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Race on to save CN Rail corridor deal despite no vote

Politicians and staff in Lake Country and Kelowna are scrambling to save CN Rail corridor purchase.
February 26, 2015 - 10:01 AM

KELOWNA - Whether it takes a referendum in Lake Country or Kelowna buying the whole thing outright, both politicians and staff in the two municipalities say they’re determined to find a way to make the CN Rail corridor purchase a reality.

“We see this as too good an opportunity to pass up,” said City of Kelowna's Andrew Gibbs, project manager for the acquisition team working on the deal. “Fifty years from now when it’s a great tourism and recreation trail for visitors, when it's a transportation corridor or maybe a fibre optics corridor for the valley, people then will say it was a smart decision. We need to act now to make this a reality.”

Lake Country Mayor James Baker said Wednesday, Feb. 25, the district remains committed to the purchase after council debated the results of the alternative approval process at a special meeting held Tuesday night.

On Monday, Lake Country announced its proposal to borrow $2.6 million to buy its share of the corridor was defeated by counterpetitions, forcing a referendum. However statutory requirements mean a referendum cannot be held before the deal’s current April 1 deadline.

Gibbs says he doesn’t see much problem with getting CN Rail to agree to an extension, something they will be discussing with the company this week.

“They’ve already granted us an extension before,” he said, describing previous negotiations with the company as cordial and professional. “I view this like buying a house. We’re motivated buyers and they are motivated sellers. The strength of this corridor is its length and continuity. If it’s broken up in small bits, it’s a different kettle of fish."

Lake Country is hoping to participate with Kelowna, Coldstream and Vernon, as well as the North and Central Okanagan regional districts, in the shared purchase of the CN Rail corridor running from Kelowna to Coldstream, decommissioned last year after sub-leasee Kelowna Pacific Railway went under.

CN Rail has agreed to sell the railroad right-of-way to the communities for $50 million, of which $28 million is in the form of a charitable donation tax receipt. The balance is split between the three communities based on the amount of land within their boundaries. Lake Country’s share is $5.1 million, of which it planned to borrow $2.6 million while Kelowna paid for the other half, allowing the district to pay it back over an unspecified time.

Gibbs deferred to the acquisition committee’s upcoming discussions but said an outright purchase of the entire Lake Country corridor would be an obvious solution.
“I mean we’re already halfway there so it’s certainly an option,” he said.

To contact the reporter for this story, email John McDonald at or call 250-808-0143. To contact the editor, email or call 250-718-2724.

News from © InfoTel News Ltd, 2015
InfoTel News Ltd

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