Arbutus Corridor worth $400M: CP Rail CEO E. Hunter Harrison
Company vows to run trains again if City of Vancouver doesn't buy the land at 'fair value'
CP Rail has fired another shot in the public relations battle against the City of Vancouver over the future of the Arbutus Corridor — arguing the land is worth well over $400 million.
In a full-page newspaper ad that was published Monday, the rail company says the City of Vancouver has come nowhere close to offering a much lower, acceptable price for the land.
"Based on independent third-party appraisals using the value of adjoining lands – the standard method for assessing this type of rail corridor – the Arbutus corridor has been valued at more than $400 million," CP Rail CEO E. Hunter Harrison said in his open letter.
"As this was done a number of years ago. The value is significantly higher today," said Harrison.
"Recognizing the importance of this property to the citizens of Vancouver, CP has been prepared to accept far less in order to reach an agreement. The City of Vancouver has, in turn, offered only a fraction of that discounted price."
Harrison reiterated what CP Rail said earlier this summer: it must get fair value for the land, or it must get value from the line by putting it to use.
Negotiations with the City of Vancouver to purchase the West Side spur line stalled earlier this year, leading CP Rail to begin clearing community gardens as a first step to re-activating the line.
- MORE | Community gardens ripped up along Arbutus corridor
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The battle with the City of Vancouver began not long after CP Rail ran the last train on the line, just over 14 years ago.
Even before 1999, when the Arbutus Corridor rail operations came to a halt, the City of Vancouver had enacted a bylaw designating the right-of-way as a greenway and a car-free transportation corridor.
After the trains stopped, the city envisioned creating a streetcar line or cycle paths along the 11-kilometre strip of land, which stretches from First Avenue to Southwest Marine Drive.
CP Rail, which has owned the right-of-way for 120 years, saw the property — which is wide enough for single or double lots — as having the potential for a mix of commercial and residential development.
In a 2006 Supreme Court of Canada decision, the city won the right to have the final say on development along the Arbutus Corridor.
The court rejected a CP plan to develop the corridor for commercial and residential use. In the meantime, the railway company still has the legal right to run trains on the line.
City of Vancouver Coun. Heather Deal said she was disappointed with a number of things that were said in CP Rail's newspaper ad.
Deal said one of the problems with the CEO's message was the $400-million valuation of the rail corridor, based on the value of adjacent residential zoning — zoning that doesn't apply to the rail line.
"The city will not be bullied into paying more for land than it's valued at at its current zoning — zoning that the city has the right to impose and, in fact, has been upheld by the Supreme Court of Canada."
Deal said the city stands by its placing value of the corridor based on the best use of the land, not on the value of what's next to it.
"Multiple mayors of multiple political stripes and multiple city councils have said 'This is a greenway. It is a transportation corridor of importance to the entire city of Vancouver,'" she said.
"The value of that land is as a transportation corridor and that's the value that we're willing to offer."
CP Rail's open letter, as published in various newspapers Sept. 22, 2014:
Clarity and context on CP’s discussions with the City of Vancouver over the Arbutus Corridor
Much has been written and reported in recent weeks on the future of the Arbutus corridor, an 11 km rail line owned by CP that runs from False Creek to the Fraser River in Vancouver, and is the subject of ongoing discussions between CP and the city.
Many of those reports have been contradictory, and, at times, inflammatory. I would like to provide the context and clarity necessary for residents, and all stakeholders, to fully understand the issue.
The corridor, zoned by the city expressly for transportation, is the property of CP and has fallen into disuse over the past decade as the company and the City of Vancouver have sought to come to an agreement for its sale or disposition. During that time, CP has put forth a variety of proposals, some of which would involve no cost to the citizens of Vancouver, including a plan that would see small portions of the corridor rezoned for development by CP with the remainder donated to the city for the recreation and enjoyment of its citizens.
This proposal was part of a Visioning Process undertaken in 2006 with the direct involvement – and endorsement – of community groups that represent the residents along the corridor.
A land swap was another option tabled by CP, which would see a number of parcels of unused City land traded for the corridor.
These proposals, and others, have been rejected.
At the heart of the issue is the value of the corridor. Based on independent third-party appraisals using the value of adjoining lands – the standard method for assessing this type of rail corridor – the Arbutus corridor has been valued at more than $400 million. As this was done a number of years ago, the value is significantly higher today. Recognizing the importance of this property to the citizens of Vancouver, CP has been prepared to accept far less in order to reach an agreement. The City of Vancouver has, in turn, offered only a fraction of that discounted price.
We were disappointed last week to be asked back to the table only to find the city not prepared to move reasonably on its position. We fear that due to internal city politics, the council is not able to reach a fair and equitable settlement. CP management has a responsibility to its shareholders to generate a return on its assets. Simply put, we must get fair value for our property or put it to use.
The new CP is not a company that will let this corridor lay dormant while discussions with the city drag on for another decade. If there is no agreement we will use it for rail operations, and expect to have the rail line up to operating standards later this fall.
Contrary to many reports, CP has been and continues to be flexible in its approach. The company stands ready to sell this asset, but at a fair price, or to find a creative solution that satisfies all stakeholders at no cost to the citizens of Vancouver.
E. Hunter Harrison
Chief Executive Officer
With files from the CBC's Stephen Smart