The risk of lost opportunity

Choosing the best path

First, a few background points: 

  • It may be unconscionable to remove the Garden City lands from the Agricultural Land Reserve.
  • There is a community need to free Richmond from the mega-density and traffic congestion that would flow from the develoment plan.
  • Helping a bad agreement drag on would have a 100% chance of a bad outcome – a loss in Richmond livability.
  • In view of the context, an early end to the bad agreement is not risky in itself.
  • There is, however, a risk of lost opportunity if the City does not choose the best path.
  • Since the Garden City lands Agreement for Purchase and Sale has been kept from the citizens of Richmond, it is hard for them to determine even the general route that the best path would follow.

This post is an attempt to increase knowledge of the general route, with a focus on the biggest expressed concern, which is that Canada Lands will sell the whole property to the Musqueam Indian Band.

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The City’s right of first refusal

During the life of the Garden City lands agreements, if all parties act in good faith, Canada Lands could only sell the lands to the Musqueam after offering them to the City. The reason is in Section 1.2, “Right of First Refusal,” in “Terms of Instrument – Part 2” (page 6) in Schedule C of the Agreement of Purchase and Sale:

(a) If at any time after the Effective Date [December 15, 2005] and prior to the Discharge Date, [Canada Lands] CLC proposes to sell or convey any interest in any portion of the Lands (an “Offered Interest”), CLC shall, prior to offering or agreeing to sell any offered interest to any other party, provide to the City written notice (an “Offering Notice”) of CLC’s intention to sell the Offered Interest;

Additional clauses in the list fill that out, with the effect that the City has a clear right of first refusal, not just a right of first offer. In this particular part of the agreement, the City is actually in a good position, although the City will still have to act wisely to capitalize on it. The Musqueam might be able to get a court injunction to stop the transfer to the City, but (contrary to what is sometimes stated) that injunction would not result in the Musqueam obtaining the property. It should lead to the property being returned to the federal government, with Canada Lands getting its $5 million payment back. It’s even possible that the Musqueam would not be able to get that sort of injunction (interlocutory injunction) in this case, since the Musqueam signed the agreement that gives the City the right of first refusal.

  
Toward negotiation and restoration to original positions

The quotation about first refusal refers to the Discharge Date for the purchase agreement. The Discharge Date conditions in Section 1.2 of Schedule C mainly make it easy for Canada Lands and the Musqueam to end the agreement, putting them in a position of control over the City, which will be in a mess if the agreement gets terminated when the development is largely complete. (Technically, Canada Lands would not even need to sell the supposed City lands to the City, and at minimum that would put the City in a very weak negotiating position.) However, the one condition that will fit the situation if the lands are not removed from the ALR appears promising. That condition, in Clause 1.1(a)(a) on page 5, is that

alternative terms and conditions as to the ownership, development or use of the lands are negotiated or mediated through the alternative dispute resolution processes contemplated in the MOU [the Memorandum of Understanding, the intitial Garden City lands agreement that includes the federal government through what was called the Department of Fisheries and Oceans, now Fisheries and Oceans Canada].

The MOU sections that are relevant for that purpose are 1(22) and 1(23), since it is impossible for the City to meet the conditions in those sections if the property remains in the ALR. Section 1(22) states the following:

Musqueam, CLC and the City will meet to discuss the renegotiation of any understandings, arrangements or agreeements between them with respect to the Garden City Property in order to give effect to the spirit of this MOU, to the extent possible, in the changed circumstances. If Musqueam and CLC are not satisfied with the outcome of the negotiations, Musqueam and the CLC will have the option of terminating this MOU and, as appropriate the JVA [a limited partnership of the Musqueam and CLC, Canada Lands]. However, before any of the understandings in this MOU may be terminated, the Parties will utilize the dispute resolution described below. If any understandings in this MOU are terminated, all costs incurred to that stage of the process will be equitably shared by the Parties where applicable, and in accordance with Attachment 1, and the Parties will cooperate in making whatever arrangements are necessary to restore each Party to the position that it was in prior to entering this MOU. [Emphasis added.]

As usual in the one-sided Garden City lands deal, that section gives most of the rights to Canada Lands and the Musqueam, but it turns out all right in the end. If neither the Musqueam nor Canada Lands acts to terminate the MOU, the Garden City lands will remain as green space. However, acting in good faith, Canada Lands would most likely terminate the MOU. The parties would be restored to their original positions, with the federal government owning the property. The Musqueam could still block any transfer of the property to the City of Richmond, but that would only result in the Garden City lands remaining the property of the federal government, which will be a good result if our politicians work well together.

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Battling through complexity to a win for Richmond

In the “Digging Deep” columns, the explanation in this post is typically encapsulated in a few words. This more complete explanation is better for some purposes, but it was impossible to provide it in a column of limited length.

Two conclusions:

  • It is important for some citizens and all members of Richmond Council to put a fair amount of effort into studying the two Garden City lands agreements (MOU and purchase agreement).
  • It is equally important that the City obtain the services of lawyers who not only understand the situation but also can equal the skill of the other parties’ excellent lawyers.

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