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New jobs, tax revenue may spring from mill sale

Harold Jahn - Kristen Douglas/The Mirror
Harold Jahn
— image credit: Kristen Douglas/The Mirror

Harold Jahn got a good deal on the former Elk Falls mill property and now the city is hoping to get a better tax return from the industrial lands.

“If this proceeds and development occurs, it will be very significant for the citizens of Campbell River,” said city manager Andy Laidlaw.

Jahn, owner of Pacifica Deep Sea Terminals, signed an agreement last week with Catalyst Paper to buy the 400-acre property for $8.6 million. According to BC Assessment, the property is currently valued at $10 million.

The Edmonton-based businessman, who operates three industrial parks in Alberta, wants to manufacture lithium batteries, algae-based solar cells and develop other “green” energy initiatives on the site of the former pulp and paper mill which closed in 2010.

However, nothing is final until the deal closes Sept. 5.

“It’s premature to speculate. It isn’t a done deal yet,” said city Coun. Ron Kerr. “I can’t see it having an immediate effect (on taxes), but it’s going to be fodder for a lot of discussion.”

The former mill was the “cash cow” for the city, providing approximately $5 million in local taxes back in 2006-’07. That number was reduced as the city whittled back the industrial tax rate, falling to $2 million in 2010. However, after the mill closed due to poor markets, mounting corporate debt and ongoing battles with the labour union, Catalyst began selling off equipment and dismantling the operation. The company recently emerged from bankruptcy protection. As a result of the mill closure, the land’s “industrial” assessment was reclassified as “commercial” which meant a much lower tax rate. This past year, Catalyst paid $161,000 in city taxes while residential taxes went up 13.6 per cent to make up for just some of the shortfall.

“It was a big loss of revenue,” said Laidlaw.

The pending sale though provides economic optimism. In addition to presumably more tax revenue, Laidlaw said the city will benefit through more jobs, not just at the industrial park, but also through supporting businesses and services. These, in turn, leads to other economic spinoffs, such as better retail sales.

“We’re all waiting to see what happens,” said Laidlaw.

Both Laidlaw and Bill MacGougan of the regional BC Assessment branch say the mill site has lot of potential. It addition to the deep-sea port, the site is fully serviced and has a sewage treatment facility that was built to not only treat mill effluent, but also all the city’s sewage (the city has its own sewage treatment plant).

“It all depends on what they do with it,” said MacGougan from his office in Nanaimo. “If something like this goes ahead, it’s all positive.”

He added that it is unlikely the industrial land will be reclassified in time for the 2013 assessment, as evaluations are conducted in October.

 

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