The $50,000 issue that just will not go away, is it even legal?

I received the following comments from one of my readers who is questioning if the $50,000 taken out of land reserves to pay the Vachon group so that "they" own the rights to the Best Western name is even legal under the MGA.
If it is legal does this open up the possibility that anybody trying to start a business in the Pass could approach council for initial funding? If council was in agreement could that funding then be provided from municipal reserves?

Unapproved  Council Minutes state Best Western/ Vachon  funds came from a Municipal Land Reserve Account - see their website or image at bottom of this note.

Section 671 (2) of the MGA 671 states municipal  reserves can only be used for specific items, not hotels or economic development  - see excerpt.

MGA Section 671 (4) states municipal reserve monies must be separately accounted for -- see excerpt.

With the following information from the MGA

Division 9
Use and Disposal of Reserve Land

Use of reserve land, money

671(1)  Subject to section 676(1), environmental reserve must be left in its natural state or be used as a public park.

(2)  Municipal reserve, school reserve or municipal and school reserve may be used by a municipality or school board or by them jointly only for any or all of the following purposes:

                                 (a)    a public park;

                                 (b)    a public recreation area;

                                 (c)    school board purposes;

                                 (d)    to separate areas of land that are used for different purposes.

(2.1)  Community services reserve may be used by a municipality for any or all of the following purposes:

                                 (a)    a public library;

                                 (b)    a police station, a fire station or an ambulance services facility, or a combination of them;

                                 (c)    a non‑profit day care facility;

                                 (d)    a non‑profit senior citizens facility;

                                 (e)    a non‑profit special needs facility;

                                 (f)    a municipal facility providing service directly to the public;

                                 (g)    affordable housing.

(3)  Despite that land is designated as municipal reserve, school reserve or municipal and school reserve, the municipality and one or more school boards may enter into any agreement they consider necessary with respect to a use referred to in subsection (2) or for any matter related to the use.

(4)  Money provided in place of municipal reserve, school reserve or municipal and school reserve and the interest earned on that money

                                 (a)    must be accounted for separately, and

                                 (b)    may be used only for any or all of the purposes referred to in subsection (2).

Tuesday night time to spend our money.

In the midst of these dark dreary days of August nothing better than to bring a ray of sunlight into our life’s by attending the regular meeting of council Tuesday night August 6, obviously Council and administration are doing everything possible to get their ducks in a row prior to the commencement of the election campaign.

For your information this is a recap of the meeting the issues dealt with, I look forward to the comments flowing in on the issues, council and administrations performance.

CAO Report

Its official Albert Headrick Director of Protective and Community Services is leaving the Pass on August 16.

Community Peace Officers Report great joy in announcing that almost $200,000 in fines have been written after one year in place.

Fire Rescues had 12, 911 calls in the month of July

New banners were installed around town administration received lots of positive response.

Ice is now ready in the Coleman complex

Trans Rockies race took place last week

Devon has donated an air compressor to the community, which will save us having to purchase one in 2015 (savings of up to $50,000)

Uroc is looking for contractors to build mountain bike trails of the ski hill.

Temporary surface repairs will be made at the Coleman drug store area.

Asphalt Paving projects delayed until the end August

Recreation Feasibility study is under way.

Culture and Heritage Board had its first meeting July 26

Tenders for SCADA project came in $200,000 to high will be looking to the province for additional funding.

Municipal Elections

Advance Poll approved for Oct 15

Institutional vote will be done the same as the last election

Voting subdivisions and voting stations will also be the same as last election

Crowsnest Centre Demolition

Four bids received range of $585 to $800K

Dakota Reclamators out of Calgary was the low bidder

CAO informed council that municipal lawyers had reviewed the tender and it was ironclad.

Project to be funded by taking $250k out of MSI capital funding and $350K out of the Mill rate stabilization reserve.

Councilor Saindon was concerned that the municipality was not getting a full priced bid, administration had asked for quotes on back filling the centre foundation once the building was removed this was not brought back to council. He felt the potential cost of this job was more in the range of $700,000.

