SPECIAL PLANNING AND DEVELOPMENT COMMITTEE HILLSIDE DEVELOPMENT · PDF filespecial planning...

SPECIAL PLANNING AND DEVELOPMENT COMMITTEE

HILLSIDE DEVELOPMENT

October 10, 2013 SCRD Board Room, 1975 Field Road, Sechelt, BC

AGENDA

CALL TO ORDER 9:30 a.m.

AGENDA 1. Adoption of the Agenda

2. Hillside Workshop

a. Historical Overview – Fred Gazeley

VERBAL

b. Financial Position – Tina Perrault ANNEX A pp 1 – 10

c. Roads and Services – Steven Olmstead VERBAL

d. Environmental Background 1. Introduction – Steven Olmstead 2. Preliminary Marine Foreshore Habitat – Dave Bates, FSCI

Biological Consultants

VERBAL ANNEX B pp 11 – 24

e. Hillside Opportunities Assessment – Michael McLaughlin, Rural Futures Association

ANNEX C pp 25 – 54

f. Proposed Terms of Reference ANNEX D pp 55 – 58

g. Hillside Committee Vacancies VERBAL

h. Communication - Sharon Gaetz, City of Chilliwack Mayor Regarding Visit and Meeting – Development of the Chilliwack Industrial Park

ANNEX E pp 59 – 60

REPORTS

3. Proposed Amendment Bylaws 310.152 and 337.106 regarding Exemption of 11 Metre Height Limit for Windmills

ANNEX F pp 61 – 66

ADJOURNMENT

N:\Finance\1880 Reports, Statistics - Financial\1880-01 Reports - General\2013-OCT-10 SPECIAL PDC STAFF REPORT - Hillside Financial Overview.docx

SCRD STAFF REPORT DATE: September 17, 2013

TO: Special Planning and Development Committee, October 10, 2013 FROM: Tina Perreault, Treasurer RE: HILLSIDE FINANCIAL OVERVIEW RECOMMENDATION(S): THAT the Treasurer’s report regarding the “Hillside financial overview” be received for information; AND THAT Staff work with BC Assessment on the rational for the land values at Hillside for roll numbers 746.07917.000 and 746.07917.200. BACKGROUND

At the February 23, 2012 Regular Board Meeting, Motion 079/12, recommendation 10 was adopted, partial excerpt as follows:

Recommendation No. 10 Hillside Development

AND THAT staff report back to the May Corporate and Administrative Services Committee with the financial background of the Hillside development project;

DISCUSSION In 1990, the Sunshine Coast Regional District purchased a large block of land in the amount of $2.21million dollars, for the purpose of a commercial or industrial development, known as Hillside. Not all the property is for economic enterprise, and includes a large demonstration forest, protected environment, and parkland (Attachment 1and 2). The SCRD borrowed to purchase the property, but was able to pay the principle off in five years from proceeds of land sales (Attachment 3). In the periods from 1992 to 1999, $2,980,748 worth of land was sold; with the last offer to purchase occurring in 2013 for Lot H. Hillside also generates income from water and land leases. However, 50% of the water lease revenue must be remitted back to the Provincial Government. To prepare the property for sale, extensive development costs went into the site, such as land prep, dike construction, roadwork, and drainage management. Costs associated with the service, such as staffing costs, marketing, meeting costs (HIDEGRO) are also considered

1

ANNEX A

Hillside Financial Overview Page 2

development costs (Attachment 4). A total of $3,535,266 of development costs and $571,017 of interest from initial borrowing have been expensed for Hillside. In 2004-05, $53,000 of taxation was collected to help fund operating costs, and since inception of Hillside, a deficit of (1,188,307) has accumulated. Of this deficit, $1,135,307 is due to the SCRD General Fund. This means the SCRD is providing the cash flow required to pay for the expenses each year, with the repayment to occur from the “future land sales”. The assumption is that when land sales occur, the funds will be used to reduce the debt. If the sale of Lot H materializes, the $519,000 will go toward reducing the debt. Hillside is charged interest on the debt, and has been at a rate of 3% since 2003, which is the revolving line of credit rate of the SCRD. Currently, Lot G is the only active lot for sale and has an assessed value of $391,000. There is three large blocks totalling 144.75 acres that could potentially be sold. However, it is unclear what portion of the land is usable, what the assessed and market values are for the parcels. Staff recommend working with BC Assessment on the rational for the land values at Hillside for roll numbers 746.07917.000 and 746.07917.200 to determine if any protected lands are include in the current assessed values. There is also a demonstration forest that could be explored for any potential economic benefits. Attachments:

1. Hillside Industrial Park Property Ownership 2. Hillside Industrial Park 2009 Aerial Photo 3. Hillside Financial Overview 4. Hillside Budget Detail 5. Hillside BC Assessment Data

2

PROPERTYRIVTOW

49.42 ACRES

48.93 ACRES

SCRD

RW

PORT MELLON HIGHWAY

B.C. HYDRO AND POWER AUTHORITY

WHET

STON

E R

OAD

ROAD

ACRES1.32

4.22 ACRES

CREE

KSO

UTH

F

CREE

KNO

RTH

FOREST

E

SERVICE

SRW

NATURAL

UNSURVEYED CROWN LAND

B

11.66 ACRES

A

ROAD

C

ANEV

O

3.16 ACRES

D

GAS

ACRES6.84

TN

C

RP

DRAI

NAGE

RW

D.L.

TO

GI

TCE

12.25 ACRES

J

7747

6616

1645

D.L.

D.L.

D.L.

PIPELINE

DAKOTA CREEK

CREEKMcNAIR

MELLON

1618

1645

PROTECTIONHABITATNATURALHILLSIDE

CREEK

NDAKOTA CK.

MARSHSALT

OLITTLE

DAKOTA

R

D.L.

D.

L.

POT

46.4 ACRES

1645

OCP Boundary

H

NATURAL

DUNH

AM

ROAD

GH

IJ

1

EDCB

HWY.

KLM

ROAD

A

K

KAIKALAHUN

GAS

I SOLD

H

CREEKMcNAIR

EF D C B A

UNSURVEYED CROWN LAND

N

PIPELINE

AMcNAIR

McNAIR FOREST SERVICE ROAD

McNAIR FOREST SERVICE ROAD

FOREST

SERVICE ROAD

McNAIR FORESTSERVICE ROAD

5.60 ACRESWATER LOT

LEASE8.99 ACRESWATER LOT

LEASE

5.73 ACRESWATER LOT

LEASEHillside No. 116.70 ACRESLOG STORAGEWATER LEASE

Hillside No. 214.62 ACRESLOG STORAGEWATER LEASE

Hillside No. 318.50 ACRESLOG STORAGEWATER LEASE

Hillside Demonstration Forest

HILLSIDE INTERPRETATION

AREA

NORTH DAKOTA

HILL

SIDE

ROAD

DISTRICT LOT 1482DISTRICT

LOT1462

DISTRICTLOT3386

FLEETWOODFOREST

PRODUCTS

HILLSIDEMARINE

TERMINAL

DOCK

DISTRICT LOT 1482

DISTRICT LOT 539

DISTRICTLOT 1645

BAYSIDE SAWMILL

COMMUNITYDRY LANDLOG SORT

6.30ACRES

DISTRICT LOT 7830

THORNBROUGH CHANNEL

10.0 ACRES

10.7 ACRES

DISTRICTLOT 1618

155 ACRESENVIRONMENTAL

RESERVE

WEST PARTDISTRICT LOT 1365

CROWN LAND

DISTRICTLOT 1364

DISTRICT LOT 1365

SQUAMISH INDIAN BAND RESERVE

DISTRICT LOT 6754

SECHELTCREEK

CONTRACTING49.70 ACRES

B.C. HYDRO AND POWER AUTHORITY

CONSORTIUM

FLEETWOODWATER

LOTLEASE

CITY TRANSFER8.30 ACRES

WATERWELL

25 YEAR LEASE

HOWE SOUND

SORT

COASTLAND

HOWE SOUND PULP & PAPER MILL

Centra GasCompressorStation

2.5 ACRES

- LAND FOR SALE

- LAND SOLD

- PROTECTED ENVIRONMENT REVISION DATE: OCTOBER 2002

- DISTRICT LOT 539

- DISTRICT LOT 1365

- DISTRICT LOT 1482

- DISTRICT LOT 1618

- DISTRICT LOT 1645

- DISTRICT LOT 7747

For Sale

APPROX. 9 ACRES

8

0 150 300 45075Meters

COASTLAND WOOD IND.

CONSORTIUM

LegendWater Lease

Land Sold

SCRD

Protected Environment

Long Term Lease

Other

Road

SCRD

HILLSIDE INDUSTRIAL PARKPROPERTY OWNERSHIP

ATTACHMENT 1

3

8HILLSIDE INDUSTRIAL PARK

2009 AERIAL PHOTOGRAPH

DL 1482

DL 1482

F E

A

D

B

C

C

GC

OV

EN

AN

T

J

DL 1645

DL

66

16

DL 539

DL 539

K

DL 1618DL 1635

B ACDEF

H

I

HA

B

C

DE

1

G

I

J

K

LM

ATTACHMENT 2

4

Hillside Financial Overviewas at December 31, 2012

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total

Revenues:

Lot Sales: DL 1365 (Consortium 1992, 49.7ac) 402,000 402,000 Lot H (Sechelt Creek Contr. 1992, 2.5 ac) 42,500 42,500 Lot A (Bayside Sawmills 1993, 11.66 ac ) 2 446,519 446,519 Lot C (Howe Sound Sort 1994, 6.84 ac) 375,000 375,000 Lot D (Bayside Sawmills 1995, 3.16 ac) 146,747 146,747 Lot E (Hillside Marine 1997, 8.3 ac ) 709,766 709,766 Lot F (Fleetwood Forest 1997, 4.22 ac) 325,966 325,966 Lot N (Centra Gas 1999, 4.29 ac) - - - - - - - - - - 532,250 - - - - - - 532,250 Total Land Sales 2,980,748

Water Leases - - - - 5,218 18,852 23,994 18,311 19,689 19,689 19,689 19,689 19,689 19,689 20,686 22,103 22,306 27,220 47,125 43,682 44,918 46,269 52,818 53,168 564,804 Land Leases - - - 38,446 65,408 90,276 49,079 69,988 18,511 16,500 16,200 16,875 19,644 19,800 20,400 24,000 21,206 24,179 16,991 17,415 17,850 18,296 18,296 18,664 618,024 Property Taxes 25,000 28,000 - 53,000

Other revenues and cost recoveries - - - - - (161) 4,540 114,516 94,918 - - 8,465 22,821 800 500 7 26,736 33,000 2,190 - 308,332 To/from unfunded amortization 82 055 109 622 191 677To/from unfunded amortization 82,055 109,622 191,677

- Interest on Agreements for Sale: 1 - DL 1365 (Sold To Consortium 1992) - - - - 22,583 18,714 14,561 10,100 5,312 - - - - - - - - 71,270 Lot C (Howe Sound Sort 1994) - - - - - - 29,250 27,383 25,347 23,128 20,710 18,173 15,409 - - - - 159,400 Lot D (Bayside Sawmills 1995) - - - - - - 4,804 8,015 5,005 3,037 1,663 277 - - - - - 22,801 Total Revenues 0 0 0 80,946 495,208 949,200 272,975 248,313 1,204,514 62,354 590,512 63,479 77,563 40,289 41,586 71,110 98,247 51,399 97,116 145,342 172,390 64,565 71,114 71,832 4,970,054

Expenditures:Principal payments on bank loan - - - - 171,000 571,519 157,575 160,000 938,985 - - - - - - - - 1,999,079 Interest paid on bank loan - - 10,185 138,397 119,643 109,166 107,148 67,502 18,976 - - - - - - - - 571,017 Development costs 4,745 - 56,034 75,929 93,785 222,193 137,765 702,307 177,709 89,071 84,369 64,899 176,644 430,402 107,383 94,279 131,671 102,696 133,040 171,693 193,709 96,795 95,285 92,864 3,535,266 Accumulated Prior Year Deficits 4,745 4,745 70,964 204,344 93,563 47,241 176,754 858,250 789,406 816,123 309,980 311,400 410,481 800,594 866,391 889,560 922,983 974,280 1,010,204 1,036,555 1,057,874 1,090,104 1,114,275 Total Expenditures 4,745 4,745 70,964 285,290 588,772 996,441 449,729 1,106,563 1,993,920 878,477 900,492 374,879 488,044 840,883 907,977 960,670 1,021,230 1,025,679 1,107,320 1,181,897 1,230,264 1,154,669 1,185,389 1,207,139 6,105,361

3Surplus / (Deficit) - Due to General Revenue (4,745) (4,745) (70,964) (204,344) (93,563) (47,241) (176,754) (858,250) (789,406) (816,123) (309,980) (311,400) (410,481) (800,594) (866,391) (889,560) (922,983) (974,280) (1,010,204) (1,036,555) (1,057,874) (1,090,104) (1,114,275) (1,135,307) (1,135,307)

Less: Accumulated Taxation Revenue (25,000) (53,000) (53,000) (53,000) (53,000) (53,000) (53,000) (53,000) (53,000)

Deficit per Financial Statements (914,560) (975,983) (1,027,280) (1,063,204) (1,089,555) (1,110,874) (1,143,104) (1,167,275) (1,188,307)

ATTACHMENT 3

5

SUNSHINE COAST REGIONAL DISTRICT [540] - Hillside Development Project

Employees Yes

General Manager Steven Olmstead Manager Steven Olmstead

Established 2003 Location Port Mellon, Electoral Area F

Authority Bylaw No. 1052 Amendments

Source of Funding Self funded (plus taxation limit) Limit on Tax 0.0650 ¢/1000 in assessment

Description Development and Operation of an Industrial Park. The SCRD has worked to turn a former gravel pit into a successful industrial park. Services have been added incrementally and conservatively. Many background technical reports were prepared leading to an Official Plan. Water lot leases are provided along with land through lease or license. The Hillside Industrial Group (HIDEGRO) and Owners and Tenants Association (HIPPOTA) are active.

Notes for 2013 Service formally established in 2003 under a MEVA. Taxation limit is the greater of $0.065/$1000 or $210,150 at the time of requisition.

