This week Pembina Pipeline Corporation (“Pembina”) has triggered a key milestone in its agreement with Prince Rupert Legacy Inc. (“Legacy”) which allows them to proceed with construction of the above-ground facilities for their propane export facility on Watson Island. The milestone comes alongside the City’s recent recognition by the North Central Local Government Association (NCLGA) for efforts to bring the former pulp mill site back into industrial use. The City received the award for Excellence in Economic Development, nominated for developing a creative solution to a complex and difficult local issue – dismantling the former pulp mill and obtaining a new tenant.
The City anticipates a gross estimated income to the municipality and Legacy of more than $75 million in revenues, including lease payments and property taxes, over the course of the long-term commercial arrangement. A portion of Legacy revenues will be dedicated for reinvestment in remedial activities to ensure the long-term success of the island’s redevelopment. As the redevelopment of the island proceeds, the City is working to remediate and improve site infrastructure with the financial investment of proponents. The City and Legacy release financial statements each year, which will encompass the financial positions of the respective organizations.
“Tackling Watson Island was a challenge, and the fact that it is now being developed again is in no small-part to the hard work of City staff,” said Mayor Lee Brain. “We can now look forward to seeing the site come to life with business – which will generate both tax and lease revenues to support City services and infrastructure improvements.”
“We’re turning a page on Watson Island,” said Robert Long, Prince Rupert City Manager. “It’s time to write the next chapter for this site, and for our community.”
Today Pembina executives gathered with the Mayor, Council, City Manager and staff on site to mark the occasion.
“We have been welcomed by the local community and received strong support from the local government. Subject to receiving the necessary regulatory and environmental approvals, Pembina looks forward to advancing the propane export facility project and contributing to the local economy. Pembina and the City have been working hard to reach our goals and believe that the City and surrounding communities will benefit for many years, from our approximately $250 million investment and the generation of lease payments and property taxes from future years of safe, reliable operations. Pembina’s project will generate job opportunities and we are committed to recruiting Prince Rupert area residents as full-time employees during operation and working with our contractors to hire locally for construction workers. The project will create 150-200 construction jobs and 20-30 new, permanent operations positions,” said Jaret Sprott, Pembina’s Senior Vice President and Chief Operating Officer, Facilities.
The work by the City to redeem the once-abandoned site has not gone unnoticed. The award given by the NCLGA represents an annual opportunity for communities to share successes and experiences ‘thinking outside the box’ with Central and Northern BC neighbours.
Watson Island is the former site of the Skeena Cellulose pulp mill, which was in operation from 1955 to 2001. The City was the recipient of the property in 2009, as a result of a tax sale from the previous owner, Sunwave Forest Products. Over the past 3 years, the City has executed the decommissioning of the old pulp mill assets, in order to enable its redevelopment. These changes helped attract Pembina as a future tenant, and in December of 2017, Pembina made a decision to proceed with the development of a small-scale propane export facility on a portion of the Watson Island site. The milestone reached today represents another positive step towards the development of a new operational project on the island.
Prince Rupert Legacy Inc. is a wholly owned subsidiary of the City of Prince Rupert, established in 2014 by resolution of Council. The company has 3 directors, appointed by Council - the Chief Administrative Officer; the Corporate Administrator and the Chief Financial Officer of the City of Prince Rupert. Legacy is used to transact commercial activities on the City’s behalf, to protect the competitive nature of commercial transactions and provide limited liability protection to taxpayers. Legacy revenues are then provided to the City as dividends, which go towards major expenditures. All major expenditures made by Legacy are brought to Council for decision. Since 2014, Legacy has funded several major infrastructure improvements – including 2nd Avenue bridge improvements, the City’s portion of costs for the waterline and dam replacement project, 3rd Avenue road and sidewalk improvements, airport ferry pontoon replacements, an extension and kayak launch at the Cow Bay Marina, and the Redesign Rupert program. With new income, Legacy will continue to fund similar projects in the community.
City of Prince Rupert
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(From Left to Right) Pembina’s Jaret Sprott, Senior Vice President and Chief Operating Officer, Facilities and Pembina’s CEO Mick Dilger, Mayor Lee Brain and City Manager Robert Long gather to celebrate the project milestone.
Mayor, Council, City Staff and Pembina's Executive gathered on site today.