CN talks, no deal yet

Photo: Contributed - Okanagan Rail Trail Society

A deal to purchase the abandoned CN Rail corridor between Kelowna and Vernon is not close to being completed.

That according to Doug Gilchrist, Kelowna Real Estate Divisional Director.

Speaking on comments made by Mayor Walter Gray and City Manager Ron Mattiussi following Monday's council meeting, Gilchrist says he can't say a deal is close.

"I don't want to say close because that means different things to different people," says Gilchrist.

"There are some important pieces that still remain... but the parties are working together. It's not adversarial."

Negotiations have been ongoing for several weeks involving Kelowna, Lake Country, Coldstream and the Regional District of North Okanagan and CN Rail for purchase of the corridor.

It's believed the asking price is $50M, or slightly more than $1M per kilometre for the 49 kilometre rail corridor.

"We are making good progress of the terms of what ultimately will be an acquisition agreement, but no, it's not a done deal," adds Gilchrist.

"We are very positive and hopeful it will conclude. One way or another the full intention of the inter-jurisdictional team is to acquire the corridor unequivocally."

However, for Gilchrist to say the deal is going to be done this week, "I don't think is accurate."

The local jurisdictions have until next Monday to put forth a formal offer to purchase the rail corridor.

Gilchrist says come Monday, one of two things has to happen.

"We will either have an amicable purchase and sale agreement completed, and thereby the jurisdictions can pass on the referal and rely on the strength of a purchase and sale agreement, or we would request a net salvage value determination by the Canadian Transportation Agency.

If we don't have a deal I can fully recommend to council then we would go to the CTA. Neither of those is a bad thing."

Gilchrist says there is also interest from both the provincial and federal governments to get involved in the purchase, but adds there is nothing in writing from either senior level of government.

The local municipalities are hoping to get one-third contributions from both the feds and the province.

Gilchrist says both higher levels of government have similar challenges as local governments, and that's finding the funds to contribute.

As for the taxpaying public, Gilchrist says any tax impact is obviously a concern in negotiations such as these.

"Certainly the objective would be to have as minimal a tax impact as possible and that will vary in each jurisdiction. That will depend on what partners come to the table."