2009 2010 2011 2012 2013 Change from 2012BudgetValues

BudgetValues

BudgetValues

BudgetValues

BudgetValues

ParticipationRatiosas $ as %Requisitions

Electoral AreaEgmont/Pender Harbour 0 0 0 0 0 0 0.00% 15.81%

Halfmoon Bay 0 0 0 0 0 0 0.00% 11.65%

Roberts Creek 0 0 0 0 0 0 0.00% 9.31%

Elphinstone 0 0 0 0 0 0 0.00% 6.72%

Howe Sound 0 0 0 0 0 0 0.00% 17.53%

Member MunicipalitySechelt Indian Govt District 0 0 0 0 0 0 0.00% 2.43%

District of Sechelt 0 0 0 0 0 0 0.00% 25.31%

Town of Gibsons 0 0 0 0 0 0 0.00% 11.24%

Net Taxes Levied 0 0 0 0 0 0 0.00% 100.00%Limit by law 549,656 545,211 565,304 547,473 533,244

Funding Remaining -549,656 -545,211 -565,304 -547,473 -533,244

2009 2010 2011 2012 2013Tax Rate $ / 100,000BudgetValues

BudgetValues

BudgetValues

BudgetValues

BudgetValuesProperty Tax Class

RESIDENTIAL [01] 0.00 0.00 0.00 0.00 0.00

BUSINESS/OTHER [06] 0.00 0.00 0.00 0.00 0.00

MAJOR INDUSTRY [04] 0.00 0.00 0.00 0.00 0.00

ATTACHMENT 4

6

SUNSHINE COAST REGIONAL DISTRICT GL5290 Page : 1

Date : Oct 01, 2013 Time : 8:47 amBudget Department by Category

From Category: 540 To Category: 540 Budget Detail: Amended Budget

Account Code: ??-?-???-??? To : ??-?-???-??? Year: 2013

2009 2010 2011 2012 2013 2013Actual

AmountActual

AmountActual

AmountActual

AmountAmendedBudget

ActualAmountAccount Code Account Description

General Revenue Fund -SCRD

Revenues

Hillside Development Project

01-1-540-067 Water Leases -44,918 -46,269 -52,818 -53,168 -52,800 -54,922

01-1-540-068 Land Leases -17,850 -18,296 -18,296 -18,664 -29,250 0

01-1-540-138 Sale Of Assets - Land 0 0 0 0 -25,047 0

Total Revenues -62,768 -64,565 -71,114 -71,832 -107,097 -54,922

01-2-540-200 Administrative Services 10,624 13,115 8,738 11,730 12,423 8,282

01-2-540-214 Water Lease Agreement 23,927 25,704 26,409 26,584 23,500 0

01-2-540-220 Salaries & Wages 10,146 10,409 12,946 14,325 5,960 4,464

01-2-540-225 Benefits 2,083 2,112 2,828 3,179 1,311 1,049

01-2-540-227 Wcb - Hillside Development Project 158 164 287 235 103 84

01-2-540-246 St Interest 31,097 31,736 32,703 33,428 34,000 34,059

01-2-540-258 Commissions 0 0 0 0 0 17,475

01-2-540-284 Meeting Expense 144 136 0 0 250 157

01-2-540-293 Office Expenses 0 0 0 0 250 0

01-2-540-320 Travel 124 491 40 0 500 0

01-2-540-335 Advertising 2,036 0 225 0 4,500 0

01-2-540-355 Marketing 750 6,500 0 0 6,500 0

01-2-540-360 Audit Fees 697 1,695 1,429 1,445 800 1,467

01-2-540-381 Legal Fees 0 730 6,694 0 0 2,162

01-2-540-387 Other Prof Fees 0 2,000 2,500 0 15,000 8,503

01-2-540-409 Hydro 60 66 66 28 0 0

01-2-540-415 Landscaping/grounds Mtce 2,242 1,937 420 1,910 2,000 0

01-2-540-482 Trsf Other/balance -21,319 -32,230 -24,171 -21,032 0 0

Total Expenditures 62,769 64,565 71,114 71,832 107,097 77,702

Hillside Development Project Surplus/(Deficit) 1 0 0 0 0 22,780

Report Total --> 1 0 0 0 0 22,780

7

SUNSHINE COAST REGIONAL DISTRICTOct 01, 2013

Account Name

2013 Amended Budget

Budget Department Report

ID

Date:GL5290

Account Code

8:47 am

Description Burden %Status Quantity Rate

Time:

Amount

1Page:

01-1-540-067 Water Leases

534 2012 R3 A 1.00 -52800.00 0.0000 -52,800

Total Water Leases -52,800

01-1-540-068 Land Leases

533 Coastland B A 1.00 -18250.00 0.0000 -18,250

533 For 2013 Projects ( Res109/13 Rc#16) A 1.00 -11000.00 0.0000 -11,000

Total Land Leases -29,250

01-1-540-138 Sale Of Assets - Land

1240 Recovery A 1.00 -25047.00 0.0000 -25,047

Total Sale Of Assets - Land -25,047

01-2-540-200 Administrative Services

536 A 1.00 12423.00 0.0000 12,423

Total Administrative Services 12,423

01-2-540-214 Water Lease Agreement

3308 A 1.00 23500.00 0.0000 23,500

Total Water Lease Agreement 23,500

01-2-540-220 Salaries & Wages

538 GM Planning A 0.05 116984.00 0.0000 5,849

538 Exempt Cost of Living Adjustment A 5849.00 0.02 0.0000 111

Total Salaries & Wages 5,960

01-2-540-225 Benefits

907 Exempt A 5960.00 0.22 0.0000 1,311

Total Benefits 1,311

01-2-540-227 Wcb - Hillside Development Project

908 Exempt A 5960.00 0.02 0.0000 103

Total Wcb - Hillside Development Project 103

01-2-540-246 St Interest

2321 A 1.00 34000.00 0.0000 34,0008

SUNSHINE COAST REGIONAL DISTRICTOct 01, 2013

Account Name

2013 Amended Budget

Budget Department Report

ID

Date:GL5290

Account Code

8:47 am

Description Burden %Status Quantity Rate

Time:

Amount

2Page:

Total St Interest 34,000

01-2-540-284 Meeting Expense

2122 A 1.00 250.00 0.0000 250

Total Meeting Expense 250

01-2-540-293 Office Expenses

542 A 1.00 250.00 0.0000 250

Total Office Expenses 250

01-2-540-320 Travel

1495 Meetings as required A 1.00 500.00 0.0000 500

Total Travel 500

01-2-540-335 Advertising

910 Land and Other A 1.00 4500.00 0.0000 4,500

Total Advertising 4,500

01-2-540-355 Marketing

541 General Marketing A 2.00 3250.00 0.0000 6,500

Total Marketing 6,500

01-2-540-360 Audit Fees

2298 A 1.00 800.00 0.0000 800

Total Audit Fees 800

01-2-540-387 Other Prof Fees

537 Prelim Fish Habitat Assess (Res109-13 Rec16) A 1.00 4000.00 0.0000 4,000

537 Review & Update 2010 Hillside Compt Analysis( A 1.00 8000.00 0.0000 8,000Res109/13 Rec#16)

537 Modification Foreshore covenant (Res109/13 A 1.00 3000.00 0.0000 3,000Rec#16)

Total Other Prof Fees 15,000

01-2-540-415 Landscaping/grounds Mtce

539 Clean up and brushing A 1.00 2000.00 0.0000 2,000

Total Landscaping/grounds Mtce 2,0009

Hillside BC Assessment Data

YEAR JUR-CD ROLL-NO STR-NAME ACTUAL-LAND-VALUE ACTUAL-IMPR-VALUE TOTAL-ACTUAL-VALUE LOT-DIM FIX-LGL

Park/Protected Lands2013 746 04880.000 DUNHAM RD 1,099,000 0 1,099,000 28.11 District Lot 1618 REM, Group 1, New Westminster Land District, Except Plan PLS R

2013 746 06874.000 PORT MELLON HWY 138,000 0 138,000 .99 District Lot 6616, Group 1, New Westminster Land District, (REF PL 4884)

2013 746 07917.500 DUNHAM RD 422,000 0 422,000 2.9701 Lot X, Plan BCP24782, District Lot 1618, Group 1, New Westminster Land District

Demonstration Forrest2013 746 00044.000 583,000 0 583,000 156.5 District Lot 539, Group 1, New Westminster Land District, Except Plan DEDICATED

Water Lot Leases2013 746 04095.501 2,200 0 2,200 1.32 Group 1, New Westminster Land District, UNREGISTERED OCCUPIER OF CROWN FORESHORE

2013 746 04095.500 THORNBROUGH CHAN 146,000 0 146,000 84.28 Block A TO F, District Lot 7830, Group 1, New Westminster Land District, Except

Lot B - 25 Year Land Lease2013 746 04095.220 MCNAIR FOREST SERVICE RD 709,000 70,400 779,400 6.3 Lot B, Plan LMP12808, District Lot 1482, Group 1, New Westminster Land District,

Lot H - Agreement for Sale in Place2013 746 07917.400 DUNHAM RD 424,000 0 424,000 14.28218 Lot H, Plan BCP24782, District Lot 1482/ 1645, Group 1, New Westminster Land Dis

A il bl f S lAvailable for Sale

Lot G 2013 746 07917.300 DUNHAM RD 391,000 0 391,000 12.0336 Lot G, Plan BCP24782, District Lot 1645/ 7748, Group 1, New Westminster Land Dis

Use to be Determined2013 746 07917.000 PORT MELLON HWY 2,985,000 0 2,985,000 473.88 District Lot 7747, Group 1, New Westminster Land District, ROW LMP21364

2013 746 07917.200 HILLSIDE INDUST PK 8,034,000 0 8,034,000 123.69 Block 1 REM, Plan LMP5041, District Lot 1482 1645 7748, Group 1, New Westminster

11,410,000- To verify with BC Assessment rational for values for folio 07917.000 & 07917.200$

ATTACHMENT 5

10

N:\Administration\0540 Board & Committees\Agendas\PDC - Current\2013-10-01 Hillside Marine Foreshore Study cover report.docx

SCRD STAFF REPORT

DATE: October 1, 2013 TO: Special Planning and Development Committee – October 10, 2013

FROM: Steven Olmstead, GM, Planning and Development

RE: Hillside Preliminary Marine Foreshore Assessment

RECOMMENDATION(S) THAT the Preliminary Marine Foreshore Habitat Assessment at Hillside Industrial Park by FSCI Biological Consultants dated September 17, 2013 be received. BACKGROUND As part of the 2013 Function 540 Hillside Development Project budget, funding was allocated to undertake a preliminary assessment of the foreshore habitat at Hillside with a view to identifying the most suitable location, if any, within the environmental covenant area for additional ocean access. FSCI Biological Consultants were retained to carry out the study. Their report is attached. Dave Bates, the biologist who prepared the report will be presenting his findings at the Hillside Special Planning Committee workshop meeting on October 10th. The key findings of the study are that the foreshore covenant put in place in conjunction with the first subdivision at Hillside has been effective. The report recommends maintaining the covenant area intact. If additional ocean access is required the most appropriate location would be through Lot B, which will be available when the current lease expires on March, 2019. The second location would be the south part of Lot G – a location that, according to the report has considerable habitat value but which would have lesser impact than other areas within the covenant.

11

ANNEX B

8-5520 McCourt Road, Sechelt, BC, Canada, V0N 3A7 604-740-2637 (tel) 604-648-8620 (fax)

[email protected]

September 17, 2013 Our File No.: FSCI-13-0016 Steve Olmstead General Manager, Planning & Development Sunshine Coast Regional District 1975 Field Road, Sechelt, BC, V0N 3A1 Re: Preliminary Marine Foreshore Habitat Assessment at Hillside Industrial Park Dear Mr. Olmstead: As requested I have reviewed the foreshore areas along Hillside Industrial Park (HIP) Lots B, C, G and Dunham Road including the protective environmental covenant on Lot G. The purpose of my assessment is to provide a qualitative evaluation, based on review of existing literature and ground truthing the sites. The ground truthing was limited to the existing foreshore and near shore habitats that front these areas. Once completed, I have been asked to provide an opinion on foreshore/riparian areas (including the covenant) that might be suitable for development of marine access points and related commercial/industrial development. It should be noted that any future detailed development proposal might require more in-depth assessment prior to submitting application for permitting (Fisheries and Oceans Canada review). This would include any potential alterations to the marine riparian, changes in foreshore and potential impacts and alterations to finfish and/or shellfish habitat. There may also be a requirement to provide an opinion on potential impacts of any development to species at risk including marine mammals. I have reviewed the limited number of accessible environmental studies on the subject lots in HIP (and Dunham) and referenced in this letter where appropriate. The list is attached at the end of this letter. In reviewing documents it was noted that some information and opinions contradict one another. As an example in Norecol (1990) and van Poppelen (2010) there is the suggestion that habitat along the southern end Lot G, and Lots B and C provide “poor” foreshore and riparian habitat. This appears in contrast to Whitehead (1999) that reported the southern end and presumably the continuation of area fronting Lot C provided “good” quality habitat. Certainly, it can be argued that these assessments (Norecel, 1990 and Whitehead, 1999) are dated and that 12+ years later conditions may have improved.

12

2

Throughout the review of the documents one comment stands out with respect to the area habitat. In the document, titled: “HIP Environmental Covenant Amendment Application Report and Recommendations” the author refers to mitigation for damages to the marine riparian and in particular the Lot G covenant. It appears to infer that mitigation could be used as a means of removing restrictions of the covenant. While the details of the covenant were not provided, it is important to clarify that removing habitat and developing it may require compensation not mitigation. Mitigation would suggest measures protect the covenant from development not a trade for the removal. Removal of habitat from the covenant through development may require compensation and the re-creation of similar and suitable habitat elsewhere. The burden of constructing this “new” habitat and any associated construction and monitoring costs is the responsibility of the owner or developer of the parcel. In order to provide an opinion on the current condition of the marine foreshore habitat(s) including the existing covenant, I conducted ground surveys on June 3, July 2, September 10 and 17. These site visits were coordinated with low tide periods that allowed access along the shoreline and observations of the near shore habitats. In reviewing the HIP, I have focused on specific areas and objectives. These included:

• Areas of foreshore and riparian buffers fronting Lots, B, C, G and the foot of Dunham Road;

• Assessing and formulating an opinion on the ecological value and function of the existing environmental protective covenant fronting Lot G;

• Examining the existing protective covenant/park at the south side of Dakota Creek;

• Assessing and formulating an opinion of the ecological (habitat) value of the foreshore habitat(s) from Dakota Creek to the south corner of Lot C, and;

• Examining the intertidal and near shore area fronting Lot C and G with the specific purpose of identifying any potential or existing Eelgrass meadows (Zostera spp) that could influence future development.

As previously reported, in the past, the area has been impacted by development that supported the forest industry. Today the area is still an active industrial area with booming and dryland activities located on Lots B and C. Presently Lot G is vacant but the marine area fronting it is used to tie up wood booms. The area at the foot of Dunham Road does not have any industrial development but appears to be utilized by local property owners and other area residents for the launch of small pleasure boats.

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As result of my onsite assessment(s), I offer the following observations and comments. Lot B

• The initial site assessment on Lot B was limited as the area is actively used to water and boom timber.

• The foreshore appears to be severely impacted. • This area, with the exception of a small, vegetated fringe on the northern

edge of the lot has limited remaining habitat. • The limited existing habitat and the current use would restrict

rehabilitation, if that were the objective. Current development and potential future re-development could be designed to preserve the remaining riparian attributes, and improve foreshore attributes, depending on planned use.

Lot C

• This lot, while not protected by a foreshore covenant has a healthy and vibrant marine riparian buffer.

• The immediate intertidal and foreshore is characterized by boulder and cobble substrate and drops quickly near the low tide level. There is no evidence of established marine vegetation with the exception of small patches of Fucus distalis.

• Access below low tide was hampered by industrial activity, but given the extent of booming activities it is assumed that the bottom would have a blanket of wood waste.

• The intertidal area, characterized by boulder and cobble substrate transitions into a benched vegetated fringe. This beach supports an area of marine grasses and sedges including Saltgrass (Distichlus spicata) and Slough sedge (Carix spp.). Behind the area of grasses and sedges is a healthy shrub layer and finally a strip of mixed tree species.