He was also concerned due to Gene Conklin (Regional Director of Development at Best Western had advised the municipality that to make the land the most attractive to potential buyers it should be fully remediated.

Councilor Gallant stated every hotel has a basement, maybe it will not need back filling.

Councilor Saindon asked if the hotel does not come for three years are we just going to leave an 8-16 foot hole there. He also stated that the hotel was projected to go on the east end of the property the old hospital was on the west end. He also stated clay would have to be brought in and trucked at least 30-40km very expensive.

Councilor Londsbury asked if there was a basement under the entire building, the CAO did not know.

CAO Thompson felt that we should demolish the building then figure out our options of what to do with the hole at that point.

Councilor Gallant felt we did not know where the hotel would eventually go.

Motion to proceed with the demolition at a cost of $585,000 was passed by a vote of 4-2 (Saindon, Sage opposed Gail was not present for the vote)

Hotel Application Fee ($50,000 for Vachon group)

Administration recommended funds be taken out of municipal land reserve.

Councilor Saje referred to a conversation he had with Jeff Carlson CAO of Clay cup developers who apparently working with Medican prior to Group Vachon coming on board.
He stated that Mr Carlson told him municipalities do not put up the funding for the rights to a hotel. He also stated that the Best Western could have been done by Clay cup and that if Vachon group with draws somebody else could pick up the rights contrary to what the CAO had informed council at the special meeting. CAO stated that he had received that information from the head of marketing at Best Western.
Councilor Gallant agreed that it was not normal for municipalities to put up the funding, but Mr Carlsons words did not carry a lot of weight with council due to the fact that they were fired by Medican in November.
Councilor Saje informed council that he did not know Clay Cup was fired in November and that Vachon Group did not come on board until spring.
Mayor Decoux stated that the rest of council was aware that Clay Cup was released by Medican.

Motion to take $50,000 out of Municipal land reserves was passed by a vote of 4-2 (Saindon, Saje opposed Gail not present)

     

NOTE: MORE TO FOLLOW

The Mayor's predictions for the Crowsnest Centre/Hotel

Does anybody think that maybe we should have looked back over the last 18 months before we handed $50,000 over to Vachon group to bring in the big fancy hotel at the Crowsnest Centre site. Two years from now I hope this hotel is a little more visible than the "Naturally Rewarding" on our new banners.


http://www.youtube.com/watch?v=MQygIHfnH9E




Note: Cost of administration $4325 per day

Special Council Meeting-managing your money

Appointment of Returning Officer:

Administration recommended that Ms Lisa Sygutek be appointed as the returning Officer for the upcoming election.

Annexation Process with Ranchlands:

Council voted to begin the process of annexing the southern most 870 quarters sections of the MD of Ranchlands.

Few comments MD of Ranchlands has expressed zero interest in working with the CNP.

Riversdale has not completed the purchase of Grassy Mountain at this time.

Fees for annexation are payable at the end of the process (roughly $44,000)

Notice of Intent can be withdrawn or amended at any time.

Linear Assessment value of those properties is unknown at this time. Point was made that most of that land is in the forest reserve so likely hood of linear assessment is very low. Also costs of servicing that area are unknown.

Hotel Development:

Council voted to pay the $50,000 to maintain the rights to the Best Western name for two years with the funds coming out of the municipal land reserves.

Comments- Vachon group paid the $50,000 to get the rights to the Best Western name and franchise for the Crowsnest Pass for the next 24 months. Up until July 26 Vachon Group could with draw it’s application and get the $50,000 back. Municipal council agreed to pay Vachon group the $50,000 to keep the Best Western franchise and name available. Here’s the catch the municipality just used taxpayers dollars to pay for something it does not own. Vachon group owns those rights even though it’s our money that paid for them. New Investors will have to work with Vachon group if they wish to use the Best Western name. Our new EDO offered to go to conferences over the next three months in Calgary, Vancouver and Toronto to find Investors. Brian Gallant spoke about how important it is to support the $50,000 expenditure of taxpayers money to maintain the valuable Best Western name. (Councilors Saje and Saindon were opposed)

Crowsnest Centre Demolition:

Council today decided to re-tender the demolition of the old hospital and nursing home with the cost to be paid for by taking money out of the municipal land reserves and MSI grant funding.

