by Brennan Clarke, Globe and Mail
Bear Mountain Resort’s deepening financial woes have landed a developer-funded interchange on the Trans-Canada Highway in a permanent state of limbo, leaving Langford taxpayers with a $9.75-million debt and a half-finished “bridge to nowhere,” critics of the controversial project say.
“At this point I have to question whether any of these developers have any money to pay anybody,” said Langford resident Cheryl McLachlan, who helped organize an unofficial petition drive against the interchange two years ago.
“We had a large portion, over 10 per cent of citizens telling [Langford]) council they were concerned this could happen, and now here we are.”
Bear Mountain, which is under court-order creditor protection, was supposed to contribute $4.8-million to the initial phase of the $30-million project, with four other landowners slated to kick in an additional $5-million, according to an agreement with the municipality.
Langford borrowed the money on their behalf and signed a complex agreement requiring the developers to make their contributions by March 2, 2009.
But the housing market cooled off, the payments never materialized and construction has been stalled for months as bankruptcy looms over the project’s largest contributor.
“Things pretty much shut down well over a year ago,” said Ron Rayner, who lives near the half-completed project.
“With the receivership and possible bankruptcy of Bear Mountain, who knows how long it will stay that way? It’s a real eyesore.”
However, Langford Mayor Stew Young said even if Bear Mountain’s assets end up changing hands, the municipality will be repaid eventually because the loan payments are linked to property taxes on future development.
“Whoever buys the property, they still owe us the money because it’s charged on the property,” Mr. Young said. “That’s the protection we have.”
So far, Mr. Young said Langford has spent about $8-million on the interchange, just enough to complete the main bridge structure across the highway and lay the crushed rock foundation for the on- and off-ramps.
While Langford’s private partners have yet to make any payments on the principal, they have agreed to pay the interest on the loan while the project is in limbo.
This year, the bill came to $98,000, split between Bear Mountain, Totangi Properties, Goldstream Heights Properties, Bear Mountain Parkway Estates and reclusive Victoria property owner Clara Kramer.
“The interest is so low they’re not going to be fighting us on it,” Mr. Young said. “I’m just working with everybody and hoping that the recession turns around.”
When the economy picks up, there will be plenty of revenue from new development to cover the interchange costs, he said.
The province has agreed to cover $4.5-million, most of which is payable only on completion of the project.
The interchange was triggered by the need for a second access road to and from Bear Mountain, which is now home to several thousand residents, and plans for another 2,800 houses on nearby Skirt Mountain.
Two years ago when Langford was preparing to start work on the project, RCMP were called in to remove a group of tree-sitting demonstrators from a forested swath of Crown land on the southern approach to the new overpass.
Protesters marked the start of construction with demonstrations along the highway and disrupted council meetings as the project moved through various approvals in 2009.
B.C.’s Municipal Finance Authority, which provides low lending rates to municipalities building major projects, rebuffed Langford’s application for a $25-million loan, forcing council to scale down the initial building phase and seek private-sector financing.
Last month, a group called the Vancouver Island Community Forest Action Network, led by interchange protester Zoe Blunt, launched a court challenge arguing that Mr. Young “abused the public process” during a public hearing last year on the Skirt Mountain development.
Ms. Blunt, whose real name is Tracie Park, said the structure of the interchange deal, coupled with the recession, has left Langford with a “chicken-and-egg” dilemma.
“These guys need to sell condos so they can build their road, but they have to build their road before they can sell any condos,” she said.