• The marine riparian strip provides varied habitat for terrestrial wildlife species. While no significant use was noted there is evidence of browsing along the shrub and sedge patches and in June, Willow flycatchers were observed nesting.

Lot G

• Lot G is the largest of the three assessed in HIP and currently supports an Environmental Protection Covenant.

• The majority of the lot is protected by the environmental covenant that appears to include the marine riparian fronting the lot and a larger area near the mouth and adjacent to the lowest Dakota Creek stream reach (Reach 1).

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• This lot provides the greatest ecological and habitat value with varied terrestrial and foreshore habits. The lot contains three significant eco-areas, the Dakota Creek alluvial fan and associated features, large “park” area that includes a significant streamside protection and enhancement area (SPEA) along the south side of the creek and the Environmental Protection Covenant.

• While somewhat contradictory at the south end, the literature and previous studies support the conclusion that Lot G supports high value riparian and foreshore habitat(s).

• The southern end of the lot, including the intertidal and upland habitats is similar to Lot C. This area, like Lot C is also characterized by a steep drop-off at low tide and low probability of established Eelgrass.

• The intertidal is varied with materials sizes decreasing toward the Dakota Creek alluvial fan. Patches of boulders and cobble characterize the south end of the intertidal area. There are also areas of smaller gravels and marine sediments.

• Evidence exists of a shellfish community along the intertidal within areas of smaller and finer sediments/substrates. Varnish (Mahogany) clams (Nuttalla obscurata), Softshell clams (Mya spp) and a few Pacific Oysters (Crassostrea gigas) were noted.

• The benched, vegetated fringe above the intertidal supports various grasses and sedges (see Lot C). The “pockets of sedge appear healthy and well established and there is evidence the area is actively grazed by Black Bear (Usus americanus).

• In addition to the native sedge and grasses, native species including Saltmarsh Sandspury (Spergularia marina), Douglas aster (Aster subspicalus) and Pacific Silverweed (Potentilla pacifica) were noted.

• The benched “marsh” fringe is followed by an established shrub layer that supports an assortment of shrubs including Salmonberry (Rubus spectabilis), Nootka Rose (Rosa nootkana), and Vine maple (Acer circinatum), to name a few. Behind the coastal shrub fringe is an established deciduous and coniferous early seral stage riparian corridor. In my opinion the protective covenant has aided in this complexity.

• As you progress further from the shoreline invasive plants species become more prevalent, in particular Himalayan Blackberry and Yellow Broom.

• Observations in June suggest Willow Flycatcher (Empidonax traillii), Swainson’s Thrush (Catharus ustulatus) and American Robin (Turdus migratorius) are using the area for nesting. Browse along and through the sedge patches was also noted during my late summer observations. This is similar to activity noted on Lot C.

• The intertidal and foreshore area near the northern end of the lot also provides suitable forage fish spawning habitat. This conclusion is supported by deGraaf (2013) who identified this area as having suitable habitat attributes for forage fish. This is the only area I believe contains suitable habitat.

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Dunham Road

• A large flat intertidal section that can be attributed to the outer edge of the Dakota Creek alluvial fan characterizes this area. .

• The substrate varies between gravel and marine muds but are smaller deposition materials from Dakota Creek

• The upper bench above the high tide line is characterized by an assortment of grasses and sedges, then a shrub fringe.

• Observed habitats features and indicative of the northern side of Lot G and are typical of marine habitats found along river estuaries.

• This area also appears to be used extensively by the public to access the water for recreational pursuits.

Conclusions As a result of my assessment and observations of the areas above, I offer the following conclusions/suggestions for you to consider. I have tried to restrict my comments to the habitat(s) located within the riparian corridor and the intertidal areas. I recognize that the initial question was whether the covenant could be altered to allow access to the water and economic and commercial development in this area. Presumably, the idea would be to alter the covenant without impairing its function. Lot B

• This lot is owned by the SCRD and is presently under lease to Coastland Wood until 2019.

• This is the most impacted area observed in terms of foreshore health. This lot would require significant habitat reconstruction and would be a likely candidate for continued development and/or redevelopment.

• The upland areas on this lot are cleared and water access appears to be established.

• Its my opinion that re-development of this lot would result in less habitat impact. The observed habitat in 2013 is poor.

Lot C

• This lot is currently owned by the Coastland Wood. • The foreshore and marine riparian habitats fronting this lot are well

established and consist of a variety of ecological features worth protecting. • No additional, substantial clearing of the marine foreshore should occur

and if access to the water is required through this lot, careful site placement should undertaken in order to minimize the impact to recovering ecosystems.

• The intertidal fronting Lot C is dominated by cobble and boulder substrates. This area could support some form of dock development

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assuming it spanned the vegetated areas upland from the high-water mark. In particular areas that support saltgrass and sedge communities. Pier footings needed for an above ground dock would have less impact on the intertidal because of the materials and lack of critical habitat such as Eelgrass.

• The low tide and near shore habitats show no signs of critical habitats such as Eelgrass meadows. The steep drop-off at the low tide point suggest moorage could be achieved but would have to be accessed with a pier or above ground dock. This assumes booming activity is not occurring.

• The question of a boat ramp has been posed and while the final determination is outside this review, I would suggest the possibility of acceptance by regulators would be greater if such a structure were built through intertidal areas of boulder and cobble.

• As identified in bullet 3, if access to the water through Lot C is required, the clearing of a corridor through the marine riparian would be necessary. The riparian and terrestrial habitats along this lot are healthy and functioning. As a result the location of water access would have to be chosen carefully with any selected site providing the lowest riparian disturbance. Ideally access would be toward the centre of the lot where the intertidal, comprised of cobbles and boulders is narrowest.

• Protection of the vegetated fringe of marina riparian is important both ecologically and socially. Maintaining the “green” strip provides visual quality protection from the water, “hiding” development.

Lot G

• This lot is currently owned by the SCRD and available for purchase. • The registered covenant provides protection of foreshore/riparian habitats

that support a variety of terrestrial and marine wildlife species. • The covenant as presented should remain. If access is required, I suggest

exploring a small opening through the riparian and across the intertidal at the most southern end of the lot. (adjacent to Lot C). This would ensure the majority of the protected area on Lot G remains and reduces the fragmentation of the habitat on Lot G.

• Any proposed opening or right-of-way must be small and any dock structure should span the foreshore vegetation. A boat ramp, if proposed would also have to be located on the southern edge and its location selected to protect grasses and sedge. Any structure should access the water over the cobble and boulder areas of the intertidal.

• The northern end of Lot G should remain as is. I would argue that the habitat values at this end are high. This includes the Dakota Creek delta and is attributes.

• Ideally, the covenant would remain and be extended through Lot C ensuring continuum of the marine riparian habitats. This may be a trade-off for select access through the current riparian area.

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Dunham Road

• This area should remain as is. The topography and fact that the access is on the Dakota Creek delta suggests long low slopes. Materials are likely highly erodible.

• The area is currently used for recreation with limited impact. The topography (delta) does not lend it self to an established ramp without developing a long ways offshore.

• Observed habitat(s) and their attributes are similar to those observed on the north end of Lot G and should be protected.

Closing Remarks It appears from our earlier conversation that Lot G is the center of interest. Given my observations of this area I would not recommend the removal of land from the protective covenant. I would also suggest there is some logic in extending it along Lot C. If access to the water is the goal only through Lot G, it should be considered along the southern property line where the covenant is narrower and habitat features more confined. Any proposed water access at this juncture should be contained with minimal loss to the covenant. Without truly understanding ownership of the lower Lots (B and C), I would suggest that the best location for accessing the water is Lot B or lower lot C. This area is previously disturbed and short spans to deep water appear possible. Earlier reports suggest excavation would be required. While this may be true I would argue the loss of disturbed foreshore on these lots is more favourable than opening up the marine riparian areas (covenant) on Lots C and G. I trust these comments are helpful. If you have any questions please feel free to contact me at you convenience. Sincerely,

D. Bates, PhD, RPBio Habitat Biologist /db attach.

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References Anon (no date). Hillside Indiustrial Park environmental covenant amendment application report and recommendations. Best Coast Initiatives. de Graaf, R. 2013. Habitat assessment for suitability of intertidally spawning forage fish species, Surf Smelt (Hypomesus pretiosus) and Pacific SandLance (Ammodytes hexapterus) at Lot G, Hillside Industrial Park, Sechelt, BC. Prepared for the Sunshine Coast Regional District. Norecol 1990. Environmental impact assessment of Hillside Industrial Park. Norecol Environmental Management Ltd., Vancouver BC. Prepared for the Sunshine Coast Regional District. van Poppellen, P. 2010. Development potential and water access Lots C and G, Hillside Industrial Estate. Integrated Resource Consultants Inc. Letter to Mr. M. McLaughlin, Economic Development Coordinator. Whitehead, A. 1999. Dakota Creek bioinventory for subdivision of Lots G and J, Hillside Industrial Park, Port Mellon, BC. Whitehead and Associates, Bowen Island, BC. Prepared for the Sunshine Coast Regional District. Sechelt, BC.

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Photo 1: Lot C top and bottoms showing the high intertidal and vegetated areas above the tide line. Note the saltgrass and sedge community followed by a shrub layer and finally the treed zone. This marine riparian area is considered good quality habitat. The red circle in the background shows the industrial use of Lot B and the related impacted riparian and intertidal area.

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Photo 2: Example of the boulder and cobble dominated intertidal areas that can be found along the front of Lot C and the southern end of Lot G. The area above the rock outside the normal highwater supports sedge and saltgrass.

Photo 3: A view along toward the northern end of Lot G. Note the smaller gravels (forage fish spawning) and the presence of marine sediments and muds that support shellfish. A large saltgrass area can be seen in the background. This area is the southern edge of the Dakota Creek delta.

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Photo 4: The top photo shows the marine riparian area near the southern end of Lot G and northern end of Lot C. The bottom photo shows a portion of the treed Protective covenant and a portion of the foreshore and intertidal area in front of Lot G.

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Photo 5: The shoreline at the foot of Dunham Road. The area is located on the northern edge of the Dakota Creek alluvial fan. The grade is shallow and substrates dominated by small gravel and river sediments.

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G

Approximate drop o� at low water

Area to include in protective covenant

C

B

Potential access points

Area suitable for forage �sh spawning

Signi�cant areas of saltgrass and sedges.

Hillside Industrial ParkLots B, C and GAreas of important habitats

Note: Approximate marine riparian area is shaded in green

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N:\Administration\0540 Board & Committees\Agendas\PDC - Current\2013-10-01 Hillside Opportunities Analysis update cover report.docx

SCRD STAFF REPORT

DATE: October 1, 2013 TO: Special Planning and Development Committee – October 10, 2013

FROM: Steven Olmstead, GM, Planning and Development

RE: Hillside Opportunities Analysis Update

RECOMMENDATION(S) THAT the Hillside Industrial Park Competitiveness And Development Opportunities Assessment 2013 Update Of 2010 Report by Rural Futures Associates be received. BACKGROUND As part of the 2013 Function 540 Hillside Development Project budget, funding was allocated to undertake an update of the competiveness and opportunities analysis done in 2010. Rural Futures Associates were retained to carry out the study. Their report is attached. Michael McLaughlin, the economic development specialist who prepared the report will be presenting his findings and recommendations at the Hillside Special Planning Committee workshop meeting on October 10th.

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ANNEX C

HILLSIDE INDUSTRIAL PARK

COMPETITIVENESS AND DEVELOPMENT OPPORTUNITIES ASSESSMENT

2013 UPDATE OF 2010 REPORT

Completed by

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2 HIP Opportunity Analysis Up-‐date

TABLE OF CONTENTS

SCOPE OF ANALYSIS ................................................................................................................. 3

SUMMARY OF ASSESSMENT ................................................................................................... 4 1.0 SITUATION SUMMARY ...................................................................................................... 6

2.0 INDUSTRIAL SITE LOCATION CRITERIA .................................................................... 6

3.0 HILLSIDE INDUSTRIAL PARK COMPETITIVENESS EVALUATION ....................... 7 4.0 COMPETITION EVALUATION ...................................................................................... 10

5.0 OPPORTUNITY ANALYSIS: OVERVIEW .................................................................... 13

6. OPPORTUNITY ANALYSIS: SPECIFIC INDUSTRIES ................................................. 15 6.1 VALUE-‐ADDED FOREST PRODUCTS .................................................................................... 15 6.2 DRYLAND MARINA/MARINE SERVICES ............................................................................. 16 6.3 BIOMASS OPPORTUNITIES .................................................................................................... 19 6.3.1 USES OF WOODY BIOMASS ............................................................................................................ 19 6.3.2 WOODY BIOMASS DEMAND AND SUPPLY ............................................................................. 20 6.3.3 HOG FUEL PRODUCTION ................................................................................................................ 24 6.3.4 CO-‐GENERATION PLANT ............................................................................................................... 25 6.3.5 WOOD PELLET PLANT .................................................................................................................... 27 6.3.6 SUMMARY OF WOODY BIOMASS OPPORTUNITIES ........................................................... 29

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HIP Opportunity Analysis Up-‐date 3

HILLSIDE INDUSTRIAL PARK

COMPETITIVENESS AND DEVELOPMENT

OPPORTUNITIES ASSESSMENT 2013 UPDATE

SCOPE OF ANALYSIS This report is an update of work completed in 2010. Much of the analysis completed in 2010 remains relevant. The 2013 update focuses on a review of Opportunity Analysis Factors identified in 2010; specifically:

1. Hillside Industrial Park competitiveness with other industrial lands in southwestern BC

2. industrial land availability in southwestern BC

3. review of best opportunities to attract investment

4. new analysis of the opportunity for a woody biomass-based enterprise

5. more detailed business case analysis for a marine services facility at HIP

The 2010 report and this update are a preliminary analysis of the viability of Hillside Industrial Park to attract investment. The primary objective is to identify industry sectors with the highest likelihood of locating at Hillside Industrial Park. Results are used to identify where additional analysis is warranted and to inform an investment attraction marketing strategy. The section numbers in this report match those in the 2010 report in order to facilitate review of both documents.

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SUMMARY OF ASSESSMENT COMPETITIVENESS The competitive advantages of Hillside Industrial Park (HIP) are cost of real estate, freedom from encroachment from residential land use, quality of life and access to energy. HIP is as competitive or more competitive than any other location in the Strait of Georgia region for an industry that transports bulk goods by barge. The competitive disadvantages of HIP are access to markets, access to major transportation systems, and site readiness (development costs). Most of the unsold land is not surveyed. Only one parcel (Lot G) is market ready. The lack of a treated water supply and a wastewater treatment plant make location at HIP unlikely for some types of industries that otherwise are most likely to locate at HIP. There is an acknowledged shortage of industrial land in the Greater Vancouver Area (GVA). Parcels over 15 acres are in very short supply. Industrial land availability in the Fraser Valley has declined since 2010. Some communities are adding to their industrial land inventory, but are increasingly restricted. Large parcels (over 40 acres) are very rare. While this might appear to bode well for HIP, developers who cannot find land in the GVA resort to Calgary, not to closer, non-metropolitan land. HIP is unable to compete with metropolitan areas for most types of manufacturing and commercial investment. There are serviced industrial lands, principally in the District of Sechelt, that are more attractive than HIP for small, light industrial and commercial uses. Small business development at HIP is likely limited to enterprises that have low services demands and can profitably ship products via the barge terminal at HIP or by road. Enterprises with high noise levels or materials storage needs may prefer HIP over urban industrial lands. OPPORTUNITIY ASSESSMENTS New in the Update 1. From a transportation perspective, Hillside Industrial Park is more competitive than

portrayed in the 2010 report. A BC Hydro study found that the cost of shipping by ocean barge is relatively equal across the Strait of Georgia. HIP is close to Port Metro Vancouver. These two factors make HIP highly competitive for industries that utilize bulk materials and manufacture bulk goods.

