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Wednesday, October 10, 2018

City To Address Concerns Over CP Station

Owen Sound | by Matt Hermiz  

City Manager to address public concern over details of the lease of the old rail station.

Owen Sound's city manager will hold a press conference today to address concerns raised in the community regarding details of the lease of the CP Station.

This comes after recent reports raised conflict of interest concerns involving a city councilor and senior city staff member in regards to the ownership of Mudtown Station, which leases the CP Station from the city to operate a restaurant.

Bayshore Broadcasting News has not yet independently vetted those reports.

Bayshore Broadcasting News reached out to the city's Integrity Commissioner, Principles Integrity, to learn if any formal complaints had been filed relating to the CP Station property, but the firm could not provide any information.

City Manager Wayne Ritchie says at today's press conference he will speak to the process the city undertook in leasing the property and outline strategic goals of council with the east harbour heritage site.

According to past reports to council, the city purchased the CP Train Station in 2010 for $150,000 with the goal to find a tenant and lease the building as a catalyst to waterfront re-development.

The city began several capital upgrades to the building upon purchase as it had been left to deteriorate for several years.

An RFP was issued in 2014 by the city and received two responses.

The city pursued and structured a lease deal with Dr. Greg Zoldy, who ended up walking away from a proposed 20-year agreement in 2016.

The city then posted another RFP for the lease of the CP Station and in April 2017 council approved a 15-year agreement with Mudtown Station to operate a brew-pub.

Director of Corporate Services Kate Allan says the lease agreement the city signed with Mudtown Station in 2017 is a 15-year deal with two options for five-year extensions.

The agreement provides the city with annual lease revenue starting at $29,325 that increases by one per cent each year throughout the term.

This is more than $9,000 higher than the net base rate the city would have received in the lease deal with Dr. Zoldy.

To date, Allan says the city has spent $577,000 on improvements to the CP Station property, but the total cost is not finalized as it still has to be debentured.

The agreement with Mudtown Station included a $1.3-million commitment by the city and Mudtown to invest in the property, with the city providing $615,000 for building renovations, water and sewer infrastructure and the construction of a parking lot and patio.

A 2017 staff report estimated the city's deficit on the investments after 20 years would be $161,000 using lease revenue alone.

Allan notes the city will also take in property tax revenue paid by Mudtown Station, but the amount is still to be determined as MPAC has yet to complete its assessment.

Anyone is welcome to attend Ritchie's address at 1 p.m. this afternoon at the Temporary City Hall location at the Professional Centre.

Bayshore Broadcasting News will stream the press conference live through our Facebook page.


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