Tuesday, January 26, 2010

Podunk Below the Masthead, (Tuesday, January 26, 2010)

More pulp mill mystery, Universal Citizens receive their due and Nathan Cullen keeps the pressure on over black liquor payments, some of the items in the news for Tuesday.

Daily News, front page, headline story
PURCHASE OF WATSON ISLAND: QUESTIONS AND SOME ANSWERS -- Back a week ago on the blog we offered up a few points to ponder about the state of the Watson Island bidding process, things such as why it seemed to be taking so long and how come we couldn't at least know the names of the bidding parties among them. Tuesday's Daily News offers up some interesting developments on that file, with an article that outlines a few of the potential owners and outlines how the city has seemingly given one of the bidders a brush off without much in the way of explanation.

Identified as would be owners of the old pulp mill site are Lax Kw'alaams, Quickload Terminals, Sun Wave the former owner of the site and Greenfield Clean Energy, the last two bidders are still in the mystery category. Of the four identified bidders by the paper, Greenfield and Sun Wave received thanks but no thanks letters from the city, a not surprising development for Sun Wave we suspect but one which seems a bit strange for Greenfield which is puzzled about what was wrong with their bid.

The Mayor confirmed for the paper part of the process involved in the bidding, a process that means city council would only see those bids that were forwarded to it by their staff members, with CFO Dan Rodin and City Manager Gord Howie acting as filters for the bidding process.

As a second story on the issue and as part of the research on the front page story, Monica Lamb Yorski interviewed Mayor Jack Mussallem on page three. The Mayor providing as many I can't answer that question replies, as he did any form of detailed response to her queries on the issue. Explaining that he doesn't believe that a week to week update would be something to expect.

The Mayor didn't particularly provide much in the way of detail for locals, but did seem to symbolize and highlight the rather secretive nature that these talks and negotiations have taken on. For those that didn't purchase the Daily News on Tuesday, the website should be updated on Wednesday's with the two articles from George T. Baker and Monica Lamb-Yorski, some interesting reading for all Rupertites one would think.

A trio of local students have been named the recipients of the 2009 Universal Citizenship Awards, with a presentation taking place on Monday evening at City Council. Acknowledged for their efforts in 2009 were Eimear Tighe, Luke Robin and Sarah Robin.

High School basketball was reviewed in the Tuesday edition, with recaps of tournament action at PRSS, Charles Hays and Terrace.

(Archive for Daily News Articles for January 26, 2010,)

The Northern View
No new items posted to their website for Tuesday

Cullen Demands Urgent Meeting on Eurocan Situation -- With the closure of the Eurocan pulp mill looming at the end of the month, Nathan Cullen, the NDP MP for Skeena Bulkley Valley continues on with his push to repatriate the black liquor credits issued to West Fraser, calling for the 33 million dollars to be held for any new buyer or used by the community from which it came (see article here)

CFTK TV 7 News
Terrace Development Reliant on Power Line -- The Terrace Economic Development Authority outlines the case for the Northern Transmission Line suggesting that any future growth in the region will come from the electrification project in the area (see article here)

CBC News Northern British Columbia, Daybreak North
More delays in the return of on line content for the Daybreak North website, as the CBC's technical woes appear to be continuing. The CBC has revised their start up date for the new service, advising that the site will launch "shortly".

Daily News, front page, headline story
Purchase of Watson Island: Questions and some answers
by George T. Baker and Monica Lamb-Yorski
The Daily News
Tuesday, January 26, 2010

Shortly after the Dec. 15 deadline for submitting purchase proposals, Mayor Jack Mussallem announced that Watson Island had six bidders.

He needed to withhold the names on those bids, he said, due to obligations of confidentiality.

It came as no surprise to most when Lax Kw’alaams soon stepped forward, along with their investor, to declare themselves in the running. They gave a brief outline of some of their potential plans for the site, including refurbishing the onsite ‘cogen’ and possibly aquaculture and warehousing.

A second proponent, Greenfield Clean Energy, was about to make their debut in the community with an introductory outline of their own plans for the property through an interview with the Daily News.