2. HIP’s competitiveness from the standpoint of energy availability is raised from moderate to high based on comments from industry representatives.

3. The 2010 report cited use of HIP by Port Metro Vancouver as an opportunity. There is little likelihood that Port Metro Vancouver will purchase property at HIP.

4. There are 150,000 tonnes of raw woody biomass generated annually at Howe Sound log sorting yards. HIP is a logistically favourable location to amass biomass from the Strait of Georgia region. Processing of biomass into a low grade product for pulp mill use or into a high energy product for a wide range of energy users may be economically viable.

5. HIP is a competitive location for a hog fuel processing plant or wood pellet plant.

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6. A co-generation plant likely is not viable. 7. An investment group considered HIP as a location for a wood pellet plant, but the

need to build a water treatment plant was a primary reason for rejecting the location. Unchanged in the Update 1. A single, large purchase remains one of the most likely scenarios. 2. HIP is most suited to industries that produce bulk goods that can either be shipped

economically to Port Metro Vancouver or directly overseas. 3. The potential for a value-added wood products enterprise or cluster of enterprises

remains strong. 4. The business case for a boat yard or dryland marina, with adjacent marine services,

remains strong. The suitability of HIP as a location viz. the Lower Mainland and the availability of a suitable site in HIP remain uncertain, pending an environmental review of shore and water at Lot G and Lot C.

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1.0 SITUATION SUMMARY The only significant change is Lot H, formerly unoccupied, is under an agreement for sale. The site is being used to accumulate and process woody biomass.

2.0 INDUSTRIAL SITE LOCATION CRITERIA Opportunity Analysis Factor One: Hillside Industrial Park lacks features that are critical in the industrial site selection process. No changes from 2010 report. Evaluating HIP against the criteria used by site locators provides an indicator of competitiveness. The evaluation identifies how ready HIP is for medium and large scale development. The results, reported in Section 3.0 of the 2010 report, should be considered when site improvements at HIP are considered.

Readiness Conundrum: An industrial site is ready for development when services are installed, land and geotechnical surveys are completed, development permit requirements are detailed and there are minimal impediments to obtaining a development permit. HIP does not meet these tests. The SCRD is not advised to provide water and sewage services to HIP because there is no certainty that would attract buyers and the expense is very large. However, there is only one surveyed lot; remaining unsold parcels are not surveyed. Most unsold areas are on slopes and geotechnical surveys are required before it is known if these sites can be developed. An investor would be required to complete the required surveys before knowing if a site was suitable. The lack of readiness of HIP for development is very dissuasive. The SCRD is advised to consider surveying at least some of the unsold parcels and complete terrain assessments.

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3.0 HILLSIDE INDUSTRIAL PARK COMPETITIVENESS EVALUATION The 2010 report evaluated HIP’s competitiveness against other industrial lands, according to site location criteria. Highly competitive: cost of real estate, quality of life, freedom from encroachment from residential land use Moderately competitive: access to raw materials, costs of labour, availability of labour, energy availability, policy structure and taxation, business support and promotion Not competitive: access to markets, access to major transportation systems, site readiness (development costs) Based on opinions from industry representatives, energy availability should be moved to the highly competitive category. Availability of skilled labour, access to markets and connections with land and water transportation systems are primary location selection criteria.It is important to note that the cost of real estate – HIP’s prime competitive advantage – usually does not show up in site location criteria. Land is viewed as an appreciating asset, and so the costs of site development and operating expenses are more crucial for selecting a location. Land only need pay its rent in order to be deemed worth its cost. Willingness to pay a high cost for land is directly related to the value of output. Low cost land is likely an incentive for low output value industries, but not necessarily for high output industries. Table 3.0 lists the 2013 selling prices for industrial lands in the GVA and Fraser Valley. Table 3.0: 2013 Industrial Land Selling Prices

Municipality Price Range/acre 1000$

Vancouver 2000 - 5000 Burnaby 1300 - 2000 North Vancouver 2500 - 3300 Richmond 1300 - 1700 Delta 950 - 1200 New Westminster 1100 - 1500 Coquitlam 1200 - 1600 Port Coquitlam 1100 - 1400 Surrey 750 - 1300 Langley 750 - 1300 Maple Ridge 700 - 800 Abbotsford 700 - 850 Chilliwack 550 - 600 Mission 500 - 600 Hope 250 - 350

Industrial Opportunities Study – Hope, BC, Colliers International, 2013

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At roughly $50,000 acre, land values at HIP are 1% of the top price paid in Vancouver and 25% of the lowest price paid in Hope. Direct price comparisons are misleading, because prices in Table 3.0 are for fully serviced sites. However, the data illustrate the price gap between HIP and lands in the heart of BC’s industrial region. The cost for an industrial investor to construct water, sewage, other services and develop the physical site has a range depending on the location in HIP and the needs of the industry. A minimal cost of $100,000 per acre (minimum 10 acres) is realistic. A plant that requires water treatment would add an additional $100,000 per acre. Even with development costs, the cost of a serviced acre at HIP is small compared to the GVA and Fraser Valley. The fact that HIP is not connected to rail transport and higher operational costs compared to the Lower Mainland are the reasons its land prices are discounted. The low cost of land at HIP, coupled with the high cost of development, suggests that low output value industries that do not require significant development of services and infrastructure are most likely to find HIP suitable. A biomass production facility and a bioenergy plant are two industries that will be examined in this report. There continues to be potential for a large industrial interest purchasing a significant piece of HIP. The marketing strategy for HIP should include low cost means to advertise HIP to the national and international investment markets. ACCESS We make one significant revision to the earlier report. The 2010 analysis reported that “HIP is clearly at a disadvantage with respect to access to markets and to major transportation systems when compared to its chief competitors, industrial lands in the periphery of the Great Vancouver Area and the Abbotsford-Hope corridor.” While it is true that HIP’s isolation from rail and road networks is a disadvantage, new information suggests that HIP is favourably competitive from a transportation cost perspective, compared to other locations on the BC coast and Vancouver Island. The revised, improved transportation outlook is based on a 2010 BC Hydro report that found equivalence in the cost of marine transport anywhere in the Strait of Georgia region.

The dominant feature on BC‟s Coast with respect to the delivered cost of wood or biomass fuel is presence of the Pacific Ocean. Most wood manufacturing facilities on the Coast utilize the ocean as a transportation conduit. Logs, chips, sawdust, shavings and hog fuel move by barge and trade routinely from the Lower Mainland / Lower Coast to Vancouver Island and vice versa. . . . Thus the Ocean exists not as a limiting factor, but rather as a cost saving measure that allows the forest industry access to wood fibre over the entire region at comparable costs. Log dumps and barging are the key components to this transportation system. Once a tree is delivered to a coastal log dump, the cost to delivering the wood anywhere along the BC Coast is static. Transport companies adjust the size of their barges to accommodate a short or long haul (on the south Coast) while keeping unit cost about the same.1

1 The assertion that the cost of transport is even across the Strait of Georgia was challenged by industrial

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The BC Hydro study examined the costs of shipping biomass, but the evenness of transportation costs pertains to all materials. This update examines the opportunity for a bio-fuel production plant at HIP (Section 6.3), because of the volume of biomass that is generated at HIP and other, nearby locations. From a transportation cost perspective, a plant of this type at HIP is as viable as any other location. Given the centrality of HIP with respect to Vancouver Island mills, the Lower Mainland mills and transportation hubs, HIP is in a favourable location for an industry that uses materials generated anywhere on the coast or Vancouver Island. Otherwise, the conclusions listed under Opportunity Analysis Factor One on page 12 of the 2010 analysis are unchanged.

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4.0 COMPETITION EVALUATION This section examined industrial land inventories on the Sunshine Coast and in Powell River, Squamish, the Greater Vancouver Area and the Abbotsford-Hope corridor as of 2010. In this up-date, we review inventories and evaluate industrial land sale trends since 2010 for what they indicate about HIP sales opportunities. Sunshine Coast There has been little change in the occupancy of industrial lands outside of Hillside Industrial Park on the Sunshine Coast since 2010. The industrial land inventory remains virtually unchanged. These lands, principally located in the District of Sechelt, do not compete for the same investment market as HIP. Industrial areas within the two municipalities, on Sechelt First Nation lands and in Area B of the regional district are serviced, mainly small sites, adjacent to developed land. These sites will attract small manufacturing and warehouse operations that need full services and are suitable for a light industrial land use. HIP is more suitable for industries that need sizeable lots, do not require full services (treated water, sewage treatment) and have noise or storage requirements that are incompatible with urban settings. Squamish: Development in Squamish is proceeding rapidly. The 99-acre waterfront site that was being rezoned in 2010 has been advertised internationally. Several proposals have been received. A 61-unit condominium project is proceeding. These lands will be used for commercial and residential development. Twenty acres in the Sea to Sky Industrial Park sold in 2013. Planned construction is for warehouse and commercial space. Perhaps most significant for HIP’s prospect, the 212-acre Western Forest Products mill site has a $25.5 million offer from an Asian firm that proposes to build a Liquefied Natural Gas plant at Woodfibre. This proposal is evidence that international firms are land prospecting in the region. The site is not connected by road, but does have a deep water port capability. Logistically, HIP is at least as well situated. One of the more likely scenarios for HIP is purchase of a substantial area by a large industrial player. The purchase near Squamish supports the potential for that option. Greater Vancouver Area: The 2010 review reported nearly 7000 acres of industrial zoned land in the GVA. A 2011 study by Metro Vancouver reports only 4521 acres as available for development within the period 2012-2017. An additional 1988 acres are expected to be available at unspecified times after 2017. However, a survey of every industrially zoned parcel by NAIOP reports there are only 2500 acres available by 2017. The balance was eliminated due to constraints that make development impossible. The industrial land absorption rate in the GVA over the past decade was 350 acres/year. Accordingly, the GVA will utilize its industrial land base by 2020; about five years earlier than the 2010 review reported. Seventy-nine percent of industrial land parcels are smaller than five acres. There are large parcels remaining only in Maple Ridge and Surrey, but nowhere are parcels over 30 acres available. The inventory of ready industrial lands by municipality and GVA region is shown in Table 4.1. The largest blocks of industrial land are in municipalities where prices are between

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$.75 -1.5 million per acre. It is important to note that there is plenty of undeveloped land in most of the peripheral cities that could be re-zoned for industrial use. Even so, when the NAIOP study estimated that only half of the lands in the Metro Vancouver report are in fact capable of development, there is an immediate shortage of industrial, especially heavy industrial land, in the GVA. Table 4.1: Market Ready Industrial Lands in the GVA (acres)

Sub-region Before 2017 After 2017 Total Unoccupied in

2011 North Shore 59 59 Vancouver 67 67 Burnaby/New Westminster 349 349 Northeast Sector 183 183 Richmond 841 94 935 Delta 708 358 1066 Surrey/White Rock 1560 719 2279 Langleys 395 168 563 Maple Ridge/Pitt Meadows 359 649 1008 Metro Vancouver 4521 1988 6509 source: Market Readiness of Metro Vancouver Vacant Industrial Lands, Metro Vancouver, 2011 The Consultant attended a NAIOP Industrial Land Forum on behalf of the SCRD and used the opportunity to make contact with Metro Vancouver and industry representatives. David Gomley of Beedie Development Group identified an urgent and long term need in the GVA for industrial land parcels over 15 acres in size. The trend is to larger buildings with footprints in the 250,000 to 500,000 square foot range (6-12 acres). Since the maximize site occupancy by buildings is 60%, sites in the 10-20 acre range are required. The cost of industrial land in the GVA remains about what it was in 2010: between $1-5 million/acre, depending largely on proximity to the City of Vancouver and Port Metro Vancouver. According to Chris MacCauley of CBRE Limited, high land costs and the lack of parcels over 15 acres are driving some potential buyers to other markets, chiefly Calgary. There is significant erosion of the industrial land base in the GVA, especially in the City of Vancouver and along waterways through the GVA. Erosion is primarily due to the conversion of industrial land to residential and mixed residential/commercial uses. The consequence is a pattern observed in the 2010 report and confirmed by current information from NAIOP and cities in the lower Fraser Valley. Industry is locating in the peripheral communities of the GVA. The inventory of industrial lands (Table 4.1) indicates that there is a shortage of sites remaining in those communities. The result is location or relocation of industry further from the GVA, in Mission, Abbotsford and Chilliwack. Upper Fraser Valley: Demand for industrial land in the upper Fraser Valley has been steady since the review in 2010.

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In 2010, Chilliwack had 200 acres of available, serviced industrial land and now has 70 acres. Much of the absorption has been from business expansion, as opposed to recruitment. Parcels are less than 10 acres. Requests for parcels of 20-30 acres are common; requests for 100 acres are occasional. The average price of an acre of industrial land in Chilliwack rose from $300,000 in 2005 to $550,000 in 2013. Chilliwack is reviewing its Official Community Plan. At this time, additional industrial lands have not been identified. Industrial land would almost certainly have to be found in the Agricultural Land Reserve. Hope has an active economic development organization. It has focused efforts on meeting the land needs of existing businesses and attracting regional-scale enterprises, such as distribution centres and service yards. Hope has 277 acres zoned for industrial development, of which 173 are ready for development. Most of this area is zoned for light industrial activity and is proximate to Highway 1. There are no parcels over 15 acres. Hope’s limited success in attracting investment is an indicator of the lack of willingness of industry to locate far from Metro Vancouver and the Port. The community is strategically located from a road transport perspective and has rail service. It is capable of providing a temporary transit point, as Ashcroft is, or HIP is proposed to be. Industrial land prices are around $250,000 acre; roughly 1/4 of the price in Surrey and four times the price at HIP. Sales have not been brisk, indicating that industry prefers to pay higher land costs and be closer to markets, the centre of commerce and an international port. The Consultant asked the panel at the NAIOP industrial lands conference why they spoke of Calgary as the alternative to Vancouver. What about the upper Fraser Valley communities? What about locating ocean-side at Hillside Industrial Park. The response was that industry needs to be in large centres. “There’s nothing past Abbottsford.” Lack of skilled labour, crucial business services, and financial resources were cited as impediments.

Opportunity Summary: Opportunity Analysis Factors Three and Four in the 2010 report identified declining inventories of industrial land and the migration of industry to the periphery of the GVA as indicators that demand for lands a HIP might increase. New perspectives, taken directly from the decision-makers, suggest that HIP is unlikely to attract most of the array of industries. HIP is not competing for manufacturing, construction and warehouse industries. The market for lands at HIP is medium to large heavy industrial operations that are most likely involved in natural resource manufacturing or other uses of raw resources and their by-products. Marketing efforts should focus on those industrial sectors.