Comments: There were three bids last year on this project Frank Bessinger told us today that the low bid was $577,000 (begs the question why was Medican given credit of $800,000 in there purchase agreement?). He does not know if bids will come in at the same level due to all the work in southern Alberta right now and timing may be an issue.

Note Thanks to my astute reader that sent me the following link to the Alberta Purchasing Connection site
http://vendor.purchasingconnection.ca/Opportunity.aspx?Guid=A13906BC-C7DD-4BA7-90FE-1DF691BDC23C&

Boy no messing around here it almost appears like this was all predetermined the meeting ended at 3pm the job was posted at 13 minutes past 3pm and closes at 3pm on July 30. Are we really going to find the best contractor and price in 7 days.

 Note: Cost of administration $4325 per day

July 16 G+P Meeting Crowsnest Pass

Group Vachon Hotel status review

Chris Vachon spoke to council regarding this issue made some very interesting comments and responses to Councilors questions:

-Investors that were previously lined up went to what they know best the condo market

-The Best Western brand and franchise was approved for the Pass under the Vachon group

-The cost to maintain the Best Western for two years will be $50,000, the way it came across to myself is Vachon put the money up six months ago. The municipality as a deadline of July 26 to make a decision on if they will pay the $50,000 to maintain the rights to Best Western. If they don’t I suspect Mr Vachon will get his $50k back from Best Western and the option to own those rights will disappear.

At this point Councilor Gail asked if there would be a problem finding Investors down the road especially with the MCNP already having the feasibility study done?

Mr Vachon told him that Best Western came in and did their own study and would probably have to update the study when new Investors show up. He also stated that new Investors showing up would be tied to what happens in the Coal/lumber markets locally.

Councilor Londsbury asked if Best Western sees this town has a viable option?

Mr Vachon gave a qualified yes based on once again what happens in the coal industry.

Councilor Saindon asked how can Medican pull out, didn’t we have an agreement, didn’t we honor our side of the agreement, thing’s get difficult they pull out?

Myron Thompson stated terms of the agreement were not met by Medican the contract became null and void.

Councilor Saindon asked what was the out clauses that Medican used?

Myron Thompson responded with “various clauses”.

Councilor Gallant said Best Western did not play games, independent studies said this location was viable, he asked how long Sparwood has been on Best Western books and is there a time limit on how long they will be on the books?

Mr Vachon stated that he did not know Sparwood was trying to get a Best Western until they filed the application for Blairmore. He also stated that Best Western watchs a location for signs of moving forward (foundations being put in place etc)

Councilor Mitchell asked if he had heard correctly that there is a deadline of July 26?

Mr Vachon said yes for the $50,000

Councilor Saje asked for an explanation of what the status of the present contract is?

Mr Vachon stated we will talk further later in the meeting (In Camera)

At this point the Mayor asked Mr Vachon to stick around until later in the meeting.

Topics of Discussion

Municipal Credit card policy presented to council most of them seemed to be excited due to a policy being put in place. Some thought there was no policy previously they should do a little research and read the previous policy on council remuneration. Credit card limits were increased from $1000 to $2000.

Economic Development and Tourism Advisory Committee terms of reference were presented to council everything appeared to be to council’s satisfaction

Municipal Disaster Relief Plan Task Force- the Mayor explained that he would be bringing forth a position at the council meeting to put in place a “Task Force” of experts, provincial agencies, local people with the historical perspective and members of council to look at ways of preventing future disasters.

Ranchland Annexation- The Mayor stated he would be proposing at the council meeting that this process begin in a formal fashion.

Alberta Transport right of way along Highway 3, concerned raised about the weeds along the highway 3. Mr Headrick informed council that Volker Stevin were made aware of the Municipalities displeasure especially in light of the fact that thousands of people would be coming to our community this weekend.

