The Strathcona Regional District could own its own building by the end of the month after its board voted Wednesday to borrow more than $1 million.
Directors agreed to go ahead with short-term borrowing of $1.6 million in order to take ownership of the building at 990 Cedar Street which the regional district has been proportionally leasing for the past nine years.
Tom Yates, the regional district’s corporate services manager, told the board at its Wednesday afternoon meeting that the property owner is prepared to transfer the property to the regional district but the corporation does not have the funding on hand to complete the sale.
“Because the current owner will not take coupons, he’s going to require cash (and) we don’t have the cash at this point, this bylaw will allow us to temporarily borrow against the loan authorization bylaw approved by the board previously,” Yates said.
That loan, previously approved by the board, won’t come in before the sale is ready to be completed, Yates explained.
“Once the long-term debt proceeds are received, probably in January, any costs associated with the temporary borrowing will be repaid at that time,” Yates said, adding regional district staff “anticipate closing the deal on the office building by probably the end of this month.”
In order for the sale to go through, the regional district had imposed conditions of purchase including, “resolution of a water penetration issue on the building’s east face and the repair of gutters damaged by snow accumulations last winter.”
Yates said the owner has addressed those issues.
“The owner has been diligent in attending to these matters and it is anticipated that all conditions of sale will be met sometime this month which will allow the parties to move forward with completion of the property transfer,” Yates said.
The regional district first got the gears rolling on purchasing the downtown building, located across from the Campbell River Community Centre, earlier this year as a way to resolve spacial constraints. Because of the way the building is designed, staff have been divided between two floors and some senior staff have been sharing office space while others are hot desking. Owning the building, however, will allow the regional district to reconfigure and make better use of the space.
Yates has previously noted that purchasing the building, which is also partly leased by MNP, makes the most sense financially for the regional district.
“Based on current projections of interest rates, operating expenditures and leasehold revenues, the acquisition of the corporate office asset is anticipated to be essentially cost neutral when compared to historical leasehold expenditures,” he said in March. “The asset being acquired also provides the board with the opportunity to build equity in real property which will likely continue to increase in value over time.”
The regional district was able to follow through with its purchasing plans after receiving the approval of voters through an alternative approval process in March and April to borrow up to $2.042 million.
Through the 41-day period, 10 opposition forms were received from the public which was less than 10 per cent of the 34,177 registered voters in the Strathcona Regional District. Approval of the electorate is obtained when less than 10 per cent of the estimated number of eligible electors submit elector response forms by the deadline.