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5.0 OPPORTUNITY ANALYSIS: OVERVIEW From the 2010 review: Opportunity Analysis Factor Five: A large, single investor may offer the best prospect for investment at HIP. The likelihood of this scenario has probably increased. It is increasingly difficult to find an industrial land parcel over 15 acres anywhere in southwestern British Columbia. The only ocean accessible large parcel, other than HIP, is in Powell River. There are few sites along the west coast of North America that could accommodate a large, resource-based manufacturer. Most likely interest would come from an Asian natural resource enterprise. We note the offer to purchase the former Western Forest Products near Squamish by an Indonesian firm. It is certain that Hillside Industrial Park is known by at least segments of Indonesian industry and somewhat in China. The requests for large holdings at Abbotsford and Chilliwack frequently have come from Asian companies. The Manager of Business Development for Chilliwack Economic Partners Corporation vigorously volunteered that the best bet for Hillside Industrial Park is a single, large purchase. The circumstances that supported this scenario in 2010 have become stronger. Two major purchases have been made in the Howe Sound area by Indonesian firms. According to an estimate from the Bank of Montreal, foreign direct investment into Canada from China hit an all-time high in 2012, with most of that money going to purchases of natural resource companies and projects. Additionally, trade with Asia accounts for over half of Port Metro Vancouver’s growth in cargo volume over the past four years. The challenges that affect development of HIP by a large manufacturer limit the type of enterprise that would find HIP suitable. HIP is not connected by road or rail. That means HIP is most suited to industries that produce bulk goods that can either be shipped economically through Port Metro Vancouver or which go directly overseas. HIP has a competitive advantage for transportation of commodities in the Strait of Georgia region. Shipping of bulk commodities to HIP, manufacture of them into goods, and direct foreign export is the most competitive scenario. Asian firms are the most likely to make this type of investment at this time. A Senior Planner at Metro Vancouver stated that the organization has no interest in industrial lands outside of its boundaries, despite a 2007 policy document cited in the

Opportunity Alert: There is a shortage of industrial parcels over 15 acres in SW BC. There are very few parcels large enough (40 acres) for a sizeable manufacturing plant. HIP should be marketed internationally via Trade and Invest BC and the federal Trade Commissioner Service.

Opportunity Alert: The possibility of interest in HIP by a foreign, likely Asian, firm is great enough that the SCRD should be prepared for it to happen.

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2010 report to the contrary. Instead, Metro Vancouver’s 2011 Regional Growth Strategy calls for preservation and intensification of existing industrial lands. The 2010 report identified Port Metro Vancouver (PMV) as a possible purchaser of lands at HIP. PMV recently purchased 200 acres of land formerly held in the Agricultural Land Reserve (ALR). PMV forecasts a need for 1800 acres of industrial land by 2025. Almost all land available is in the ALR. The conversion of farmland to industrial use is controversial. It is not possible to predict if PMV will be able to acquire additional lands. Correspondence from Tom Corsie, Vice President, Real Estate for PMV indicates little interest in HIP.

From my perspective, PMV would not have a requirement for a large oceanside property located on the Sunshine Coast. I am aware of the particular property because several years ago, a Board member of the legacy Fraser River Port Authority who lived on the Sunshine Coast made us aware of the opportunity. It would be interesting, however, to determine if there is a manufacturer or cargo transfer interest or other water oriented industrial user that would find the site and location of value. We are used to receiving inquiries for rail served tidewater accessible property, but I can’t think of a proponent that would fit the Sunshine Coast site.

Mr. Corsie rules out use by PMV, but points to the possibility of HIP as a location for manufacture of bulk products. That possibility is one of the best opportunities identified in the 2010 report. With our new understanding of the comparatively favourable sea-going transportation logistics of HIP, this opportunity remains strong. Another opportunity identified in the 2010 report was use of HIP as a temporary transit point for container shipments. The concept was based on using HIP, instead of storing containers on the very high value PMV lands. Mr. Corsie throws cold water on this idea.

The property [HIP] and concepts have similarity to a proposal by Port Alberni to have container ships stop there first, discharge their cargo, then direct deliver containers to the Lower Mainland by barge. We believe the economics of such a proposal make it not viable and are discouraging its promotion. The concept proposed by Port Alberni (similar issues at an alternate location) really means a reconstruction of the existing marine vessel movement, marine terminal interface, local distribution/re-distribution of containerized cargo and the billions in infrastructure that exist to support an already extremely efficient supply chain system.

The 2010 review reported that the lack of available parcels and the high costs of site development are impediments to smaller scale enterprises establishing at HIP. Aside from exceptions described in Section 6, our observations are unchanged. The types of industries that currently occupy HIP do not have high services needs or high infrastructure costs. Enterprises with similar low needs could be attracted to currently occupied sites at HIP, provided owners were willing to sell. It is much more unlikely that parcels that have not been cleared of forest cover, leveled and accessed

Opportunity Update: The 2010 analysis listed Metro Vancouver or Port Metro Vancouver as potential purchasers of property at HIP. That possibility is withdrawn.

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by roads will sell to smaller enterprises. Small (1-5 acre) serviced industrial lands are available elsewhere on the Sunshine Coast at prices that make them more competitive than preparing and servicing sites at HIP.

6. OPPORTUNITY ANALYSIS: SPECIFIC INDUSTRIES The 2010 review identified marine services and value-added wood products as small scale enterprises with the greatest likelihood of attracting investment. Additionally, the types of large scale industries that would most likely find HIP attractive were described. The situation for value-added wood processing and large industry investment has not changed significantly. The business case for a dry land marina and marine services installation remains strong. That business case is developed in more detail below. Our revision of the regional commodity transportation cost picture (Section 3) improves HIPs competitiveness as a focal point for commodity transfer and potentially bulk goods manufacturing. Coupled with that competitive advantage is a growing market for biofuels. The log sorting yards at HIP and nearby Twin Creeks produce an estimated 150,000 tonnes of wood products waste annually. The inventory of this potential biofuel is growing. We add a business case review of uses for woody biomass to this section.

6.1 VALUE-‐ADDED FOREST PRODUCTS . The 2010 analysis made two recommendations regarding the value-added wood products sector (VWPS). Recommendation 4: That Phase Two of the HIP investment attraction project include facilitation of discussions among VWPS operators and key organizations that support the VWPS, with the goal of producing recommendations to the SCRD for development of a VWPS cluster at HIP. Recommendation 5: That Phase Two of the HIP investment attraction project include a plan and budget to market HIP as a location for investment via forestry re- manufacturing associations and trade shows. Since 2010, two small sawmill operators that operated on Coastland Wood Industry properties retired their operations. At the same time, two small sawmills have set up on land provided by Howe Sound Pulp and Paper. More significantly, Click Modular Homes is building modular and custom homes in space leased in the buildings at the north end of HIP. Click builds custom products from BC logs. All Douglas fir is from the Sunshine Coast. The two sawmills on HSPP property supply dimension lumber to Click. Click employs ten persons and the services of many sub-trade firms, creating additional employment. The primary market for Click products is the Sunshine Coast. Click adds great value to a log and sells its products into the local market. Click Modular Homes, and its supply relationship with two independent sawmill operations, is a model of local ingenuity and high value use of Sunshine Coast logs. The 2010 analysis described the constraints that typically limit growth of the VWPS. They have been overcome. We presume that the Sunshine Coast Community Forest supplies

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some of the logs used by Click. The community forest announced a $200,000 economic development budget in 2012. The SCRD may wish to consider exploring a partnership with the Sunshine Coast Community Forest to stimulate the VWPS at HIP. Coast Community Builders Association is another possible partner. In 2013, the SCRD entered into a sale agreement for Lot H with an operator who is salvaging products from hog fuel produced at Howe Sound log sorting yards. This is another example of local ingenuity and this operation has the potential to inform the business cases for the enterprises discussed in section 6.3 below. These two operations indicate that development of the VWPS is possible on the Sunshine Coast. There are many small operators. A supply of high quality logs from the Sunshine Coast is available to the sector. Therefore, we reiterate recommendation 4 be implemented. There are several partners available to examine how a VWPS could be encouraged at HIP.

6.2 DRYLAND MARINA/MARINE SERVICES In 2010, we reported that there are years-long waiting lists for wet or dry vessel berths across the Strait of Georgia region. Over the past three years, demand has decreased slightly for dry berths, likely due to continued lethargy in the economy. Wait times for boats under 20’ are now about a year and 2-3 years for boats over 23’. Gibsons Landing Harbour Authority reports more names on its wait list than in 2010. Significantly, 40% of those on the wait list reside in the Lower Mainland. A marina at HIP would attract local and off-Coast boat owners. Our 2010 survey revealed a shortage of boat repair services across the Strait of Georgia region. Boat owners travel long distances to find repairs and often must wait weeks before their vessel is serviced. We have not repeated the survey. Instead, we contacted four marinas and four marine services providers by telephone. Marine services availability is good in some, mainly urban areas, such as Richmond, Delta and Saanich Peninsula. Once one is clear of the Lower Mainland or south Island, services are scattered and boats must travel long distances, depending on the service needed. On the Sunshine Coast there are adequate services for power boats under 23’ in length. Many owners do their own annual hull maintenance and there are haul out facilities on Porpoise Bay and in Pender Harbour. It is notable that boats come from afar to Gibsons for diesel repairs or refitting, due to a supplier with a good reputation. A marine hull and wood construction firm on Porpoise Bay has a similar reputation and distant clientele. There are fewer options for owners of sailboats, which require sling-type lifts to leave the water. A marine services facility at HIP would attract local and off-Coast boat owners. It should take advantage of the excess demand for servicing of sailboats. In evaluating the business case, we are confident that there is sufficient excess demand for boat storage and for marine services to warrant investment. Boat Yard: The 2010 analysis outlined a least-risk evolution for building a marine services array at HIP. That evolution began with a boat yard: a haul out facility and storage of boats without cover. Facilities to wash, scrape and paint hulls are provided.

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Owners do their own regular maintenance and local marine service providers supply mobile services at the boat yard. Estimating the revenue from a boat yard is straightforward. Revenue per boat is approximately $275/month. Two hundred boats, in storage for nine months, generate $500,000 in annual revenue. Lift charges ($200) and other services will generate approximately $150,000 annually. A conservative estimate of revenue is $650,000 year. Operating cost estimates are based on information provided by a boat yard operator. The costs of labour, equipment upkeep, supply, marketing, business management and fees for a 200-boat operation are estimated at $280,000/year. Net revenue is approximately $370,000 year. It is much more difficult to estimate capital costs. A haul out facility for small powerboats is relatively inexpensive. A lift facility for sailboats is relatively expensive. Sailboats require specialized forwarders to carry them to the maintenance yard. Any operation requires a boat washing facility. The haul out facility can be as inexpensive as a concrete ramp that is partially submerged or a more expensive jetty built on pilings. The cost of a lift varies according to the haul out design. It is not possible to make accurate estimates until a haul out site is identified. For the sake of pro forma evaluation, we estimate the highest cost to build the haul out and lift at $1 million. A boat yard can operate with one dependable forklift for transporting boats to storage locations. A new forklift designed for carrying boats cost $250.000. Two used lifts would cost the same. The boat yard surface need not be paved, except for the main forklift access route. We use a figure of $250,000 for site preparation and paving. We add $500.000 for site development, environmental mitigation and a suitable forwarder for sailboats. In this scenario, total capital cost is $2 million. At an annual profit of $370,000/year, the investment is returned in 5.4 years. A suitable location needs to be identified and environmental concerns must be mitigated. The possibility that a breakwater is needed at HIP must be investigated, although removal of haul out structures during the winter would obviate that need. Dryland Marina: We re-contacted two dryland marina operators for up-dated perspectives on the business case for a dryland marina. Both were nearly as positive as

in 2010 about the viability of that venture. According to estimates from these two operators, the capital cost to build a dryland marina that accommodates 200 powerboats is $3.5 - $4.0 million. The cost of a haul out and lift is slightly higher ($1.25 million) than for a boat yard, due to the need for rapid launching

and removal. Two working forklifts and one backup are required ($500.000). The cost for covered wooden structures that can store 200 boats is estimated at $1.25 million. Site preparation and paving of four acres is estimated to cost $400,000. Operating costs for a dryland marina are higher than for a boat yard. More employees are needed and equipment is used more regularly. Buildings need to be cleaned and maintained. Our sources estimated operating costs at $425,000/year.

Opportunity Alert: The business case for a boat yard is strong, provided a suitable location is identified.

Opportunity Alert: The business case for a dryland marina is strong, provided a suitable location is identified.

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Annual revenue from storage of a 20-25’ boat is $3500. Revenue from the storage of 200 boats is $700,000. Lift services, short term storage and other services will yield approximately $250,000 annually. There are opportunities to sell boating supplies, but they will not be included in revenue projections. Annual gross revenue is estimated at $950,000 and net revenue at $525,000. The cost of investment is returned in 7.6 years.

Marine Services: We re-contacted six marina operators about where their clients get marine services. The Consultant was on the BC Marine Highway Steering Committee where stakeholders from Richmond to Haida Gwaii discussed the availability of marine services. Service availability is good in the Lower Mainland and southern Vancouver Island. Waiting times for repairs and routine maintenance, reported in 2010, have dissipated in those regions. Boaters who moor outside of urban areas may or may not have nearby marine services. Sailboats, which require sling type lifts, have fewer service locations than powerboats. There are at least four places on the Sunshine Coast where a powerboat can be hauled out and serviced on the spot. Notably, all four are near Sechelt or Pender Harbour. The Gibsons area does not have a haul out and adjacent service yard. It appears that the excess demand for marine services reported in 2010 has been reduced. Across the Strait of Georgia region, boat owners are more or less adequately serviced. Some locations, Gibsons for example, are not well served. We note that vessels travel to Gibsons, Sechelt and Pender Harbour from afar, due to the strong reputations of the marine services providers that operate there.

Opportunity Summary: The 2010 survey of marinas and small craft harbours revealed a need for more boat storage in the Strait of Georgia region, particularly close to the Lower Mainland. Excess demand has decreased since 2010, but remains large enough to warrant an increase in supply. Waiting lists for berths at Sunshine Coast marinas and harbours are long. There have been several expansions of marinas in the Strait of Georgia region recently and a new facility near Powell River was recently completed. There has been little new investment in marinas in the Lower Mainland or Sea-to-Sky corridor. Lack of investment may be attributed to a paucity of suitable locations and the high very high cost of ocean adjacent properties. Lot G or Lot C are suitable locations for a boat yard or dryland marina. An environmental covenant precludes their use. A 20-metre wide breach in the covenanted shoreline strip is required. At time of writing, an environmental assessment of the covenanted land and adjacent waters is underway. Results are required before this opportunity can be appraised. Dryland marina operators who were interviewed were lukewarm about HIP as a site for a dryland marina. The location may not appeal to boat owners who do not live on the Sunshine Coast. A boat yard is not constrained by that location, because boats are often in storage for most of the year and in the water for the remainder.