Streaming of council meeting- The Mayor stated that they have been working on this issue for many months and its time for it to be put in place. At this point Councilor Saje made the point that council had not even made a decision on if they were going to do this. The Mayor stated that he basically did not care what needed to be done between now and then but by August 20 council meeting will be streamed.     

After this council went In Camera for Land and Personnel issues.

CHECK OUT THE POLL ON THE PROMOTER SITE @ http://www.crowsnestpasspromoter.com/2013/07/12/proposed-hotel-on-hold

 Note: Cost of administration $4325 per day

Crowsnest Centre are we moving forward?

Tuesday night I went to the open house for the Crowsnest Centre site. Prior to the meeting I was asked by one of our residents that I have known for a long time. If I was surprised to see this happening, and if I wanted it to fail so it would be a black eye for this council.

To clarify that statement there are people that disagree with me on some sensitive political issues in this community, that are running around telling people that I have my own political agenda, that people need to keep that in mind when they read or hear my comments.

Well I’m going to shock you, yes I have my own agenda, some politicians call it a “vision” or “goals” etc. Any politician that tells you he does not have his own agenda or vision is either full of crap or should not be doing the job because who needs leaders without vision? Yes I am going to shock you even more I will be running for council this fall, it is just eight months away I think it is time for people to start stepping forward, speaking up and getting involved in the political process. Personally, I was never impressed with people that showed up for the first time in their life at a council meeting a month before the election, or the night before nomination day suddenly feeling the urge to save their community.  Now you still have time to learn about the process, see how council works and get a feel for the issues that are important to the community and it’s people and decide what your “vision” for this community will be.

To the Crowsnest Centre Site and the comments that have been directed at me. Was I surprised to see this happen?

No for six years I argued until I was blue in the face that this property was the most logical piece of land in the Crowsnest Pass for commercial development. Now some people fought against that with tremendous passion, to maintain what used to be on that site, I did not agree with them but after what has happened in this community over the last two years I understand a whole lot more about the issue of “passion”.  

What did we see Tuesday night? well it started with Bruce spending ten minutes patting himself, council and administration on the back for all the hard work they did to put this together. I am sure there was a lot of work involved and I give credit to them for that, but they should have sat in that council chamber 4-5 years ago if they wanted to see the real “work” that went in to this issue.

Then he introduced the people from Medican, the Architect, and Vachon group and turned the floor over to them. They all spoke well obviously educated people that have seized an opportunity in the Crowsnest Pass, nothing wrong with that.

What did they have to give us? When everybody walked in they were met by a large board with a picture of a nice hotel across from Summitt Home Hardware, a McDonalds and a Boston Pizza behind it. Green spaces, smaller businesses, a park that we the taxpayers will be paying for, and lot’s of large trees on the side facing Drain Brothers yard.

Exciting stuff, then Mr Day from Medican told us this is only a conceptional  diagram there is no guarantee that this is what the hotel will look like, or that these restaurants will be here, they were here tonight to get a feel about what the community wanted to see. He went on to talk about how they have to find all of these businesses, then he introduced the other people in the party who all gave a little information about their backgrounds.

When that was finished the different members of the groups went to separate tables and allowed the public to approach them with questions.

What do we have “today” for the Crowsnest Centre site? We have a group of businessmen that have signed a contract with the municipality (most details of which we will never know) that are going out to attempt to attract a hotel, with possibly some type of convention centre. Later it will be followed  up in phases with restaurants, and other smaller secondary businesses coming in. Do we have anything more solid that that right now? No.

Do I want this project to fail because it will be a black eye for this council and help my political “agenda”? Not a chance, this community needs commercial development we need tax base, we need employment.

I hope for the sake of this community that this is very successful. Myself and the other politicians past, present and future can decide later who takes the credit for this.       

