Editor's note:
On Monday, city council directed staff to issue a Request for Proposals regarding the sale of the former Sarnia General Hospital.
In September of 2014, five local investors had offered the city $1,000 to purchase the derelict site and develop it into Health Campus for local health agency offices, clinics, pharmacies, etc.
Below is a letter from the five proponents in response to council's decision.
Open letter to the taxpayers of Sarnia December 12th, 2016
Re: The old Sarnia General Hospital property
In September of 2014, The Mayor and Sarnia City Council entered into a legal agreement to sell the Sarnia General Hospital. After a public RFP, the City received one offer from a group whose commitment it was to remove the asbestos, demolish large portions of the existing buildings and develop a $15 million medical campus. Contrary to media reports by the Mayor, the asbestos removal and demolition was to be at the sole cost of the developer and the developer agreed to post a letter of credit for the full value of the removal and demolition. From the September, 2014 report to council: “Staff is very pleased with the security the proponents are willing to provide in order to ensure the cleanup is completed”.
The City had but one condition that would have allowed them to get out of the contract and that was upon receiving the blessing of the Province of Ontario to sell the lands. The Province, did, of course, grant that permission and by so doing created a contract that was binding on the City.
In March of 2015, at the re-zoning meeting that was to have ratified the proposal that Council endorsed by a vote of 7-1 back in September, the Mayor and Council chose not to deal with the re-zoning. Instead, Councillor Kelch made a motion that had nothing to do with the contract or the development itself, but rather focussed on three questions that they already had the answers to: 1) He wanted an appraisal (there was already one done that gave it at about $1,000,000 assuming there were no buildings). 2) He wanted to determine ownership- even though Bluewater Health and the Province of Ontario had both already given their formal consent to the sale, and even though that when they signed the contract back in September, the City verified- in writing- that they had the legal right to sell the property including the buildings and everything therein. 3) Lastly, he wanted an estimate for the asbestos removal and demolition which had already been widely reported to be in the range of $3-7 million.
As the Kelch motion was a motion to “table” the rezoning pending the answers to the three questions he raised, Mayor Bradley declared that there could be no discussion and called the vote. In accordance with Roberts rules of Order, and more importantly, in the best interest of the taxpayers of Sarnia, Mayor Bradley did, in fact, have the discretion to allow discussion, to ask questions of City staff that probably would have answered Mr. Kelch’s questions, and to call the proponent from the floor to address any areas of concern that Council may have. He did none of these. The effect of this motion to “table” the zoning was to nullify the contract.
Despite subsequent attempts by the developer to keep the deal moving forward, two weeks later, Council decided not to grant an extension to the contract that their own actions nullified.
So, here we are now almost two years later and what have we learned? 1) The Mayor and Council did have the right to sell the property, just as they said they did when they first invited proposals and just as they said they did when they signed the contract. 2) The second appraisal agreed with the first one that the property is worth about $1,000,000 after you take the buildings down; and 3) that the cost of taking the buildings down is $8,800,000.
And what has this cost? By their own estimates, the cost to determine ownership was about $112,000 in legal fees to each of the City and Bluewater Health for a total of $224,000 in needless legal expenses. The appraisal was about $17,000 and the cost of maintaining and securing the property has been about $400,000. This does not include the cost of fire and police service calls to the property. It is probably safe to say that between the City and Bluewater Health have blown through close to one million dollars since Mr. Kelch made his motion. Add that to the $8,800,000 estimated cost of demolition, and we, the taxpayers are now on the hook for this $10,000,000+ liability.
The $10,000,000 estimate could actually go much higher as nobody knows what is in the ground beneath the hospital…think Centennial Park. To add insult to injury, the health campus would now be complete and would be generating about $500,000 per year in property taxes.
Persistent efforts by the Mayor to portray the collapse of this deal on the developers lack of time or tenants is simply untrue, grossly unfair to the developers, and the taxpayers have every right to be outraged.
Oh, and the zoning?.... we still don’t know. It is, apparently, easier to table a decision than it is to make one.
Sincerely,
The Sarnia General Health Campus Proponents
Charlie Dally Alex Jongsma Marty Raaymakers Mark Lumley Kenn Poore