A story published on the Gibsons Alliance of Business and Community Society (GABC) website by freelance journalist Margot Grant alleged that the Town of Gibsons lost $200,000 in legal costs and $300,000 in future revenues after a 2013 arbitration regarding the lease renewal for Gibsons Marina.
Town chief administrative officer Emanuel Machado refuted the allegations as inaccurate this week.
Grant wrote that in the lead up to arbitration, “Gibsons Marina Holdings Inc. (GMHI) offered the Town a slightly higher percentage, resulting in an annual rent of $82,914 instead of the average of $76,000. The Town refused.”
Grant went on to say that “the Town ended up with less rent than it would have received if it had accepted GMHI’s 2012 offer.”
Machado disagreed with Grant’s assessment. For one thing, he said, it was never about a set dollar figure.
“Our argument was that the rent should be based on the commercial rents there. They argued otherwise, that it was more of a partnership and a community asset,” Machado said.
“The final amount was that the same formula issued [15 per cent of gross income] would apply. It’s not a total number, it’s based on a percentage of revenues. The same formula applies today, so the more revenue they make, the more the Town makes.”
The Town hired Glenn Balderston to do an appraisal of the Marina’s leased property – including the water lots – and to come back with a proposal for the average rent. Balderston came back with $199,825 per year.
GMHI also hired two appraisers, Jeffrey Burgess and Ronald Hooge, who arrived at a rental average of $82,488 (Burgess) and $82,914 (Hooge).
“This was in 2013 – in the meantime, there was a change as well which is that the Province, at the same time of the renewal, started requiring an annual payment [for the head lease],” Machado said.
Counsel for GMHI, Arnold Armstrong, proposed a compromise–adding a one third contribution to the water lot head lease payment on top of the original 15 per cent formula.
Arbitrator Nicholas Glass ultimately sided with GMHI, continuing with the 15 per cent of gross revenues, as established in the previous lease – plus one third of the head lease.
“Applying an average over the last four audited years this amounts to approximately $84,042,” Glass said. “Which provides a small premium above the new head lease payment.”
Grant’s assessment that the Town received less than what was offered is incorrect, according to Machado.
“I don’t agree with that. This [$76,000] is the average of the previous 30 years,” Machado said. “That’s not the average rate we came back with. In the end we get more than that, we get [about] $84,000.”
GMHI did request that the Town foot the legal bill for arbitration, which was granted by Glass. Grant estimated that the Town’s legal bill – theirs and GMHI’s – totalled about $200,000. Machado couldn’t confirm the exact number but he said that Grant’s estimate in this case was more or less correct.
