The Debt collectors

distraint
noun

The seizure and holding of property as security for payment of a debt or satisfaction of a claim; "Originally distress was a landlord's remedy against a tenant for unpaid rents or property damage but now the landlord is given a landlord's lien" [syn: distress] Wordnet 3.0 Princeton University

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The Deadline has long passed, the ghosts of pulp and paper workers still roam the lines of the Watson Island mill, and not a dollar in tax revenue has been provided to the city of Prince Rupert since Skeena closed its doors.

So, with a bold declaration of “We don’t want taxpayers stuck on the hook for taxes again”, the city began the process of trying to recoup some of the lost monies that have dissipated into the wind since the New Skeena Forest Products era came to a close.

Sun Wave Forest Products the latest owner of the moribund pulp and paper mill on Watson Island missed the January 1, 2008 deadline to be producing pulp and paying taxes. Since then, with the exception of leasing out some warehouse space to the Coast Tsimshian for log stuffing operations and to Quickload Terminals for a container inspection station, there hasn’t been a lot of activity at Watson Island.

With that long anticipated deadline having now passed, Sun Wave now owes taxes for half of 2006 and all of 2007.

With that in mind the city has put a distraint order on the property and assets owned by Sun Wave at Watson Island, which would prevent the Chinese Government owned company from selling off the assets without having a discussion with the city.

As the city collects taxes on behalf of the province, regional district, hospital and school districts, (and owes tax revenues to all those levels of government) they now find themselves in the role of debt collectors, looking to convince the recalcitrant owners to pay up, or, or, well who really knows from here.

Perhaps the city is counting on this new year of the Rat to be one in which old debts are paid off and old ventures are started anew, well one can always hope we suppose.

The Daily News featured details of the city’s latest moves as part of a front page story in Tuesday’s paper.

CITY MOVES TO MAKE SURE IT CAN GET TAXES OWED BY MILL

By Leanne Ritchie
The Daily News
Tuesday, February 12, 2008
Pages one and two

The City of Prince Rupert has placed an order on the remaining assets of the Watson Island pulp mill to ensure it gets its taxes from the mill's owner if the facility is stripped in a sale.

In a letter to the Skeena Queen Charlotte Regional District, Prince Rupert Mayor Herb Pond said the city has put a "distraint order on the Sun Wave property and assets on Watson Island in an attempt to ensure we will be in a position to pay the non municipal agencies their taxes and also collect the municipal portions."

The city collects taxes on the property not only for itself, but also on behalf of the province, regional district, hospital district and school district.

“We have written them (the above agencies) informing them we have not yet been paid and we were doing all within our power to collect,” said Pond.

The city signed an agreement with Sun Wave Forest Products in 2006 to forego the municipal portion of those taxes, provided the company was producing pulp by Jan. 1, 2008.

Sun Wave did not meet those conditions and now owes taxes from half of 2006 and all of 2007, said the city.

Taxes on the property have ranged up to $2 million in the past.

In addition, Sun Wave also did not pay the non-municipal portion of its taxes for 2006 and 2007 to the city, leaving the city in the position of owing funds to other levels of government which it has not collected.

“It is now evident that there will be no pulp production prior to the deadline and Sun Wave will become liable for the 2006 and 2007 municipal portion as well as the non municipal portions,” said Pond in the letter.

A distraint order is an order that prevents Sun Wave from selling off assets with having a discussion with the city,” said Pond.

The idea being, if there is a sale of assets, we would want the proceeds of that to go to paying off their debt to various levels of government. We don’t want the taxpayer stuck on the hook for taxes again,” he said.

Sun Wave Forest Products purchased the mill in 2006 following the bankruptcy and sale of all the assets of New Skeena Forest Products. It is owned by the China Paper Group, a company that operates half a dozen or so pulp and paper mills in eastern China and that is 80 per cent owned by the Chinese Central Government.

