Head of acquisition team still confident deal with CN Rail will go ahead

As Lake Country council is set to meet Tuesday, Doug Gilchrist says CN Rail will work with group to try and make $22 million deal a reality

  • Tue Mar 3rd, 2015 7:00am
  • News

The head of the inter-jurisdictional acquisition team attempting to purchase the old CN Rail corridor from Kelowna to Coldstream says he is confident the group will still be able to make a deal with CN despite challenges facing Lake Country in raising its portion of the $22 million deal.

Doug Gilchrist says he has met with CN Rail to discuss the ramifications of Lake Country’s failed alternative approval process and received assurances the deal can still be made.

“There is nothing definitive but we did have a meeting with CN and they seemed very amicable in terms of understanding our position that this is a bit of a challenge in what has been a complicated deal but a challenge that we will get past,” said Gilchrist. “They are willing to work with us and help out. We didn’t talk about any definitive changes (to the deal) because we don’t know what Lake Country council is going to choose to do to raise the money.”

The $22 million deal between CN and Kelowna, with Lake Country and the North Okanagan Regional District (NORD) as partners, is set to close March 31. However, Lake Country must find a way to raise $2.6 million after it failed to gain elector’s assent to borrow the money.

Gilchrist says the parties will meet later this week and will know more about how to move forward once Lake Country council decides what direction they can take to raise the final $2.6 million of its share.

“We’ll see what Lake Country council decides to do. We’re not sure what kind of extension might be necessary if they choose to go (to referendum),” said Gilchrist. “The AAP outcome was a huge disappointment for sure but we are still confident the deal can be completed to the benefit of all of the residents.”

Lake Country has indicated its preference is to take the request to borrow $2.6 million to voters in a referendum that would poll all residents, not just those that are opposed, as the AAP did. Lake Country council will meet Tuesday night and the inter-jurisdictional team is expected to sit down Thursday to plan its next steps.

Despite the challenges, Gilchrist says it has been a positive negotiation from the start.

“CN has been a very good partner along the way,” he said. “They continue to be understanding that there are always unanticipated things that happen in complex agreements.”

Kelowna, Lake Country and NORD have a tentative deal to acquire the CN Corridor for $22 million with Kelowna paying $7.6 million, Lake Country $5.2 and NORD just under $2 million and the balance expected to come from other levels of government.