Crowsnest Pass Hotel Update

In today's Crowsnest Pass Promoter is a little more information from Joni MacFarlane about the Hotel development with the financial implications included . From reading the story it appears now that the $300,000 cash we received a $100,000 is directed towards creating a green space next to the development so in all essence the Municipality is only receiving $200,000. At the end of the story is a poll for you to vote and how you feel about the deal.

http://www.crowsnestpasspromoter.com/2013/02/11/hotel-announced-for-crowsnest

Hotel announced for Crowsnest

Joni MacFarlane

Monday, February 11, 2013 5:24:14 MST PM

A 50-75-room hotel, located at the former site of the Crowsnest Centre, was announced last week.

Medican, a Medicine Hat-based construction company and Group Vachon, a Calgary-based hotel management company, signed an agreement with the municipality to build a development that is to include a pool, hot tub, breakfast area and meeting spaces. The project will be accompanied by a complementing restaurant and sports bar as well as a green space with amenities such as a dog run and playground area.

The development group said their vision for the project is to “create a signature hotel and commercial area that will allow tourists to enjoy the numerous outdoor activities available within the Crowsnest Pass and also to create the primary rest area location between Lethbridge and Fernie”.

Medican has been in business since 1974 with a primary focus on development and construction of seniors’ residential communities and retail commercial development.

Group Vachon is a Calgary-based company with over 22 years experience in the hotel industry, building and managing properties including international brands as well as independent hotels across North America.

Details from a public open house on Feb. 12 were not available as at press time.

After the announcement was made, The Promoter spoke with Chief Administrative Officer Myron Thompson to discuss the financial details and implications for the municipality.

Thompson said the purchase price was $1.1M that includes $300,000 cash and total responsibility for the demolition and clearing of the site.

The municipality had looked at doing the demolition themselves, he explained, but it was included in the proposal from the construction company.

“We said, well fine, because that takes that risk and liability from us,” he said. “If we had to spend that $800,000 on the demolition and then get $1.1M, it’s all the same.”

Thompson said they discussed the offer with an appraisal company who said it was “very close to being at market value”. The value had decreased slightly from July 2010 when it had been appraised at $1.4M, he said.

“There was talk about giving the land away for nothing so I think it’s a good deal,” he added. “Because what it does, it develops an entire parcel of land.”

The purchase price of $300,000 is held in trust, Thompson said, and the developer will get title to the land. If they don’t meet the requirements set out in the agreement, there is a certain time period that the municipality can take the land back.

The demolition is to be completed by late summer, the foundation is to be in by late fall, and the development has to be completed within two years from the date the agreement was signed, said Thompson.

He added that Medican and Group Vachon have been working with a hotel developer and the name of this hotel will be announced within the next month.

Lethbridge architect Alvin Fritz is developing a design for the hotel.

A stand-alone restaurant will be built on the site by Medican, he added, and another restaurant will be located inside the hotel.

A separate company has been contracted to do the demolition work, but Medican is unable to confirm their name until the agreement is signed.

As part of the agreement, one-third of the funds from the sale - $100,000 – will go towards development of a green space on the northeast corner of the site, said Thompson.

This land is owned by the province and will be leased to the municipality for Medican to develop a tourist/rest stop with picnic tables, playground, dog run and other amenities.

The balance of the funds $200,000 – will go into land reserves, Thompson said.

There are many steps to be taken before demolition and construction get underway, he said, such as rezoning of the land and development agreements and permits.

“We had 82 changes in the agreement. Eighty-two,” Thompson emphasized. “I don’t think people realize the amount of work that we went through… to protect the community so we didn’t end up with another River Run… I know the concerns and it’s a balancing act not to scare these guys away but yet protect ourselves and I think we’ve got a really good deal.”

Crowsnest Centre Sale

Well tonight at Council the CAO informed all that attended that the Centre deal is in place.
The municipality shall receive $1.1 million $300,000 in cash and the rest will be covered by the demolition.
Demolition will be complete by late summer (Oct 21), foundation will be in place by late fall and completion of the hotel within 24 months.
He also informed us that the Vachon Group will be announcing the name of the hotel within 30 days.