Domtar led us down the garden path
Easy come, easy go.
That’s what Montrealers can take away from the sale of the verdant and vibrant Jardin Domtar to a developer who plans to put up a 36-storey condo tower next to the western entrance to the Place des Arts métro station.
The Jardin Domtar was, until recently, a welcome gift to Montreal from the pulp and paper company headquartered next door. The land has housed a colourful playground for the children attending the Centre de la petite enfance Origami on the ground floor of the Maison Domtar, as well as a tranquil and treed oasis that won landscape design awards.
This was private land given over for public use — a widely appreciated gesture of largesse celebrated in the garden’s name. Domtar acquired the site, a former parking lot, from the city in 2000, a sale that came with a condition to transform at least part of the area into green space. And for 18 years, Domtar didn’t disappoint.
Jardin Domtar was a concrete sign of the company’s commitment to environmental sustainability and community improvement, which it so readily touts on its website.
But that’s all over now. Apparently, the concept of big companies “giving back” comes with an unspecified expiry date, and the public shouldn’t count on contributions to the common good lasting forever.
Domtar recently sold the property to Groupe Canvar for a reported $14 million. The developer plans to construct a hotel/condo project on the site between President Kennedy Ave. and de Maisonneuve Blvd., just west of Bleury St. in the booming Quartier des spectacles.
The question that emerges from this sad affair is: Why?
Why would Domtar take back the beautiful gift it bestowed on Montrealers?
Is it struggling for survival and being forced to auction off its assets in a fire sale? A look at the company’s financial statements suggest this is hardly the case.
The maker of “products that people rely on every day” reported a loss of $212 million for 2017, compared to a $128-million profit the year before. But sales of paper, diapers and raw pulp, among myriad other products, were $5.16 billion for fiscal 2017 — yes, billion with a b — up slightly over the previous year.
Its debt is being paid down slowly. Domtar announced a 4.8 per cent increase in the dividend it pays to shareholders in the last quarter — also not something a company usually does if it’s in trouble.
Commenting on the full-year results, Domtar president and chief executive officer John D. Williams certainly didn’t sound worried about the company’s fortunes.
“We generated nearly $450 million of operating cash flow and continued our solid track record of rewarding shareholders with a high payout ratio while maintaining financial flexibility,” he said. “Looking ahead, we remain focused on maximizing long-term profitability and value creation.”
So, what’s a one-time injection of $14 million to Domtar’s bottom line and future prospects?
Other than temporarily pleasing shareholders, who generally tend to approve of such sales, the transaction accomplishes very little.
But for a company that seems to pride itself on its social responsibility, this transaction may be counterproductive.
Domtar has donated to local hospitals, including the McGill University Health Centre.
Its website highlights efforts to promote literacy and help save the bald eagle population. “Healthy forests are in Domtar’s best interests,” the company proclaims. “This means that typically for every tree harvested, several more are replanted or naturally regenerated.” Yet Domtar can’t find it in its heart to preserve a handful of thriving mature trees in its own backyard.
How genuine are these efforts to do good if they can be reneged? Or is it little more than PR in the first place? The public has every right to be skeptical.
The new Projet Montréal administration seems to have thrown up its hands, saying Jardin Domtar is private property, the zoning allows for this, and it would be too expensive to buy or expropriate the land.
Domtar may be perfectly within its rights to sell this property, but that doesn’t make it right.
In fact, the move lacks any shred of social acceptability — something Canvar should also consider.
Canvar has been building condo projects big and small in Montreal for 40 years. But odds are it has never constructed anything on a site as beloved as the Jardin Domtar.
Marc Varadi, of Canvar, who took the time to respond to questions about the project when Domtar didn’t, acknowledges the strong public reaction.
“Although we are sympathetic to those who are expressing their views, we have collaborated with all of the stakeholders, including the municipal administration,” he said.
Canvar is pledging to preserve a portion of the green space, but could not say how much of the current footprint will be left. Varadi also noted: “If the city were to find another place to relocate les Jardins Domtar, we would be happy to make a financial contribution to it.”
Transforming a small parking lot into green space between President Kennedy and de Maisonneuve to the east of Bleury, may eventually be held out as a peace offering to a disillusioned public. Whatever gets created, though, will have to be rechristened something other than Jardin Domtar 2.
For it will lie in the shadow of what might once have been an emblem of Domtar’s generosity, but instead became a monument to its greed.
Domtar may be perfectly within its rights to sell this property, but that doesn’t make it right.