Catalyst and Alberni do $5 million infrastucture deal

Catalyst Paper Corp. and the City of Port Alberni have swung a $5 million deal for the paper giant's wastewater treatment facility and land

The city of Port Alberni has reached a $5.75 million agreement-in-principle that will expand its wastewater treatment capacity by three times and secure a key road that will advance plans for a waterfront industrial truck route.

The agreement consists of two parts: acquisition of Catalyst’s 13.4-hectare wastewater treatment facility across the Alberni Inlet from its mill, and 3.9 hectares of land combined with a road dedication, key to the completion of an industrial truck route. The land runs from the Redford Street entrance to the Catalyst mill to the existing Harbour Road intersection with Argyle Street.

When the deal becomes final, the city will be eligible to draw on an $11.2 million federal grant announced in January of this year. That money will not be used to pay for this purchase. It will instead be used to pay for renovations and improvements to both the city’s existing sewage lagoon and the Catalyst lagoon.

The deal was announced at Monday evening’s city council meeting.

This agreement in principal is subject to completion of formal documentation and any government approvals that may be required.

“In the 25 years I’ve been here, it’s the biggest grant the city has ever received,” city manager Ken Watson said.

He explained the city will borrow $5.75 million from the Municipal Finance Authority (the “bank” cities borrow funds from) to fund the purchases from Catalyst.

Watson said negotiations to close this extremely important deal have been going on for more than a year, but the city has had its eye on Catalyst’s treatment facility (no longer used by the company) for much longer.

“We have seen for some time the absolute logic of this,” Watson explained.

As the negotiations developed, the two sides came to the conclusion they could reach a joint agreement for both the lagoon and the roadway.

“This initiative allows the city to address a vital infrastructure requirement and it enables our business to focus on core operations as we exit creditor protection in the near term,” said Catalyst president and CEO Kevin J. Clarke.

The final price is “a little more than what the city wanted to pay and probably a little less than what Catalyst wanted,” Watson said.

The city must upgrade and expand its sewage treatment capacity to remain in compliance with strict federal and provincial regulations and to handle population growth. “The lagoon is the most cost-effective way to do this,” Watson said.

He explained that “Plan B” — to construct a new treatment facility — would likely cost three times as much as the purchase from Catalyst.

The added bonus is the Catalyst lagoon is right beside the small, existing city wastewater lagoon.

Once the improvements are completed using the federal money, the city will be able to meet its wastewater treatment needs for many years to come, explained city engineer Guy Cicon.

More residents, businesses and industries will be able to hook into the system.

The upgrades will also improve water quality in the Alberni Harbour and Somass Estuary.

“We are going to boom,” said Port Alberni mayor John Douglas. “We are going to need the appropriate infrastructure to deal with that growth.”

He added the second part of the deal, the acquisition of the land and road dedication will be “an incredible investment for facilitating the development of the port,” while helping rid the uptown core of unwanted industrial traffic.

“Our port is pathetically underused as an international port,” Douglas said. “This is a golden opportunity that is perfectly positioned to develop import/export and trade in the central Vancouver Island region.”

He explained a dedicated truck route is key to expanding the port’s capacity to move people and goods to and from the mainland, and overseas.

The deal secures the north end of the roadway required to construct a dedicated truck route, a project which Douglas said is looking very positive.

City officials are also negotiating with Western Forest Products regarding obtaining road dedication for the southern portion of the route.

“I would like to see this project completed within the next two years,” Douglas said.

City officials agree that removing traffic from the Third Avenue corridor and funneling it onto a dedicated truck route is key to the revitalization of the uptown area.

Twitter.com/AlberniNews