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There appears to be a need for additional marine services in the Gibsons area. Most small craft owners do their own annual hull maintenance. A boat yard provides that opportunity. Where there are boats, the need for services is generated. We have the example of Jack’s Boat Yard in Lund. A marine services industry grew around Jack’s. As the boat yard grew, services went from mobile delivery to on-site services provision.

6.3 BIOMASS OPPORTUNITIES The log sorting industry at Hillside Industrial Park and Twin Creeks generates approximately 150,000 tonnes of residual biomass annually. The biomass is a mixture of bark and woody fibre. Stockpiles of residual biomass are growing at log sorting operations. There is a cost to operators from storing and disposing of the material. They are running out of space to store the material. Commercial use of the biomass converts a cost into a potential revenue stream and has the potential to create new jobs.

6.3.1 USES OF WOODY BIOMASS There are many commercial uses for woody biomass. Uses include:

1. hog fuel: power, steam and heat generation 2. manufacture of wood pellets: for consumer pellet stoves and electrical utilities 3. manufacture of a biologically inert, water impervious fuel via torrefication 4. compression into fire logs for domestic fireplaces 5. an ingredient in commercial compost manufacture 6. a variety of landscaping applications including mulch, ground sealants, erosion

control and filtering media 7. equine bedding 8. lignin production: replaces formaldehyde in particle board and plywood 9. pyrolysis oil (biocrude) 10. raw material for asphalt shingles 11. wood flour: a filler for wood fibre-plastic composites 12. firewood

The poor quality of woody biomass generated at Howe Sound log sorting operations compromises what it can be used for. The material is approximately 50% bark and 50% solid wood fibre. White fibre has the most value and uses. The majority of the bark is from cedar logs. Acidity and a stringy structure make it undesirable for many uses. Almost all fibre has been in the ocean and so has a salt content. Under combustion, the chlorine in the salt combines with hydrogen to produce hydrochloric acid. However, salt content is not an issue in a Bubbling Fluidized Bed Boiler. Howe Sound Pulp and Paper

Opportunity Summary: There is need for additional marine services in the Gibsons area. Local and Lower Mainland skippers would use them. Services will grow around a boat yard or marina. The SCRD should seek an investor for a boat yard or marina that includes provision for development of marine services on the site.

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has a BFB Boiler. The current use of Howe Sound biomass is limited to the pulp and paper industry. Given its physical properties, Howe Sound biomass is best suited for use as a fuel or compost component. A small amount of biomass is being used for landscaping and compost manufacture. Recently, an enterprise that utilizes Howe Sound biomass for several products has begun operation on Lot H at HIP. The possibility of processing hog fuel into higher quality products that could be used in any bioenergy system is examined below. The possibility of importing woody biomass to HIP is examined. Importation would improve the economy of scale for processing hog fuel. Co-generation facilities and wood pellet plants have minimum scales that require substantially more biomass than is produced by Howe Sound sorting yards, so they are not viable at HIP unless additional wood fibre is imported.

6.3.2 WOODY BIOMASS DEMAND AND SUPPLY Demand for woody biomass fuels is in flux. Presently, and for at least the next five years, there is a surplus of woody biomass in the BC forest industry. The closure of pulp and paper mills in the Interior and Coastal regions has reduced demand. The closure of sawmills (producers of hog fuel), primarily in the Lower Mainland, only partially offsets the excess supply within the forest sector. According to a variety of sources, the number of woody biomass boilers used for district heating and industry applications is expected to increase. However, as we describe below, there is ample furnish available from sawmills, agricultural waste and common civic waste streams within the regions that expect to see new users of biomass come online. One of the factors that has decreased demand for Coastal hog fuel is the glut of beetle-killed fibre available from the Interior. A BC Hydro assessment of the Provincial woody biomass supply shows the supply of hog fuel peaking between 2010 and 2015, and then declining rapidly.2 Closures of pulp and paper mills in the Coastal region have reduced demand for hog fuel. The BC Hydro study reports: “While residual wood chips remain in short supply (resulting in significant volumes of chips to be imported from the Interior), sawdust, shavings and hog fuel [in the Coastal region] are currently surplus to industry needs.” There are three factors that have the potential to increase the demand for processed hog fuel in the Coastal region. First, no one is selling a processed, hog fuel product. The introduction of a ready-to-use fuel with the appropriate moisture content and consistency may attract buyers. The BC Hydro analysis of fibre supply notes that significant quantities of wood chips are currently being imported to the Coast. The cost of this furnish is as much as $70/ODT. (oven dry tonne)3 Processed hog fuel can be sold

2 Wood Based Biomass Energy Potential of B.C., BC Hydro, November 2010; completed by Industrial Forestry Service Ltd. 3 We were unable to learn the cost per tonne paid by Howe Sound Pulp and Paper for Interior fuels used for energy generation. We presume the fuel cost is less than the cost of wood chips used for pulp production.

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profitably for about $20/ODT (f.o.b. Sunshine Coast). The two types of furnish are not equivalent, but some substitution of the lower cost product should be anticipated.4 Secondly, there is the potential for new markets for processed hog fuel. It can be used in any biofuel heating or power production system (provided salt content is eliminated). District energy (DE) projects are increasingly common. University of British Columbia and Simon Fraser University have operating DE plants. BC Hydro and Fortis BC are working with partners to build DE systems. Currently planned projects in the Lower Mainland and Fraser Valley will require 200,000 ODT within ten years.5 The consultant who prepared the report said in a phone conversation that there is an adequate supply of fibre from the lower Fraser Valley to meet demand from new district energy projects. We contacted several organizations that promote the use of bioenergy – none could provide an estimate of future demand trends in BC. As described in section 6.3.5, growing production of wood pellets is expected to increase demand for woody biomass. Further examination of the business case should assess the trend in biofuel consumption in southwestern BC and northwest Washington. Thirdly, demand for Coastal hog fuel is likely to increase because the supply of Interior furnish will begin a sharp decline in 2015. According to the BC Hydro study, the quantity of all forms of woody biomass in BC will decrease significantly over the medium term. Chart 6.3.2 shows that total volume from all sources in 2010 was over 50 million cubic metres. That volume is forecast to fall to 21 million cubic metres by 2025. Two issues apply downward pressure on demand for Coastal hog fuel. Coastal biomass has high salt content due to sea transport. When burned, salt combines with hydrogen to produce hydrochloric acid, which is highly corrosive. The additional costs of corrosive resistant systems put the cost of energy produced at more than twice the current cost from burning natural gas.6 Processing can mitigate many of the deficiencies of raw hog fuel. Mechanical processing grinds it to an optimum uniform consistency, reduces water content to 30% and eliminates much of the salt. However, in order to be used in the conventional boiler systems used for district energy and small-scale biomass-to-energy projects, salt and other impurities must be removed and water content reduced substantially below 30%. New technologies are emerging that eliminate impurities and reduce moisture content to 8%, about the same as for wood pellets. According to our industry sources, the energy content of this refined hog fuel product is 20 mega joules per kilogram, higher than wood pellets and lower than torrefied wood-based fuels. The cost to build the smallest scale economical plant (4 tonnes/day) is approximately $3 million. It is possible to create a high-energy product from hog fuel that can be shipped in bales that are wrapped in plastic to prevent them from getting wet during transport. Technically, the impurities problem is solved. The manufacturer of the processing system claims the fuel yields energy at a cost of 3.2¢ per mega-Watt hour (MWh), about 40% of BC Hydro’s residential rate. The business case for this process and product has not been researched.

4 Several industry spokespersons made this statement. 5 Biomass Availability Study, Envirochem Services Inc., 2012, p 9. 6 David Dubois, Project Coordinator for Wood Waste 2 Rural Heat.

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Secondly, at current costs per unit of energy, the economical distribution range for raw woody biomass fuels is about 150 kilometres. Small scale commercial and district energy operations use 3000-10,000 ODT per year of locally purchased biomass. It is unlikely that Coastal biomass will find energy markets outside of the pulp and paper industry even in a ground, 30% moisture form (basic processing). The highly refined and energy laden product described above might be competitive, since it has energy content on par with wood pellets, which are shipped around the world. Supply: The BC Hydro report examined the provincial supply of woody biomass to 2039. The data is summarized in Chart 6.3.2a. Standing timber makes up about 80% of available woody biomass in the province. The BC Hydro study found that the cost per mega-Watt hour (MWh) from standing timber was 55% higher than for hog fuel. That cost differential makes hog fuel far more competitive. Not surprisingly, green standing timber (Category D) is generally not being harvested and processed for use as a fuel. Chart 6.3.2a: Woody Biomass Supply for British Columbia

Wood Based Biomass Energy Potential of B.C., BC Hydro, November 2010 The supply of beetle-killed wood (Category C) is forecast to peak in 2015 or 2016 and then decline to near zero by 2021. The availability of hog fuel (Category B) is forecast to remain steady or increase slightly (on the basis of a prediction of a return to higher sawmill and veneer mill activity), with an annual volume of about 2.5 million m3. On the bases of cost and availability, demand for Coastal hog fuel will increase over the next decade, even if the size of the pulp and paper industry is static. As noted in section 3, Hillside Industrial Park is a competitive location as a collecting point for woody biomass from the entire Strait of Georgia region. That means that additional hog fuel could be economically imported to HIP and processed. Additional

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material would increase the economy of scale of a hog fuel processing plant. At a certain scale – roughly 200,000 ODT per year – the minimum economy of scale is reached for a co-generation or wood pellet plant. Chart 6.2.2b illustrates the supply of residual biomass across the Coast region.7 Category B is hog fuel. According to the BC Hydro inventory, there are approximately 1.75 million m3 of hog fuel (1.25 million wet tonnes) generated annually in the Coast region. That volume is projected to increase to nearly 2 million m3 over the long term. Chart 6.3.2b: Woody Biomass Supply for Coast Region

Wood Based Biomass Energy Potential of B.C., BC Hydro, November 2010 Approximately 150,000 tonnes of wet biomass is generated annually along South Howe Sound. That volume represents 12% of hog fuel generated in the Coastal region. The equivalency in the cost of delivering residual biomass anywhere in the Vancouver-Lower Mainland-Vancouver Island region means that the cost of accumulating the region’s residual biomass is the same for all locations. Expressly, the Sunshine Coast is not at a cost disadvantage as a location for accumulating residual biomass. Currently, there is a surplus of hog fuel in the Coastal region. The supply is expected to increase by 12.5% by 2017. With a near zero cost for the hog fuel, if a large scale processing plant, pellet factory or co-generation operation had a viable business case, the cost of furnish delivered to the site is currently highly favourable. A business case analysis would also have to examine scenarios in which the cost of hog fuel rises from its current zero value to incremental values.

7 Includes Haida Gwaii and the North Coast but most fibre is from Vancouver Island, Sunshine Coast and the Lower Mainland.

Opportunity Analysis: If a hog fuel processing plant, co-generation plant or wood pellet plant in the Strait of Georgia region is economically viable, then HIP is a competitive location.

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The most decisive factor in investment in a co-generation or pellet plant is a guaranteed source of suitable fibre. The only way a long term supply could be assured is from accumulating hog fuel and other fibre sources at one location somewhere on the Strait of Georgia. Hillside IP is in a most favourable location as the accumulation site. A co-generation plant does not ship products out, and so HIP’s isolation would not be a factor. The cost of barging bulk products, such as processed hog fuel or wood pellets, to the Port of Vancouver is likely not significantly damaging to the business case.8

6.3.3 HOG FUEL PRODUCTION Hog fuel is sold primarily to pulp and paper mills, but it can be used in any boiler that produces heat, steam or electricity, provided that salt is eliminated. The bark, sawdust and wood fragments in the material must be screened before use as a fuel. Grinding of bark and wood is required in the process. Moisture content must be reduced from 55% (or more) in green material to 30%, the minimum standard for use as a fuel. The price for hog fuel is highly variable. As recently as 2007, unprocessed hog fuel sold for as much as $16 per oven dry tonne (ODT). Currently hog fuel producers have trouble giving it away. Coastal consumers of Merritt hog fuel derived from dead standing timber are paying the equivalent of $70/ODT delivered.9 This Interior fibre has a moisture content of 30%, equal to the moisture content of pressed coastal hog fuel. Coastal furnish contains far more bark than the Interior furnish, which lowers its comparative value. The utility and presumably the value of Coastal hog fuel is raised by grinding and pressing it to reduce moisture content. We cannot forecast what the market value of a tonne of processed, ready to burn hog fuel will be in 5-10 years. The BC Hydro report estimates a cost of $24 per MWh for delivered sawmill residue. That is $33.60 per tonne of furnish. Processed hog fuel made from log sort waste must sell for less than sawmill residue in order to be competitive. We arbitrarily pick $20.00 per tonne for processed sorting yard hog fuel, because that figure 8 Our contacts in the wood pellet industry did not think that transportation costs for HIP were significantly detrimental to a business case. The presence of barge transfer facility was listed among HIP’s competitive advantages. 9 Biomass Availability Study, Envirochem Services Inc., 2012. We are uncertain if $70/ODT is being paid for hog fuel. That is the wood chip price. We were unable to get reliable cost figures from industry, as they are considered proprietary.

Woody Biomass Demand and Supply Summary: On the basis of research and conversations with spokespersons for the forest, district energy and small scale power generation sectors, our preliminary conclusion is that the supply and demand scenario for raw hog fuel is highly uncertain and volatile. It seems clear that there are very limited sales opportunities for at least five years. The prospects for fuels made from processed hog fuel are uncertain also, but somewhat more promising. Wood pellet manufacturing is forecast to increase and demand for clean, thermally efficient bio-fuels is predicted to grow substantially. On the supply side, the glut of Interior fibre will decline rapidly beginning in 2015. Most industry analyst forecast tightening of the gap between supply and demand in about five years.

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is well below the delivered cost of sawmill residue (wood chips, shavings, wood fragments and bark) and likely high enough to make hog fuel processing financially viable. The 120,000 processed tonnes of hog fuel generated annually at Howe Sound sorting yards will yield approximately 82,000 oven dry tonnes equivalent. At $20/ODT, gross revenues of $1,640,000 are generated annually. The primary capital cost item is a press. A press costs $4-$5 million.10 Operating expenses are not significant, because material processing through a constant press-and-ship stream replaces labour and equipment use that previously piled, sorted, moved and shipped an un-used by-product. There is only a small operating cost increment. The capital investment would be returned in 3-4 years. This very crude evaluation suggests that $20/ODT would earn a profit. That is, if there are buyers, which at present there are not. Another way to assess the value of a tonne of processed hog fuel is to calculate the power it is capable of generating. The electricity generated from combustion of the 82,000 tonnes, at 0.72 ODT/MWh, is roughly 114,000 MWh.11 To put that into perspective, that is enough power to supply 11,400 homes year round.12 That is not enough energy (combination of heat and power) to operate even a single pulp mill. Nor is it enough to achieve a viable economy of scale for a co-generation or biodiesel plant. The BC Hydro study estimates that the cost per MWh for electricity generated from hog fuel is $105. That is roughly 30% more than the retail cost for power in BC. It is clear now why use of the heat generated is required to make a co-generation plant viable. The volume of processed hog fuel generated from Howe Sound sorting yards is not sufficient to justify a power plant or a wood pellet plant. There is enough volume to make a basic or a refined processing plant viable.13 A processing operation can be set up on paved ground with minimal development costs. Howe Sound operators are looking for disposal solutions, so the cost of furnish will be highly competitive. According to many sources, the demand for quality biofuels will increase. Business case analysis should look at Hillside Industrial Park costs of production and the cost of the product delivered by barge to the Lower Mainland and Vancouver Island.