While the company is not producing pulp, it has leased out part of the Watson Island facility to Quickload Container Examination Facility, the bonded warehouse operator that provides transportation and services to the Canadian Border Service Agency to assist with securing containers moving through the Fairview Terminal.

In addition, the company has leased space to the Coast Tsimshian to operate a raw log stuffing facility.

The city has already had to eat some $11 million in taxes it spent but never received from former mill owners- including New Skeena Forest Products and the provincial government.

Pulp mill warehouse to find use by container port

There will finally be some employment taking place at the Watson island pulp mill, though it will have nothing to do with the production of pulp and paper.

While the China Paper group continues along its glacial pace to doing something with its investment, they’ll at least be making some rent as Canadian Border Services and Quickload Terminals sets up shop in the warehouse and administration buildings on Watson Island, as they wait for their own warehouse to be built on site at Fairview.

It’s expected that they’ll be on Watson Island until at least June of 2008, which one would gather (and certainly won’t be a surprise to Rupertities) means there are apparently no plans in place to be producing pulp at the mill any time in the near future.

The Daily News had full details on the new use for the pulp warehouse in Thursday’s paper.

CONTAINER SEARCHES TO TAKE PLACE AT PULP MILL
By Kris Schumacher
The Daily News
Friday, August 10, 2007

With the Fairview Container Terminal prepared to begin operations in October, the temporary inspection facility for incoming containers will be a portion of the old pulp mill on Watson Island.
While the permanent bonded warehouse on Ridley Island is constructed in hopes of becoming operational by the summer of 2008, the Prince Rupert Port Authority has announced that the alternate facility has been secured for the Canadian Border Services Agency (CBSA) and Quickload Terminals to operate in the meantime.

"What's happened is, from the time Quickload won the contract to provide the container examination facility service up until they looked at what the needs were, demand actually increased beyond what they initially thought it was going to be," said Barry Bartlett, communications manager at the Prince Rupert Port Authority.

"What that meant was they were going to need to build a bigger facility. So what's happened is they've acquired the use of the administration building and warehousing facilities at the Watson Island facility, that they can use basically until they're finished the new building."

This decision was the outcome of negotiations between Quickload Terminals and the China Paper Group, the Chinese-state owned company, that purchased the facilities from New Skeena Forest Products when it declared bankruptcy in 2006.

"We're excited, and the whole community is excited because it's something you can really touch now," said Mark Schepp, general manager of operations for Maher Terminals in Prince Rupert.
"Later this month you'll see the cranes arrive, which I think will be a big event, and as we move towards an October start-up we're getting more excited and ready to go as we build our team here."

While having the permanent facility on Ridley Island ready for October would have been the ideal situation, Maher Terminals is confident that things will be running smoothly until such time as the new facility is ready.

"We're going to work with CBSA, and they'll let us know what boxes have to go there and we'll have to make them available for Quickload to get them there," said Schepp.

"We would load them onto a truck and have them transported to the facility, and once they're examined they would return to the terminal."

"We are certainly involved with the folks there about coordinating the operation of putting in the place the procedures for the movement of containers from the marine terminal and their facility," said Frans van Riemsdyk, vice president of sales and marketing at Maher Terminals.
The Prince Rupert Port Authority is also optimistic about the quality of the Watson Island facility, and that it will more than suffice for the purposes of the CBSA and Quickload.

"In fact the warehouse and administration building out there are beyond what their needs are, so it's a very good interim facility. They'll have the newer, bigger and better container examination facility completed by June 2008," said Bartlett.

"It's worked out well, and we think that there's not even going to be any short-term inconvenience because the quality of these interim facilities, so it's business as usual."

The Watson Island Pulp Mill used to employ up to 500 workers and was part of a forestry company that provided direct and indirect employment to thousands of people in the northwest.
The China Paper Group said it has been seeking funding to operate the pulp mill and has an agreement with the city to operate the mill in exchange for a deal under which it pays no tax for the first five years of operation. That deal is void should the mill not start by Jan. 1, 2008.