a new RFP, Deputy Mayor Earlene MacMullin seconded and then the wild rumpus began. (I’m exaggerating, but things got quite animated.)

The subsequent discussion centered around whether Chernin had been given to believe he would be permitted to submit another proposal after the expiration of his pre-development contract.

Martin Chernin

Martin Chernin addressing CBRM council (Dwight Rudderham in background), 12 October 2021.

Mayor McDougall’s position was that council had indeed discussed the possibility of entertaining a new proposal in “general conversation,” but had passed no motion to that effect. Deputy Mayor MacMullin was adamant that she had only imagined them entertaining such a proposal as part of a new public process.

Chernin himself saw it differently. Permitted to address council to say whether he had been given to believe he could submit a new proposal after the expiration of his contract, he said:

That’s what I surmised. Since we’ve been in it for three years. Since my company has been a substantial developer in this community of CBRM. We’ve built over 400,000 square feet of space. We pay the municipality over one million dollars in property taxes every year. So I’m concerned about how taxes are spent also. And we put considerable time and effort into this. Council in their wisdom, or lack of it, said that they weren’t going forward with a library, so I just saw there’s an opportunity to develop my land, which is the middle…between the municipality’s land which they got from ECBC, the Yacht Club, and the piece they purchased from Nickerson. So, all I’m saying is that I’m not getting any younger. I’ve been a large employer in this community, lived here all my life, I don’t know how many hundreds of people…

(Saying the quiet part out loud?)

Mayor McDougall (politely) cut him off at this point, asking that he answer the question, he said he had and returned to his seat. He came back later to answer another question, directed to him by District 8 Councilor James Edwards, about whether he could not simply develop his own land now:

We’re gonna look at another commercial and residential development on my land and the municipality’s land which I would purchase at market price.

Which means Chernin must have discussed the possibility of buying the land with Walsh and Kachafanas who then brought this idea to an in camera session of council, although how the CBRM could sell waterfront property to Chernin without any kind of public process baffles me. Also worth noting: Kachafanas expressed the opinion that council could do a deal with HRDL because “It’s almost like an extension of the first one,” which is an interesting position for a lawyer to take, “it’s almost like” not being a phrase often heard in reference to legal contracts. And Walsh suggested that “We could just declare the land surplus and sell it for market value. We wouldn’t go to an RFP if you didn’t want to.”

(I also noted that Chernin told council he had had a building permit for a “six-story building” that he’d abandoned in favor of the broader waterfront development plan. I wrote about his plans for that building before, noting that CBRM had changed the planning by-law for him to allow for an 11-story building which has been shrinking ever since.)

 

New RFP

Councilor Gordon MacDonald steadfastly opposed to entertaining a new proposal from HRDL, although he stressed the company would be welcome to participate in the new RFP.

Councilor Edwards and District 7 Councilor Steve Parsons were the most supportive of Chernin, Parsons accepting that they had agreed to entertain a new proposal and arguing it would send a bad message to the business community if they refused to do so.

CBRM Deputy Mayor Earlene MacMullin

CBRM Deputy Mayor Earlene MacMullin, council meeting 12 October 2021.

District 5 Councilor Eldon MacDonald, although a staunch supporter of Chernin’s project, said it seemed “we’re going into an exclusivity agreement that we just got out of,” and while he acknowledged the “time and money” HRDL had expended on the project, he said it had always been his understanding that if the pre-development agreement expired, they would go to another RFP. That said, he expressed doubt any other developer would be interested in the CBRM land given Chernin’s property was “in the middle” of it.

Deputy Mayor MacMullin pointed out that that’s where Chernin’s property had been when they sent out the original RFP. She had also mentioned earlier that circumstances have changed since that original request for proposals — the NSCC Marconi campus is now under construction on the waterfront and the CBRM is experiencing a “building boom,” which might mean more developers are interested in the proposition.

In the end, council voted 9 to 2 in favor of a new RFP — with the same scope as the original RFP.  Parsons and Edwards were the only no votes. (District 10 Councilor Darren Bruckschwaiger is on sick leave and District 12 Councilor Lorne Green was not in attendance last night. A caveat, though, this is based on my own vote count, council is meeting at Centre 200 so there is no graphic representation of the vote, as there is when they meet in chambers.)

In answer to a question from District 4 Councilor Steve Gillespie, CFO Jennifer Campbell said the RFP process would take up to eight weeks.