According to a spokesman from Greenfield, these included forward-thinking strategies that would not only result in an environmentally clean bill of health for the site, but also establish an ecologically friendly industrial park. They said they offered proprietary technologies that had the potential, among other things, to solve Prince Rupert’s growing landfill problem and generate 250 plus permanent jobs on Watson Island.

That introductory opportunity was lost, however, after Greenfield received an unexpected phone call from City Financial Officer Dan Rodin, followed by a letter on Jan. 13. The short letter informed Greenfield that “The City of Prince Rupert” was declining their proposal because it “did not meet the proposal requirements”.

According to Greenfield, neither the phone call nor the letter gave any explanation of why – after almost a month - the requirements were no longer met in the City’s eyes. The letter was signed by Dan Rodin with no CCs to any other party. Up until this time, Greenfield believed that all prerequisites for the proposal were met and was preparing for the anticipated presentation before Council - whenever that might occur, and presumed to be given along with the other five bidders.

Greenfield had requested an audience to present to Council in person several times, but had received no firm response to this.

Apparently, Greenfield is not alone in their surprised oust from the running.

According to two separate sources, Sunwave Forest Products, the former owner of the mill site, was a third bidder. This is a curiosity in itself. However, no more information is available than that. Sources say that Sunwave received the same letter and that the representative has now returned to China.

A third bidder has been named as a recipient of this same letter, but confirmation of this is not available as yet.

A fourth bidder is Quickload, which currently operates an easy-load container facility on Watson Island.

Manager Kristina Csondes confirmed, last Thursday, that Quickload has put in a proposal, but did not reveal any details. She also said that they had not received word on whether they have been accepted or rejected.

That leaves the two mystery bidders. Although many conflicting rumours are floating around town concerning who these two may be, The Daily News has not received enough substantiating information to name anyone.

At this juncture the question becomes not so much who the bidders are – but how the winning bid is being determined.

According to Mussallem, in an interview with the Daily News last December, the proposals would be “reviewed by City staff and their recommendations brought before Council”. This left everyone we have spoken to – including Greenfield and members associated with the City – “under the impression” that City Council would have final say on which of the six proposals will ultimately be accepted – but no one seemed to know for certain.

Mussallem confirmed on Friday that City Council would only see presentations that were recommended by staff members in charge of the file, which are Chief Financial Officer Dan Rodin and City Manager Gord Howie. The filters would be Rodin and Howie, with council only seeing the bids they deemed to fit the criteria.

This means Council will not be given final say on all six proposals, but would instead be presented with less proposals from which to choose.

Mussallem also said, in a previous interview with Daily News, that the sale of Watson Island constitutes a straightforward land sale, not a “show and tell”, and the winning bid would be based on the purchase price.

Local Gord Misener said that he understood there was a limit to what politicians can tell the public during the negotiations, but he still wanted to know more than was presented so far.

“We keep hearing there are interested parties, but interested in what? Who, what, where, when and how?” he asked. “It’s wrong that council won’t get to hear all the bids. They should look at them all. And there should be a timeline set to sell the property.”

In between sips of his coffee, Misener assessed the amount of information he’s received.

“It’s been vague,” he added. “The information Jack Mussallem has provided we could get from a coffee shop.”

Sitting across the table from Misener, Mike Allen felt that the city council had done a fairly good job because of the political limitations associated with a deal that big.

“It’s hard to say, but I don’t know what else they could do. But I am the other way [than Misener]. The city staff should be trusted to recommend to council what the bids should be presented. That’s what they are paid for.”

Interview with the Mayor

Daily News reporter Monica Lamb-Yorski in conversation with Mayor Jack Mussallem regarding the process for selling Watson Island:

Daily News: There are lots of concerns in the community about the process for selling Watson Island.

Mussallem: What kinds of concerns?

Daily News: One group has received a letter that their proposal was rejected and they were concerned because they didn’t even get to talk about their proposal or make a presentation. Has the council looked at any of the proposals?

Mussallem: I can’t give you details, but the council is aware of what is going on.

