8 January 2009
Cleanup Derailed Past CPR Deals
Owen Sound station.
Owen Sound Ontario - At least two potential purchasers of
the historic Canadian Pacific Railway station in Owen Sound lost interest after learning how much it would cost to clean up the
waterfront property.
Owen Sound businessman Steve Busey said he wanted to buy the east-side property a few years ago and turn it into a bistro.
"We were looking seriously at it, but we were deterred by the huge cost of getting that land brought back to satisfactory
condition environmentally," he said Wednesday.
Busey said his real estate agent informed him it would cost between $750,000 to $1 million to adequately clean the land and prevent
contaminants from migrating from adjoining properties.
Mayor Ruth Lovell Stanners said Tuesday that Owen Sound has conditionally purchased the property, but declined to reveal the price
until the deal is finalized.
City manager Jim Harrold said the primary condition deals with the environmental condition of the property. CP Railway has accepted an
"atypical" offer, he said, which allows the city to negotiate a final sale price based on the cost to adequately clean the
property.
"That's why we have negotiated this period of time (before closing the deal), to test the property," he said Wednesday.
Workers are on the property this week, boring holes into the ground to test for contaminants.
City council could decide to pay more for the property's cleanup than would a private investor, Harrold said, based on a "civic
commitment." If the property continues to sit idle, the city could eventually be forced to clean it anyway, he added.
This isn't the first time the city has considered cleaning a vacant harbourfront property to prepare it to be used again.
It also promised to pay to clean up the site of the new Grey Bruce Health Unit building, but ran into problems with the final cost,
reported to be more than $1 million. Initial estimates pegged it closer to $400,000. The city is in a legal dispute with a consulting company over the cost.
Neale Kemp, owner of the historic former Owen Sound post office building, signed a conditional sales agreement for the CPR property in
2001. Environmental assessments revealed contaminants were migrating onto the site from a nearby property, which once housed a
gasification plant, Kemp said.
Kemp said he withdrew his offer over the cost of cleaning it up and because of delays reaching an agreement with CP to do the work.
"It would have been a couple hundred thousand dollars, easily," he said Wednesday.
Chris Hughes, the city's environmental superintendent, said the city has conducted several tests on the property, which revealed some
contaminants south of the site, including fuel and hydrocarbons.
"I wouldn't call (the site) clean, but I'd say it's manageable," Hughes said.
He declined to provide The Sun Times with a copy of the property testing reports because the sale is not final.
Hughes said he is unsure if anything has been done to reduce the migration of contaminants since Kemp withdrew his offer.
Shawn Carey, Owen Sound-area supervisor with the Ministry of the Environment, said the agency has not received a record
of site condition on the property and would only become involved if a "more sensitive land use" is considered.
The historic train station is part of a cluster of former railway properties that once included a roundhouse and turntable. It has
been left to deteriorate for decades.
Harrold said if the deal becomes final, the city intends to ensure the station is restored.
Michel Spenard, a spokesman for Canadian Pacific, wouldn't answer questions about the property's environmental or structural
conditions, citing confidentiality agreements.
He said CPR was required to secure federal government approval to sell the property because the building is designated as a heritage
railway station.
"The market for such an asset is narrow to say the least," he said.
The 1985 Heritage Railway Stations Protection Act only bans railway companies from altering or selling a designated property without
federal government approval. Private owners are not bound by the same legislation.
"If we want the waterfront to move ahead... then I think we have to be the catalyst to get it moving," said city/county
Coun. Arlene Wright.
Cleaning the property is a "good opportunity" for the city, she said, since it will provide additional revenue once
occupied.
Coun. Bill Twaddle said most of the city's vacant waterfront land is contaminated by former industrial uses. The purchase and cleaning
of the property by the city would make the property more usable by purchasing it and cleaning it up.
"I think it's just too important for the development of the waterfront to just let it sit there," he
said.
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