Terrace hotel site in limbo

Environmental reclamation work at the Terrace Co-op site – which the city wants to sell to a hotel company – could take at least five years

The company in charge of cleaning up the former Terrace Co-op site on the 4500 Block of Greig Ave. which the city wants to sell to a Calgary-based hotel company says it could take at least five years before environmental reclamation work is complete.

Last May the city signed a $877,500 purchase agreement with Superior Lodgings for the sale of the 2.8 acre parcel on which once sat a large shopping centre, garden centre and gas bar. When the complex closed in 1997 as a result of an economic downturn, the land was taken over by the national Federated Co-op and with it the responsibility for cleaning up the parcel.

Federated Co-op then sold the land to another individual under the condition that the Co-op would continue doing the environmental cleanup. This new owner then sold the land to the city for $1 million in 2005 under the same conditions.

Since then the city has received provincial grant money to study the contamination levels as part of the reclamation process. It demolished the Co-op complex several years ago as a step toward selling the property.

Federated Co-op environmental affairs director Trevor Carlson says his company is finishing the second part of a two-stage cleanup which involved onsite work followed by putting bacteria into the ground that would feed on leftover petrochemicals.

“It’s safe to say that what we are dealing with now are residual trace concentrations, we are not dealing with any kind of gross contamination. The lion’s share of that impact has been dealt with,” he said.

However, he predicts it will be about five years until the site is clean enough for the provincial environment ministry to grant a certificate of compliance.

The purchase agreement between Terrace and Superior Lodging states the city must provide this certificate to Superior Lodging to satisfy the final conditions before the money changes hands.

“Any changes to that would have to be negotiated between Superior Lodging and the city,” stated a statement from the city.

The former gas bar site isn’t actually on the land Superior intends to purchase. However since it is all technically part of the same property, subdividing it and removing the gas bar site would require the approval of the province, the statement added.

“They won’t do that since it’s a contaminated site,” the statement said. “So we need this site cleaned up to move forward and allow development on the property.”

Last year Superior Lodging vice president Eric Watson said it helps to secure bank financing if the certificate of compliance is in place.

Watson said in a recent e-mail that “we remain committed to doing a hotel (or two) in Terrace.”

Carslon says Federated Co-op was clear about expectations for the full cleanup of the site, and that the city is now asking for the process to happen faster than first planned.

“The city bought it knowing exactly what the issues were, knowing exactly what the timeline issues were, and it was after they purchased it they wanted something different,” he said. “Council decided to buy it and the next thing you know we had a call from the city saying ‘can you clean it up this year so we can build on it’ and we said ‘no.’”

To get a clean bill of health in place faster, excavating large amounts of soil is possible, but Carlson said this could cost in the millions.

“We elected to proceed with a finesse-based science project where you can do the same thing over time for less money and that’s what we are doing,” he said.

“There’s always a risk it could be longer than five years,” he added.

Carslon believes a third option could see the environmental due diligence satisfied without necessarily rushing the clean-up.

An example would be to install a vapour shield in the building which would separate the earth from the building to block passage of the contaminants, he said.

By working around the contamination he said projects can be given environmental clearance for the construction before the certificate of compliance is granted.

“There is nothing to stop the city from doing a development on that property because certainly the impacts that are there I don’t think would be problematic for someone to engineer around,” said Carslon. “Stuff like that is done all the time with brown field development. It means the city would have to work with the consultant and develop a strategy for redevelopment that respects the impact issues and move forward [with the sale].”

He said the alternative would be if Superior Lodging decided to buy the land as is and incorporate the environmental safeguards in its development plan.

“The big issue that I see is pressuring a volunteer party to come to the table and do more than they are already doing which gets to be a little bit unreasonable, quite frankly,” Carlson said, adding that the city needs to put “some skin in the game”.

The city said it has been working with Golder Associates trying to figure out a strategy. It is also looking at applying for a federal grant that would cover two thirds of the cost of the cleanup.