Saanich could end up paying $2 million in interest for a $4 million loan to help purchase surplus land from BC Hydro at the

Saanich could pay $2M in interest for a $4M loan for land purchase

Saanich to approve borrowing next week, but has some financial wiggle room

A conditional purchase of land could end up costing Saanich just over $2 million dollars in interest for a $4 million dollar loan towards that land purchase.

Valla Tinney, Saanich’s director of finance, told the public that the municipality could pay about $2 million dollars in interest for a $4-million loan over its duration of 30 years.

RELATED: Saanich in agreement to purchase Kings Road land for $5.5 million

The public heard this figure following a question from Coun. Judy Brownoff as council was preparing to read a temporary borrowing bylaw three times.

The money would help the municipality purchase a 2.2-hectare parcel of land between Kings Road and Haultain Street that BC Hydro deems surplus. Saanich last week announced that it had reached a conditional agreement with the Crown agency to pay $5.5 million for the land. Saanich plans to cover the outstanding balance by tapping into its reserve fund.

Saanich officials, starting with Mayor Fred Haynes, identified purchase of the land as priority as a community group has lobbied Saanich to purchase the land for the purpose of turning into a park. While Saanich has not yet announced plans for the property, last week’s purchase option opens the path to that outcome.

This said, it also announced plans to sell portions of the land, if it cannot raise $2.75 million in funding from other sources, including other local governments, community associations and organizations and residents.

RELATED: Saanich community group welcomes purchase of Kings Park lands

This proviso in the pending purchase of the land could end up changing Saanich’s future interest obligations.

Pending approval of the borrowing bylaw, Saanich has some flexibility, said Tinney in response to a question from Coun. Karen Harper, who wondered whether Saanich could pay the debt off early.

“What we are doing is entering into temporary borrowing while the fund-raising portion of this project goes forward,” she said. “Once we know exactly how much [money] needs to be borrowed, we would be locked in for long-term borrowing at that time. So we have five years from when this bylaw, if it is passed, to bring on long-term debt. So there is some time to figure this out.”

Saanich scheduled final reading of the borrowing bylaw for next week. That is also when it could confirm the transfer of $1.5 million towards the project.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sidney cadet takes home gold at South Island Zone biathlon

‘Rising star’ sets her sights on provincials

Future space homes could be made of mushrooms

NASA explores use of fungi to build structures in space

All Carlton Cards stores closing in the coming weeks

Schurman Retail Group stores across North America will close, including 79 in Canada

Meet Arthur Heart, Oak Bay Avenue’s resident stickman

Contest winner dubs stickman Art Heart

Four things ‘not’ to do if you run into Prince Harry and Meghan in B.C.

Here is a list of some things you definitely should NOT do, according to the BBC

Greater Victoria Crime Stoppers wanted list for the week of Jan. 21

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

B.C. RCMP spent roughly $750K on massive manhunt for Port Alberni men

Manitoba RCMP helped with 17-day search through the province’s northern terrain

Island Bakery in Cobble Hill to close

Cobble Hill store in business since 1982

Man killed by police in Lytton called 911, asking to be shot: RCMP

Howard Schantz, also known as Barry Schantz was killed following a standoff at his Lytton home

Canadian public health agencies ramping up preparations in response to new virus

Health officials have said there are no confirmed cases of the emerging coronavirus in Canada

‘Naughty boy’: Monty Python star Terry Jones dies at 77

The comedian has been suffering from a rare form of dementia

Most Read