Completion of a 10-month review of a partnering agreement between the District of Sooke and Prestige Sooke Holdings Ltd. (Prestige) will see nearly $500,000 in financial relief provided to the District of Sooke to address a number of issues identified during the agreement review process. This agreement has been unanimously approved by Council, Mayor Wendal Milne announced today.
“The agreement review followed council’s commitment, after being elected, to review all contracts and agreements between the District of Sooke and its contracting partners,” Mayor Milne said.
The review was conducted by Lidstone & Company in consultation with council and district staff. Council, the Prestige and staff have subsequently been working to remedy issues identified during the review process.
“This review recognized that there were a number of administrative issues that were not dealt with correctly and/or in compliance with regulations and bylaws,” Milne said. “There were also a number of matters identified that related to the financial terms between the district and the Prestige.”
The review identified the following items and solutions which are currently being implemented.
• The Partnering Agreement payment of $300,000 per year for the years 2013, 2014 and 2015 will be reduced to $237,000 a year for a saving to the district of $189,000.
• The Prestige will provide to the District an additional year (2016) of conference facilities on the same terms as was provided for the initial five years of the Partnering Agreement with a value of $237,000 for a reduced fee of $1.
• As per the terms of the agreement, the Prestige was to contribute $200,000 toward construction of the pier at the hotel. The pier was built at a cost of $180,000 and as a result, the Prestige will reimburse the district for the remaining $20,000.
• Building permit fees were calculated incorrectly and as a result the Prestige will pay the district the $7,360 currently outstanding.
• Extra infrastructure costs incurred by the Prestige prior to Dec. 2011, on the boat launch ramp and pier area have not been paid to Prestige by the district. Through negotiation, this amount will be reduced from $294,903 to $256,438; a savings of $38,465. The district will pay Prestige the remaining $256,438 over two years.
• The district was aware that the development as constructed varied from the original Development Permit (DP). The district failed to have the DP amended to be consistent with the agreed upon changes. As a result the district is required to bring the matter before council and will work with the Prestige to correct this matter.
• Development Cost Charges (DCCs) were not collected in accordance with regulations and best practices. An arrangement was made to have DCCs paid in a future offsetting manner. Rather than being paid at building permit stage (2009) they were paid by offset with the yearly partnering payment (2011 and 2012) by the District of Sooke, contrary to the regulations. The $63,285 in outstanding DCCs owed by the Prestige will be paid immediately.
“This was a large, complicated project for the District of Sooke,” Milne said. “While it has at times been controversial, it is important that we put that behind us.” Milne emphasized that “The ownership of the Prestige Hotel has been very cooperative in the negotiation of the resolution of these issues. The Prestige Hotel is an important asset to the community and it is in all of our best interests that it succeeds.”
As part of the agreement review, a number of other items were addressed between the district and Prestige, including:
• The Prestige will provide the district a statutory right-of-way over the area of the boat launch turn around, in consideration of a payment of $1.00 by the District of Sooke.
• The district publically acknowledges that the district’s boat launch facility occupies one third of the Prestige waterfront yard and is a significant contribution to the community.
• The District will become a party to Tourism Victoria and will work with the hotel on implementation of a 2 per cent room tax.
• The district supports the Prestige on the development and use of a marina and fuel station as long as the interests of the district are protected.
• The district will work with the Prestige and BC Hydro on the promotion of art work on the electrical hut at the boat launch.
In summary, the total financial relief and benefit to the District negotiated as result of this review is:
From Prestige contribution to Pier – $20,000
Building permit fees incorrectly calculated – $7,360
Shared infrastructure cost savings – $38,465
Reduction in Convention Centre fees (three) years – $189,000
Additional Year of conference facilities $1. – $237,000
TOTAL – $491,825