6.3.4 CO-‐GENERATION PLANT A co-generation plant has the advantage that no products are shipped. Hillside Industrial Park is as good a location as any on the BC coast for locating a biomass-fuelled power

10 Howe Sound Pulp and Paper has presses and local forest sector enterprises are experimenting with pressing hog fuel. 11 Wood Based Biomass Energy Potential of B.C., pg 8. 12 The processed material would yield its energy in the form of heat and electrical power generation, so the illustration provides a measure of equivalency, not actual electricity output. 13 The basic product would be suitable for the pulp and paper industry. The refined product would be suitable for any district energy and industrial energy uses.

Opportunity Summary: It is unlikely that selling processed biomass will be viable for at least the five years. Should it become a viable endeavor, businesses that produce hog fuel will likely seize the opportunity.

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plant. Power could be fed directly to the BC Hydro grid, which runs through HIP. However, a co-generation plant is not economical unless the generated heat can be sold.14 A Carlson Small Power Consultants “Biomass Cogeneration Feasibility Study” states that over 40 feasibility studies have shown “that applying biomass power in a combined heat and power application, if possible, has dramatically better economics than a standalone application with no substantial steam customer.”15 Co-generation plants attached to some form of wood processing facility have a significant advantage over new facilities. The existing facility enables them to amortize the cost of generators and capital upgrades to the facility over a much shorter time period. “New bio-energy plants typically require 15-20 years to amortize the cost of construction.”16 A commensurate challenge to building new co-generation plants is the need for a long term, secure supply of fibre. Mary Bauto 17 reports that several proposals for new co-generation plants on Vancouver Island failed due to lack of secure fibre supply. The minimum operating capacity for a bio-fuelled co-generation plant is 150,000 lb/hr of steam pressure operating nearly continuously. The fibre requirement for a plant of that size is 140,000 ODT per year. Assuming 50% moisture content in biomass, a minimum 280,000 tonnes/year of raw biomass is required. That volume exceeds the Howe Sound annual hog fuel generation by 120,000 wet tonnes. There are approximately 1.1 million wet tonnes generated in the Coastal region, outside of Howe Sound. Only 10% of that volume would have to be dependably secured. The supply could be augmented by use of roadside logging waste generated in logging operations on the Sunshine Coast. A plant at the minimum feasible scale would produce 24 mega-Watts and yield about 200,000 MWh annually. Based on a business case model in the BC Hydro provincial biomass study, the fixed investment cost per megawatt is between $4-5 million dollars, yielding a total fixed cost between $96-$120 million. With these high capital investment costs, it is clear why a secure, long term supply of wood (or other biomass supply) is demanded. Profit is calculated at 4% of fixed costs. However, when the economics of co-generation strongly favour use of both of electricity and heat, the obvious best use of local residual biomass is for Howe Sound Pulp and Paper’s combined mill and generating facility. In other words, there already is a co-generation plant on Howe Sound. Furthermore, given that a decades-long supply of fibre must be guaranteed to a co-generation plant, would anyone invest in a plant that is virtually next door to a large consumer of furnish? It seems rational that HSPP should wish to retain access to a large, local source of biomass. For these reasons, even if the economics of a co-generation plant at Hillside Industrial Park are sound, competition for fibre makes a second plant unlikely and possibly even undesirable.

14 Approximately 60% of the energy from burning biomass is in the form of heat. 15 www.portofpa.com/about/documents/BIOMASSCoGenfeasibilitystudy-‐3-‐24-‐09.PDF 16 “Wood Based Biomass Energy Potential of B.C.,” p. 6. 17 Operations Manager Port Alberni, Ministry of Forests, Lands and Natural Resource Operations

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6.3.5 WOOD PELLET PLANT The final option for the use of local and regional wood residues is a pellet plant. Canada’s pellet production capacity is nearly 3 million tonnes per year. Sixty-four percent of that capacity is in Western Canada. Total world annual consumption is 14.4 million tonnes, with Europe consuming 80%.18 The European and domestic markets are growing. Sales to Asia are expected to reach 5 million tonnes annually by 2020.19 Despite the recession, or because of it, demand in the United States and Canada increased faster than projected between 2008 and 2011.20 Gordon Murray, Executive Director of the Wood Pellet Association of Canada, commented that there is room for additional production capacity and, currently, markets are guaranteed for industry standard pellets. The primary advantages of pellets over other forms of woody biomass fuels are higher and more uniform energy density, convenient packaging and transportation, and low ash content. Generally, white wood from conifers is the preferred furnish. Bark has higher residual ash than white wood, and that is why its content is limited to less than 10%. Stove pellet furnish must be dried to a moisture content of 15%. That means that pressing water from furnish is a first step. Kiln drying is also required. Roughly 10% of furnish is used to generate heat for drying the fibre. Typically, bark is used to generate heat. Dry bark may also constitute 10% of the pellet fibre. The industry is examining methods to utilize more bark in pellets and to eliminate salt from water transported fibre. Stove pellet production requires very large volumes of fibre and ample space to store fibre under cover. Approximately 30 acres are required to accommodate a plant and storage area. A minimum 10 MW of power is required. Direct loading on to ocean-going vessels is the most competitive business model. A plant at HIP could arrange to use Howe Sound Pulp and Paper’s loading facility or load from barges onto vessels moored near HIP. The appropriate scale of a pellet plant depends on its market (households vs. industry; North America vs. Europe/Asia). The smallest economical scale is 30,000 tonnes of production annually, when there are dedicated, proximate markets. Most plants that supply the domestic household market produce around 75,000 tonnes per year. The product is shipped in 20 or 40 kilogram bags. The minimum scale for a wood pellet plant on Howe Sound, that serves the large and growing European and Asian industrial markets, is production of 200,000 tonnes per year.21 Average production for plants in

18 Wood Pellet Association of Canada, website publication 19 News brief from Wood Resources International LLC; www.woodprices.com 20 Several sources, among them Techno-‐Economical Analysis Of Wood Pellets Production For U.S. Manufacturers, Adrian Pirraglia, Ronalds Gonzalez, and Daniel Saloni, BioResources.com. 21 Conversation with Gordon Murray, Executive Director Wood Pellet Association of Canada. Two hundred thousand tonnes is roughly four freighter loads. Storage space for 50,000 tonnes of pellets and double that volume for furnish would be required. Smaller scale business models should not be ruled out.

Opportunity Analysis: There are plans by industry to increase pellet production on the West Coast by 500,000 tonnes annually over the next few years. These firms are looking for plant locations.

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Western Canada is 118,000 tonnes/year. The largest plant produces 400,000 tonnes/year. One tonne of raw woody biomass produces half a tonne of pellets. Therefore, at the minimum production scale 150,000 tonnes of furnish is required. At the minimum foreign sales scale, 400,000 tonnes of furnish are required. Table 6.3.5 shows how much of the furnish could come from local sources and how much would have to be imported. Table 6.3.5: Fibre Requirements for Wood Pellet Plant at Minimum Scales (tonnes)

Pellet Output

total furnish bark white wood local furnish

imported furnish

75,000 150,000 30,000 120,000 105,000 45,000 200,000 400,000 80,000 320,000 150,000 250,000

The calculations presume that 20% of the furnish may be bark, with half of the bark used for drying and half for pellet production. Howe Sound furnish is presumed to be 50% bark. A plant at the smaller scale could utilize 30,000 tonnes of bark and 75,000 tonnes of white fibre generated at HIP. An additional 45,000 tones of white fibre would be required. At the larger scale, all of the bark from local furnish is used. However, that means 250,000 tonnes of white fibre would have to be imported annually. Local roadside logging waste would be another source of fibre. According to Pirraglia et al, the capital cost for a 75,000 tonne/year facility is $12 million.22 Annual operating costs are estimated at $6.5 million. These are estimates in U.S. dollars with U.S. materials and labour costs. The study found that a pellet price of $221/tonne was necessary to earn 4% on capital. The capital cost of a 200,000 tonnes/year pellet plant is approximately $30 million.23 A competitive price for pellet mill furnish is $40.00 per oven dry tonne24. Payment for raw furnish is calculated on sampling for moisture content and is made for equivalent oven dry tonnes. Presuming 50% moisture content, a pellet manufacturer should be willing to pay $20.00/wet tonne for acceptable biomass. Local biomass could be supplied for that price. An assessment of the cost to deliver a tonne of residual biomass to Howe Sound needs to be made if this business model is further investigated. It is certain that a pellet plant or plants will be built in the Coastal region in the near future. The consultant toured Hillside Industrial Park with an agent25 who is working with investors to find a location for a large (minimum 150,000 tonnes/year) pellet production plant. According to the agent, the most important factor is a dependable, long term fibre supply. Fibre will be supplied by barge shipments of regional residues and from roadside waste at logging operations. HIP is, according to the agent, well situated for receiving barge shipments.

Modular pellet plants operate at a range of scales. The large plant is required if international markets are supplied. 22 Pirraglia et al. Other sources agree with the Pirraglia study, which is the most thorough found. 23 Processco; www.processco.net/pdf/Wood%20pellet%20Costs.pdf. A plant capacity of 22 tonnes per hour produces 200,000 tonnes/year. 24 Gordon Murray and supported by several other sources including Wood Chip and Wood Pellet Feasibility Study, Annapolis Digby Economic Development Agency, 2008. 25 August 6, 2013.

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The agent spoke of HIP as competitive on many key factors. There is deep water access at HIP and HSPP has an ocean port capability that could potentially be used. City Transfer’s barge terminal provides an essential service. The main BC Hydro grid is nearby and there is the capability of direct industrial supply from the grid, which has a discounted rate. A thirty acre site is required. HIP is closer to the Lower Mainland transportation hub than alternative locations under consideration. The agent listed HIP’s competitive disadvantages. They are 1) competition for fibre from an adjacent pulp mill, 2) the high cost of environmental permits and 3) the high costs of site preparation. A pellet plant would require 200,000 gallons of water per day. That in itself is a significant environmental issue. The cost to build a water treatment plant was estimated at $5 million. We were told that cost eliminates HIP from consideration as a location for a pellet plant. If the cost of the water treatment plant was shared, an investor might consider HIP as a location.

6.3.6 SUMMARY OF WOODY BIOMASS OPPORTUNITIES We have provided an over-view of several scenarios for industrial use of biomass generated at Hillside Industrial Park and included scenarios that require importation of addition material. Our purpose was to assess HIP’s competitive advantages and disadvantages so that a preliminary determination could be made of whether or not HIP has any potential to attract investment in the next 5-10 years. Our conclusions: 1. The most obvious use of Howe Sound sorting yard biomass is furnish for the Howe

Sound Pulp and Paper mill. This solution does not generate economic benefits beyond relieving sorting operations of a costly by-product and possibly providing a revenue stream.

2. Mechanical processing of hog fuel yields a product that is likely to be used only by the pulp and paper industry. There may be a market for that product after 2016.

3. Processing of biomass into a refined fuel (as described in 6.3.2) may be economically viable. This may be the best biomass opportunity.

4. A stand alone co-generation plant is not economically viable. 5. HIP is a suitable location for a wood pellet plant. However, the cost of site

development, especially water treatment, diminishes its attractiveness.

Opportunity Summary: The BC stove pellet industry is expanding. As a result of this assignment, Hillside Industrial Park was considered as a location and deemed to be unsuitable due to high site preparation and water treatment costs.

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Approval Date: Resolution No.

Amendment Date: Resolution No.


TERMS OF REFERENCE

Hillside Development Group Advisory Committee (HIDEGRO)

1. Purpose 1.1 The purpose of the Hillside Development Group is to advise the SCRD Board and staff

on achieving the goals for Hillside Industrial Park which include: a. The positive co-existence of industry, the environment and existing housing in

Hillside Industrial Park and vicinity. b. Facilitation of employment and stable well paying jobs in Hillside Industrial Park. c. Strengthen the SCRD tax base through the attraction of investment to Hillside

Industrial Park. d. Position Hillside Industrial Park as a sustainable and attractive entity which serves

as a model to visitors and others.

2. Duties 2.1 The Hillside Development Group will:

a. Review staff and consultants reports b. Advise on plans, policies or guidelines for the effective operation and long term

planning of Hillside Industrial Park c. Advise on budgetary matters which may include special projects d. Provide business and marketing leads or suggestions e. Promote the goals of Hillside Industrial Park through informal networking f. Volunteer professional and business expertise at HIDEGRO meetings.

2.2 The Committee exists at the pleasure of the Board and may be reconstituted as

required.

3. Membership 3.1 The “Hillside Development Group” is comprised of the following members appointed by

the SCRD Board:

a. The SCRD Board Chair

b. Three Directors of the SCRD Board (Area F, Gibsons and one other) c. The Chair of the Hillside Industrial Park Owners and Tenants Association (HIPOTA) d. Up to sSix (6) representatives of the general public.

3.2 The SCRD Director (other than Area F and Gibsons Directors) shall be appointed

annually.

3.3 All other members shall be appointed for two year terms and may be re-appointed.

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ANNEX D

Terms of Reference – Hillside Development Group (HIDEGRO) 2

3.4 Members representing the general public should be qualified or experienced in one or

more of the following areas: forestry practices, operations and regulations, manufacturing, value added production, marketing, environmental issues and regulations, ports, engineering, real estate, land use planning, investment and finance or project management.

3.5 The Chair and Vice Chair will be elected by the Committee annually.

3.6 Regional District staff may be assigned to serve in a liaison capacity. The role of the

staff liaison may include: a. Hiring consultants and contractors subject to SCRD policies and procedures; b. providing information and professional advice; c. facilitating and/or co-chairing meetings; d. assisting the committee secretary in writing reports and recommendations to the

Board as requested by the committee; e. bringing such matters to the committee's attention as are appropriate for it to

consider in support of Regional District Board direction; f. serving as one of the communication channels to and from the Board; and g. providing advice to the Board that is at variance to a committee recommendation.

4. Operations 4.1 A quorum of the Committee will be four (4) members, of which two (2) must be public

representatives. 4.2 HIDEGRO will meet quarterly or at the call of the Chair. 4.3 All recommendations of the Committee will be passed by a majority of members

present. 4.3 All Committee meetings must be open to the public except where the committee

resolves to close a portion of it pursuant to the Community Charter. 4.4 The authority of the Committee is limited as follows:

a. HIDEGRO does not have the authority to bind the SCRD in any way, nor engage or otherwise contact third parties, consultants, organizations or authorities in a manner which may appear to be officially representing the SCRD.

b. HIDEGRO may communicate with external organizations and agencies to collect information and make inquiries.

c. Where HIDEGRO wishes to express opinions or make recommendations to external

organizations and agencies, it must first obtain authorization from the SCRD Board.

