Game changer
CBRM council approves port agreement, paves way for container terminal
Cape Breton Regional Municipality council has approved what Mayor Cecil Clarke calls a “significant” agreement aimed at smoothing the turbulent waters of port development.
On Monday, Clarke was all smiles after council officially approved agreements between the municipality and the developers of Sydney harbour’s proposed container port.
“This is the turning point for the Port of Sydney,” said Clarke, following a special session of council that was called following two days of secret meetings.
While it was public knowledge that the in camera sessions, held last Thursday and carried over to Monday morning, revolved around the Port of Sydney, participants were tight-lipped about the details leading to speculation the meeting may have been about the proposed second cruise ship berth.
But the true nature of the mysterious gatherings, which on Monday included provincial cabinet ministers Derek Mombourquette and Geoff MacLellan, was revealed when council held a special meeting to vote on motions pertinent to future development of the proposed Novaporte container terminal and the Novazone logistics park, both to be located in Edwardsville on the north side of Sydney Harbour.
“This is where we now step off to the global stage for the investments that are necessary to put shovels in the ground for a container terminal and the establishment of a logistics park,” said Clarke, who added that the motions passed by council are the culmination of 18 months of negotiations.
“The developers can now enter into legal agreements to actually proceed with the development, the investment and the related activities for the Port of Sydney to move forward for container operations — but for that to proceed we needed the decision of council.”
So what exactly did CBRM council decide on Monday?
Council approved a motion that sees the Cape Breton Regional Municipality enter into an “Option and Development Agreement” with Sydney Harbour Investment Partners Inc. (SHIP). It also directs and authorizes Clarke and the municipal clerk to execute the “Port Facility Lease and Agreement of Purchase and Sale” in accordance with the terms laid out in the negotiated deal.
In plain language, the agreement means that SHIP, which owns the exclusive rights to market the Port of Sydney, has no more hurdles to face at the municipal level and is now free to negotiate and make deals for container port development.
“The developer can now go and conclude whatever commercial agreements that they have to and financial arrangements they have to put in place to proceed,” explained Clarke.
But before giving its approval, council spent hours discussing terms of the agreement that were reviewed and endorsed by the multinational professional services firm PricewaterhouseCoop-ers (PwC). In fact, PwC managing director Richard Deslauriers told council that the agreement “meets CBRM’s goals and is a low-risk approach to encouraging economic development.”
That address was part of the in camera session, that according to Clarke was held due to the sensitive nature of the agreement’s details.
“The actual detailed agreements, they embed a lot of the financial arrangements and formulas and the calculations how revenue streams would flow — we have commercially sensitive agreements right now because they (the developers) are in the global market place and there are competing ports,” he said.
The agreement also includes the condition that when a ports project deal is inked the developer will be required to make a $10 million payment to the CBRM.
“It’s an upfront condition — once they commit to the project, they have to cut a $10 million cheque before they can proceed to break ground and put a terminal in place,” said Clarke, who added that many of the undisclosed details of the agreement are complex.
“We had to have safeguards in place aside from the one-time payment, we had to make sure we had things like a recovery tax that we are not out money, so if we put in water, sewer lines, services, if we provide fire or police protection, that those costs are paid back to the municipality.”
And, it was the guarantee that the municipality would not lose any money on the undertaking that convinced councillors to approve the agreement that also allows for the sale (with the CBRM maintaining control) of the land if a lease cannot be arranged.
The only dissenting vote was that of veteran Sydney representative Ray Paruch, who referred to the process as an “information overload”.
“This endeavour was, again, a rush job that ended up in the ditch — I honestly don’t know if this is a wise and prudent decision on behalf of the people I represent,” Paruch said in council, while warning fellow councillors that the decision is irrevocable.
After Paruch, the other 11 councillors then each took a turn to comment and declare their support for the agreement.
“I’m not going to lie — I was a bit hesitant walking into this, knowing what a contested issue this has been,” said first-term councillor Amanda McDougall.
“But our CAO (chief administrative officer Marie Walsh) has said throughout our discussions that the protection of the taxpayer asset was first and foremost of mind and it wasn’t until today (Monday) that I really, truly comprehended all of the protections that are put in place.”
Coun. Darren Bruckschwaiger needed somewhat less convincing.
“It’s been a long time coming – this is a game changer and this is something that can really bring people back to Cape Breton and that excites me,” he said.
Another veteran councillor, Jim MacLeod, also offered his unbridled enthusiasm.
“This is a day that I have totally waited for a long, long time — it has the possibility of being larger than steel when it comes to employment,” said MacLeod, who added that such opportunities only come around once in awhile.
Before departing city hall, Clarke hinted to reporters that a deal may be in the offing sooner rather than later.
“Things are happening at a very fast pace and rate — I’m very confident that in the coming weeks I’ll be traveling again to help with the selling of the project and bringing an opportunity forward,” he said.
“This was very timely to bring forward because we need to move, decision makers need to make their decisions and they’re prepared to do that right now and so I look forward to an early Christmas present or a great way to ring in the New Year.”
However, any potential deals may be contingent on a longterm (99-year) lease, something the municipality does not have the authorization to sign. But, the Nova Scotia government does and both Mombourquette and MacLellan assured council that the province will do all it can to help secure economic development for Sydney harbour.
Prior to the recent negotiations on the Option and Development Agreement, the CBRM spent $6 million on the purchase of the 431-acre Greenfield site that is directly across Sydney harbour from the far north end of Whitney Pier. Another $38 million was spent to dredge the harbour in 2011.