A great divide has developed between a North Burnaby legion’s executive and the provincial body over a proposed land deal.
The proposal is one Branch 148 president Dave Taylor believes is a bad one. But B.C./Yukon Command president Glenn Hodge has served notice he will sign it for the branch because it’s “not going to get a better deal.”
The genesis of the rift goes back to 2012. Branch 148 on Hastings Street was seeking a way to remain viable in the wake of an aging and dwindling membership. So the executive went looking for a partner to develop the five-lot property on the south side of Hastings between Rosser and Madison avenues.
With the help of Dominion Command, the national Legion body, Epta Properties was chosen in 2013. In that agreement, said Taylor, the branch was to receive a four-storey section of the development as payment for the property. The branch would receive a new canteen and offices as well as space it could lease out to help pay expenses, including rising property and utility taxes.
“It turned out we ended up turning the property over to Epta on an agreement that wasn’t worth the paper it was written on,” said Taylor, 69, a retired tow truck driver.
The expectation was the project would be completed by the summer of 2015. The only thing that’s been done is the demolition of the branch buildings and blue fencing installed around the property’s perimeter.
“They didn’t build anything. They kept coming up with every excuse under the sun,” said Taylor.
It all came to a head in 2016. The branch held a $4.75-million mortgage against the property and the company wanted Taylor to sign off on a bigger one. “There was no start date (for construction) in sight. That’s when I said no. That’s when Beedie got involved.”
The B.C./Yukon Command laid out three options for the branch membership. They could continue with Epta, sue Epta or bring Beedie Development Group on board. However, Taylor said Beedie was only willing to provide the branch with a 2,500-square-foot unit.
At a meeting on Oct. 23, 2016, 43 of 45 branch members voted for the Beedie option. But Taylor maintains that vote was done under duress. He said a transcript and tape of that meeting reveals B.C./Yukon Command treasurer Jim Diack told the membership to agree to the Beedie option or the branch’s charter would be pulled.
Since then, said Taylor, Beedie’s proposal has changed and reduces the branch to a 2,100-square- foot space, with a value of $1.6 million, and $400,000 to fit it out.
“We’ve gone from $5 million worth of value down to two. And the property has risen in value since then considerably,” said Taylor.
Because Beedie’s latest proposal doesn’t match what the membership voted for last October, and his belief the property is being undervalued when it comes to the return the branch is to receive, Taylor has refused to sign off on the deal.
Beedie’s valuation of the property, done by Cushman & Wakefield in June 2016, was $5.5 million. Taylor said an appraisal he sought pegged it at just over $7 million, while Epta’s appraiser set it at $9.25 million in August 2016.
Taylor pointed out even the small residential lot his nearby home sits on was assessed at nearly $1.2 million by B.C. Assessment. So he doesn’t understand how Beedie’s appraisal puts the worth of the five lots on Hastings at only $1.1 million each.
B.C. Assessment, however, lists the Legion
property’s value as of July 1, 2016, at $4.75 million. But Taylor said when the assessments were first announced in January the property’s value was set at $6,461,000.
“How (Beedie) did that, what they said about the land (to get the assessment reduced), I don’t know,” said Taylor.
The branch president said he recently talked to a man who bought a 33-foot lot near Hastings and Gamma for $1.6 million.
“So how can our five lots be worth $4.75 million?” said Taylor. “I might as well go outside and talk to the lamppost. Between Command and Beedie, they tell us we don’t own anything any more, actually. They’re only giving us a section of the building out of the goodness of their bloody hearts. There’s something wrong.”
Taylor said the branch executive doesn’t know how much the taxes will be for the unit, and since it will be on the ground floor it will mean its liquor licence will have to be changed from a club licence to liquor primary.
“The only revenue we would have coming was the cash register, where before we were going to have rental from three other sections of the building,” said Taylor.
The provincial command laid out the latest proposal to the executive on June 30. It was, said Taylor, “a letter of intent basically saying if we signed it our $4.7 million mortgage would be gone. We would basically be trading that $4.7 million mortgage for $2 million or less worth of the unit plus the fit out.”
Taylor refused to sign, so Hodge wrote a letter to the branch last month saying he was invoking a bylaw that allows him to overrule a local branch and will sign the letter of intent with Beedie.
Hodge said in an interview from his home in Trail, he was taking the action for the good of the legion and he was abiding by the vote taken by the membership last October.
“Their branch executive haven’t fulfilled that requirement (to sign the letter of intent) as of yet, so the longer we wait the more equity they’re going to lose in their property, and the value going forward,” said Hodge. “We have to move this project forward, so one of the powers that I have under member bylaws is to be able, for the betterment of the legion, (sign the letter).”
Hodge, who assumed the presidency in June, also pointed out the deal includes a clause that allows the branch to share profit with Beedie once the development company makes a 15 per cent return on its investment.
“The longer they wait right now, the more equity they’ll lose by the month until it gets started. They’re not going to get a better deal. They’ll end up losing everything if they don’t start moving forward,” said Hodge.
Taylor said Branch 148 is appealing Hodge’s decision to the Dominion Command.