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Terms of Reference – Hillside Development Group (HIDEGRO) 3

4.5 Committee members are encouraged to:

a. attend and participate in meetings of the Committee b.a. share experiences and ideas while maintaining an open mind to others’

perspectives c.b. report back to the appropriate Standing Committee and Regional District staff d.c. be able to dedicate approximately 2 hours per month to the work of the Committee

4.6 Members who are absent for four three consecutive regularly scheduled meetings will

be deemed to have resigned their position unless the absence is because of illness or injury or is with the leave of the SCRD Board (or Committee Chair??).

4.7 In carrying out its mandate, the Committee will work towards conducting operations in a

way that:

a. improves the economic, environmental and social well-being for present and future generations;

b. encourages and fosters community involvement; c. enhances the friendly, caring character of the community; d. maintains an open, accountable and effective operation; e. preserves and enhances the unique mix of natural ecosystems and green spaces in

the SCRD; f. is consistent with the goals and objectives of the SCRD’s strategic plan; and g. recognizes advisory committees are one of many channels that the Regional Board

may utilize to obtain opinions and advice when making decisions. 4.8 The SCRD will provide a recording secretary whose duties will include:

a. organizing meeting logistics e.g. location, supplies, equipment b. preparing meeting agendas and distributing them to the Committee members in

advance of the meeting c. preparing minutes of all meetings using SCRD standard practices d. forwarding the minutes to the Committee Chair for review prior to submitting to the

appropriate Standing Committee e. forwarding the approved minutes to the Planning & Development Committee for

further consideration and approval. 4.9 Unless otherwise provided for, meetings shall be conducted in accordance with the rules

of procedure set out in the Board Procedure Bylaw.

4.10 Committee members are subject to the Conflict of Interest legislation outlined in Section

100 – 109 of the Community Charter. The terms “Council” and “Committee” shall be interchangeable for the purpose of interpretation of these sections.

4.11 Committee members must respect and maintain the confidentiality of the issues brought

before them in closed meetings.

4.12 Committee members serve without remuneration but may be eligible to have reasonable expenses reimbursed in accordance with the SCRD Policy on Committee Volunteer Meeting Expenses.

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Approval Date: Resolution No.



5. Reference Documents 5.1 SCRD Procedure Bylaw No. 474 5.2 Community Charter, Section 100 – 109 – Conflict of Interest 5.3 Community Charter, Section 90 – Open/Closed Meetings

58

Susan Hunt

Subject: FW: Fw: Visit and Meeting re development of the Chilliwack Industrial Park(s)

From: Mayor GaetzSent: Tuesday, September 24, 2013 9:00 AMTo: mailto:tretickteIus.netSubject: RE: Visit and Meeting re development of the Chilliwack Industrial Park(s)Hi Gerry,

It was great to see you at the UBCM’s AGM last week. I have forwarded your email to Zoya Stoochnoffwho is my executive assistant and she will try to set this up for you. You should be hearing from hershortly!

Looking forward to seeing you again,

Sharon

:

CHILLIWACKSharon Gaetz Mayor AdministrationP: 604.793.2900 F: 604.792.2561 E: [email protected]

City of ChiNiwack8550 Young Road, Chilliwack, BCCanada V2P 8A4www.chilliwack.com

From: [email protected] [mailto :tretick©telus,net]Sent: Friday, September 20, 2013 11:15 AMTo: Mayor GaeI2Subject: Visit and Meeting re developement of the Chilliwack Industrial Park(s)

The following message was sent to you through www.chilliwack.com:Date: September 20, 2013 11:14 AMFrom: Gerry Tretick (tretickctelus.net)To: Sharon Gaetz (aaetzchilliwack.com)IP: 209.121.36.33Phone: 6048860663Page Reference: All Contacts

Mayor GaetzIt was a pleasure to meet you at UBCM.I am following up on my request to have a small group of our Regional Directors visitwith you and the people responsible for the successful development of yourIndustrial Park in Chilliwack.We have a Industrial Park (Hillside) which is struggling to meet its potential and I amhopeful your experience in Chilliwack will give us some insight on where and what todo to make progress with our plans.

1

ANNEX E

59

PLease let me know how and when you see this possibly happening. It may takesome juggling by both you and us since there are scheduled events for both parties,Thanks for be so accommodating.Gerry TretickCouncillor - Town of Gibsons and Director on the SCRD Board

My Town email is [email protected]

2

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SCRD STAFF REPORT

DATE: September 27, 2013

TO: Special Planning and Development Committee – (October 10, 2013)

FROM: David Rafael, Senior Planner

RE: Proposed AMENDMENT BYLAWS 310.152 AND 337.106 REGARDING EXEMPTION OF 11 METRE HEIGHT LIMIT FOR WINDMILLS

RECOMMENDATIONS 1. THAT the report titled “Proposed amendment Bylaws 310.152 and 337.106

regarding exemption of 11 metre height limit for windmills” be received; 2. AND THAT the Board direct staff to hold any building permits for windmills a

further 60 days; 3. AND THAT the Board give Bylaw 310.152 and 337.106 First Readings; 4. AND THAT the following agencies be consulted:

a) All Electoral Area Advisory Planning Commissions b) Roberts Creek Official Community Plan Committee c) Squamish Nation d) Sechelt Nation e) Ministry of Transportation and Infrastructure

5. AND THAT a Public Hearing be Scheduled for November 19, 2013 to be held at the SCRD Board Room, 1975 Field Road, Sechelt starting at 7:00 pm;

6. AND THAT the Board delegate a Chair and Alternate Chair; 7. AND FURTHER THAT the recommendations be forwarded to the SCRD Board

meeting of October 10, 2013 for consideration.

BACKGROUND The SCRD recently reissued a building permit for a windmill to generate electricity for a single dwelling in Roberts Creek (Electoral Area D). The tower would be about 18 metres (60 feet) height (including the blades and due to regulations in Bylaw 310 (for Electoral Areas B to F) is exempt from the general height restriction for building and structures which is 11 metres (36 feet). The same exemption is contained in Bylaw 337 for Electoral Area A)

The project raised significant concerns amongst the site’s neighbours and the proponent relocated the windmill on the property to try to minimize impact.

At the September 12, 2013 Board the following resolution was adopted:

395/13 THAT the Chief Building Inspector and Bylaw Manager and Senior Planner’s report dated August 7, 2013 titled “Regulation of Wind Power Generation Structures” be received;

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ANNEX F

Staff Report to Special Planning and Development Committee (October 10, 2013) Regarding Bylaws to remove height exemption for windmills Page 2 of 6

\\scrd.ad\files\networkfiles\Land Administration\3360 Zoning & Rezoning Bylaw 310\3360-20 310.152\2013-Oct-10 Special PDC Bylaws 310.152 and 337.106 windmill.docx

AND THAT staff research and prepare a zoning bylaw amendment for such structures and others with a view to incorporate these regulations into the Zoning Bylaw;

AND THAT staff investigate how these amendments and applications will affect the Noise Bylaw;

AND FURTHER THAT any future applications for wind generator turbine structures be temporarily set in abeyance, pursuant to LGA section 929, (1) and (2), until staff have been able to report back with regulatory options regarding these kinds of structures.

Section 929 (Attachment B) allows for the local government (SCRD) to withhold issuing a building permit if a bylaw is in preparation 7 days before the building permit application is received where the development is contrary to the terms of the bylaw. The SCRD can hold the building permit so long as within 30 days of its receipt the SCRD Board directs the permit be withheld for a further 60 days or issued. If the bylaw is not adopted within 60 days then the owners of the land for which a building permit was withheld under this section are entitled to compensation for damages arising from the withholding of the building permit.

Both zoning bylaws do not define “windmill” and as such a “wind tower” structure is considered to fall within the scope of what a windmill could be. Both use wind to move blades that are then uses to create power (either electricity or mechanical – such as a grinding stone or water pump).

At present there are no similar building permit applications submitted to the SCRD.

DISCUSSION Staff have commenced a review of possible bylaw amendments to limit the impacts of windmills or wind towers that are proposed for electricity generation or other uses. However, given the tight timelines set out in the Local Government Act that allow for up to 90 days from initiating placing building permits on hold, there is an urgency to move forward with a bylaw amendment to Zoning Bylaw No. 310. Staff suggest a similar amendment is also initiated for Zoning Bylaw No. 337.

Rather than propose complex controls at this time, staff suggest that a simple amendment be considered for both zoning bylaws that would remove the 11 metre height exemption for windmills. Anything more complex is likely to attract significant discussion and is likely to take more time that could be available.

Drafts of Bylaw 310.152 and 337.106 are included in Attachment A that propose amendments to the relevant sections regarding Height of Buildings and Structure to remove the exemption for “windmills on parcels of 4000 square metres or more”.

Staff reviewed the 7 Official Community Plans (OCP) in the SCRD and none establish a height exemption for windmills. The only one that specifically references support for relaxing height restrictions for green power projects of a small scale (0.05 MW) is the Roberts Creek OCP (RC OCP) that contains the following policy:

12.4 For small scale, household level green power projects (less than 0.05 MW generation capacity), the SCRD shall consider reducing the fee for development variance permits or development permits that are subject to Development Permit Area (Stream Habitat), and restrictions of structure/building height could be relaxed.

The RC OCP also notes the need for a public process for larger projects.

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Staff consider that the policy does not impede the proposed amendment set out in Bylaw 310.152 as the proponent can apply for a variance to increase the 11 metre height limit and the policy would lend support but also allow for public consultation.

Staff suggest that Bylaw 310.152 and Bylaw 337.106 should receive 1st and 2nd readings and that referrals are sent to the following agencies:

a) All Electoral Area Advisory Planning Commissions

b) Roberts Creek Official Community Plan Committee

c) Squamish Nation

d) Sechelt Nation

e) Ministry of Transportation and Infrastructure

Staff suggest that a Public Hearing be scheduled for 7:00 pm on November 19, 2013 to be held in the SCRD Board Room at 1975 Field Road, Sechelt. This would be 40 days into the 60 day period and the bylaws could be considered for 3rd Reading and adoption at the Board meeting on November 28, 2013 (day 49 of the 60 day period).

Staff should also be directed to hold any building permits for windmills a further 60 days as the Board meeting in October 10, 2013 would be 28 days into the 30 day period.

The time will allow for the SCRD to receive input from the above agencies and allow time for staff to apprise the Board of any significant issues that would require it to reconsider the timetable as proposed.

_________________________ David Rafael, Senior Planner

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ATTACHMENT A

SUNSHINE COAST REGIONAL DISTRICT ZONING AMENDMENT BYLAW No. 152, 2013

A bylaw to amend the "Sunshine Coast Regional District Zoning Bylaw No. 310, 1987". The Board of Directors of the Sunshine Coast Regional District, in open meeting assembled, enacts as follows:

PART A - CITATION

1. This bylaw may be cited as the "Sunshine Coast Regional District Zoning Bylaw No. 310.152, 2013".

PART B – AMENDMENT 2. Sunshine Coast Regional District Zoning Bylaw No. 310, 1987 is hereby amended by removing “,

windmill on parcels of 4000 square metres or more” from Section 503 (3) to read: “(3) Church spires, chimneys, flag poles, masts, aerials, fire hall hose drying towers, water tanks, domes, public monuments, observation towers, transmission towers, elevators and ventilation machinery and farm buildings including silos, shall not be subject to the height requirements of this bylaw provided that such structures occupy no more than 10% of the surface of the parcel, or if situated on a building, not more than 15% of the roof area of the principal building.”

PART C - ADOPTION READ A FIRST TIME this DAY OF MONTH YEAR READ A SECOND TIME this DAY OF MONTH YEAR APPROVED PURSUANT TO Section 52 of THE TRANSPORTATION ACT this DAY OF MONTH YEAR PUBLIC HEARING HELD PURSUANT TO THE LOCAL GOVERNMENT ACT this DAY OF MONTH YEAR READ A THIRD TIME this DAY OF MONTH YEAR ADOPTED this DAY OF MONTH YEAR

____________________________ Corporate Officer ____________________________ Chair

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SUNSHINE COAST REGIONAL DISTRICT

ZONING AMENDMENT BYLAW No. 106, 2013 A bylaw to amend the "Sunshine Coast Regional District Zoning Bylaw No. 337, 1990". The Board of Directors of the Sunshine Coast Regional District, in open meeting assembled, enacts as follows:

PART A - CITATION

1. This bylaw may be cited as the "Sunshine Coast Regional District Zoning Bylaw No. 337.106, 2013".

PART B – AMENDMENT 3. Sunshine Coast Regional District Zoning Bylaw No. 337, 1990 is hereby amended by removing “,

windmill on parcels of 4000 square metres or more” from Section 513 (3) to read: “(3) Church spires, chimneys, flag poles, masts, aerials, fire hall hose drying towers, water tanks, domes, public monuments, observation towers, transmission towers, elevators and ventilation machinery and farm buildings including silos, shall not be subject to the height requirements of this bylaw provided that such structures cover no more than 10 percent of the parcel or, if situated on a building, not more than 15 percent of the roof area of the building.”

PART C - ADOPTION READ A FIRST TIME this DAY OF MONTH YEAR READ A SECOND TIME this DAY OF MONTH YEAR APPROVED PURSUANT TO Section 52 of THE TRANSPORTATION ACT this DAY OF MONTH YEAR PUBLIC HEARING HELD PURSUANT TO THE LOCAL GOVERNMENT ACT this DAY OF MONTH YEAR READ A THIRD TIME this DAY OF MONTH YEAR ADOPTED this DAY OF MONTH

_____________________________ Corporate Officer _____________________________ Chair

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ATTACHMENT B LOCAL GOVERNMENT ACT [RSBC 1996] CHAPTER 323

Part 26 — Planning and Land Use Management Division 1 — General

Withholding of permits and licences that conflict with bylaws in preparation 929 (1) A local government may direct that a building permit be withheld for a period of

30 days, beginning on the day the application for the permit was made, if it passes a resolution identifying what it considers to be a conflict between a development proposed in the application for a building permit and

(a) an official community plan, or

(b) a bylaw under sections 903 to 907 or 910

(STAFF NOTE: section 903 refers to Zoning Bylaws)

(c) [Repealed 2000-7-170.]

that is under preparation.

(2) Subsection (1) does not apply unless a local government has, by resolution at least 7 days before the application for a building permit, begun the preparation of a plan or bylaw that is in conflict with the application.

(3) During the 30 day period referred to in subsection (1), the local government must consider the application for the permit and may

(a) direct the permit be withheld for a further 60 days, or

(b) grant the permit, but impose conditions in it that would be in the public interest, having regard to the plan or bylaw that is under preparation.

(4) If the local government does not adopt a plan or bylaw referred to in subsection (1) within the 60 day period, the owners of the land for which a building permit was withheld under this section are entitled to compensation for damages arising from the withholding of the building permit.

(4.1) For the purposes of subsection (4), Division 3 [Expropriation and Compensation] of Part 8 of this Act applies in relation to a regional district and Division 4 of Part 3 of the Community Charter applies in relation to a municipality.

(5) A council that passes a resolution under subsection (1) may direct that a business licence in respect of the same land be withheld for a period not longer than 90 days, if the council considers that the use to which the land would be put and to which the business licence application relates would be contrary to the use that would be permitted by the bylaw that is under preparation.

(6) Any requirement to approve a permit or licence under this section is subject to section 946.2.

Staff Note: section 946.2 refers to subdivisions for a residence for a relative.

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