Daily News: Originally you said staff would look at the proposals and make recommendations to council, right?

Mussallem: That’s right.

Daily News: Council will have to vote on the proposals? They won’t look at all of them I guess. They’ll be looking at a short list?

Mussallem: Council is aware of each proposal but obviously some proposals meet the criteria and some don’t. If the council decides, we will look at one or two proposals over the others.

Daily News: Have they seen all six

Mussallem: They are aware of all the proposals.

Daily News: Who are the staff members that are looking at the proposals? One person or more than one?

Mussallem: The executive staff is.

Daily News: Do they have legal or technical advisors with whom they consult?

Mussallem: Certainly. Because we got Watson Island for nonpayment of taxes, the city made a decision to advertise the property for sale.

The city’s decision wasn’t to hold on to it and lease it out, it wasn’t to develop it, the city’s decision wasn’t to find somebody to run a pulp mill or to find somebody to run break bulk, stuff containers, run a rail maintenance yard or develop the property, the city’s decision was to sell it and the city advertised it for sale and people were asked if you’re interested in buying it and you would like to submit a proposal please do. The proposals were to purchase to the property for a stated price and the upset price was $13 million dollars.

Daily News: But the advertisement did ask for a development plan so that was part of the proposal?

Mussallem: The advertisement did express interest in who would like to purchase the property and what they would like to do with it.

Daily News: Council has met about the mill. They’ve seen the proposals and they’ve seen all of them?

Mussallem: I can’t use specifics but I can tell you council is aware of the process for divesture of the property and senior staff are working on that. And of course we told the public that we received six proposals. Council’s aware of those proposals. And it’s hard because it’s a big topic. It’s significant to the city and it’s a significant monthly cost. But we can’t give you a week-to-week update on it.

We need to get something conclusive going on this thing and believe me staff is working on this thing and stepping up the process as quickly as possible because there are some on going subject-tos. There is some stuff still owned by the previous owner.

Daily News: Are the chemicals all owned by SunWave?

Mussallem: Yes and some have been removed.

Daily News: If somebody bought the property would they have to remove the chemicals and is there a time limit if someone bought the property that they could say I’ll buy it but you have to have the chemicals out there in 30 days?

Mussallem: Yes there is. The previous owner has to deal with it.

Daily News: Have you any idea of how much is still there? How many gallons?

Mussallem: Yes I do and I have an idea of the time frames and stuff, but those are details I can’t share with you.

Daily News: But you do know that because that’s important?

Mussallem: I’m aware. I go out there. I don’t know if the rest of council does, but I go out there. When we’re looking at stuff for the city I go out there. I wouldn’t be able to talk about it if I didn’t. The last time I was out there was last Sunday. I’m actually in the mill, through the gates, through the railway and out to the dock.
We’ve got parties interested, but you have to do it in an established process because if you start getting cue jumpers or other considerations when you are talking to any particular party and things go awry it could be subject to a legal challenge and we don’t need that.

So we’ve got parties interested and we’re working through that process in a logical way and being aware of legal aspects in regards to procedure. And at the same time we’re aware of the monthly maintenance costs anywhere between $75,000 to $100,000 and of course $100,000 represents a one percent tax increase in the city’s budget.

Daily News: So it didn’t take long to make the decision to try and sell the pulp mill?

Mussallem: No it didn’t. If the municipality had more money then perhaps there were some other options we could have considered. We are so concerned with money here. We have lost over 30 million in the last 10 years out there. Money is the greatest concern.

Look at Terrace, six percent increase last year, six percent increase this year. People here can’t afford that. Yet we want to encourage people to support the community, encourage volunteer groups. We want to keep the city at any reasonable level of service.

Service to residents in some areas has dropped down. We want to do everything to keep it at a reasonable level. There isn’t an elected official in this city that doesn’t live with this indebtedness. It’s like a monkey on your shoulder.

Every group that’s come before us asking for money, whether it’s the Growing Space, the museum, Special Events, they all give so much. It’s pretty tough and very challenging times.

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