Waiting game
Still few public details on potential valuation of second berth property
SYDNEY – The Cape Breton Regional Municipality has finally filed a reply to the owner of land expropriated for the construction of a second cruise ship berth in Sydney but hasn’t yet made public a document it is relying upon in the effort to place a value on the land.
The response was filed with the Nova Scotia Utility and Review Board on Wednesday. The matter is formally listed with the regulator as suspended, which could mean that negotiations are ongoing between the CBRM and the property’s former owner, numbered companies owned by North Sydney resident Jerry Nickerson.
The CBRM’s reply, signed by regional solicitor Demetri Kachafanas, is brief. It refers to three appraisal reports prepared by different appraisers but none of those reports have yet been filed with the UARB. Two of the reports were commissioned by Nickerson and one was commissioned by the CBRM. The Cape Breton Post has requested the appraisal reports from the CBRM and had several other questions about the expropriation process but responses were not received by deadline Thursday.
In the CBRM’s reply, Kachafanas writes that the CBRM admits that Nickerson “is entitled to compensation for the fair market value of the expropriated properties.” It also states that it doesn’t take issue with the methodology set out for determining fair market value by the claimant’s appraisers but “disputes the appropriateness of the sale prices selected for comparison by (the appraisers) for the purpose of determining fair market value for the expropriated properties.”
In particular, it notes the CBRM disputes using the sale of the former Robin Hood Flour warehouse properties as a comparison in determining the value of the site currently at issue, noting the Robin Hood Flour lots were “purchased by a highly motivated buyer from an unwilling seller and the sale price does not represent a sale for fair market value.”
The CBRM had begun down the road of determining the value of the Robin Hood Flour property, which was waterfront land also owned by Nickerson, that it expropriated. But in 2011, it abandoned the process when it reached a settlement with Nickerson and announced it would partner with Enterprise Cape Breton Corp. to purchase a property to expand the area where cruise ships dock and allow for the extension of the boardwalk.
The CBRM and ECBC each contributed $750,000 to that purchase. The current assessment of that property is listed as $155,300 commercial taxable and $711,000 commercial exempt.
The process of determining the value of the land expropriated for the second berth, which is now under construction, has been slow-moving. In February, a twoparagraph email was filed on the UARB website from Nickerson’s lawyer that indicated that Kachafanas had been provided with Nickerson’s new appraisal. The email indicated the claimant is relying on it and an earlier report dated December 2017 to set the compensation for the expropriation.
That came after the board had prodded the parties for some updates on where things stood with the proceedings.
Construction of the second berth is currently underway by contractor Zutphen Contractors of Southwest Mabou.
The Cape Breton Post previously requested a copy of the most recent Nickerson appraisal from the CBRM. The CBRM indicated that because Nickerson commissioned the report it had to be obtained from his lawyer, who did not reply to The Post’s request.
Nickerson has been reported to be seeking up to $6 million for the property while the CBRM budgeted about $2 million for the transaction.
The title to one of the parcels in question is the subject of a dispute between one of the numbered companies and the federal Crown. Nickerson’s company continues to assert its title to the parcel and the parties have agreed to proceed with the determination of the valuation and the fixing of compensation for it and not wait until a conclusion of the title dispute.
The parcel under dispute with Ottawa is a water lot with an assessed value of $302,600.
In all, six parcels make up the property being used in the construction project, which is located to the north of the existing cruise ship berth and was formerly the site of the Sydney Engineering and Dry Dock.
The contract for construction of the second berth was awarded to Zutphen for just over $19 million after the project was scaled back and re-tendered. It is being funded jointly by the CBRM, the province and federal government. The CBRM must fund any cost overruns.
In August 2017, The Post filed an appeal of a decision by the CBRM to deny the release under Freedom of Information and Protection of Privacy legislation of an environmental assessment that Nickerson had commissioned of the property. The Post’s appeal has not yet been assigned to an investigator, as there is a backlog within the province’s Office of Information and Privacy Commissioner.