Deal Reached For CN Rail Line

Written by Peter McIntyre 107.5 KISSFM Monday, 01 December 2014 11:42
A deal has been reached for several municipalities and regional districts to buy the former rail line between Kelowna and Coldstream from Canadian National. The negotiated price to secure the 47 kilometre corridor is a combination of 22-million dollars, and land donation for which the City of Kelowna will issue a charitable donation receipt. Doug Gilchrist, director of Planning and Real Estate with the City of Kelowna, says it's a once in a lifetime opportuntiy to preserve the corridor for public use, wuith the idea of a public walking-biking trail one possibility. "We are ecstatic to have reached a negotiated agreement with CN that both parties consider fair." Gilchrist says land that falls within the Okanagan Indian Band reserve number 7 has been excluded from the pending agreement. Local municipalities will now have a four month due diligence period to lift conditions, which includes financing. Funding options such as partnerships, grants, municipal reserves or borrowing will be finalized by the participating jurisdictions which include Coldstream, Regional District of North Okanagan, Lake Country and Kelowna. Local governments are making every effort to minimize the current tax impact in the interest of securing a land asset that would be valued for generations. The specific land parcels fall within the jurisdictions of Kelowna, Lake Country and the Regional District of the North Okanagan, so funding options such as partnerships, grants, municipal reserves or borrowing will be finalized by those jurisdictions during the due diligence period. Under the Canadian Transportation Agency discontinuance process, a single entity must put forward an interest in acquisition of the corridor, therefore the transfer process is to have the City of Kelowna be the sole purchaser with subsequent purchase and sale agreements to other jurisdictions. While a number of ownership models were explored the preferred model is for each municipality to own the land that falls within its own boundaries. The agreement stipulates that CN will attempt to remove the rail infrastructure from the corridor for salvage by the end of 2015. Once the discontinuance process has concluded, and assuming public ownership is achieved, local governments will establish construction and operation agreements; determine future costs and other considerations as part of protecting the rail corridor for future generations.

Quick Facts:

The corridor is approximately 47.5 kms long extending from Kelowna's north end to Mile 88 in Coldstream.

The municipalities of Kelowna, Lake Country, Coldstream and Vernon, as well as the regional districts of Central Okanagan and North Okanagan, representing more than 212,000 residents are collaborating for the mutual benefit of the valley's residents.

The CN Rail line was constructed in 1925 to bring the produce and lumber of the Okangan Valley to markets across the country.

Challenged with high costs and low revenues Kelowna Pacfic Railway, who operated the line in recent years, entered receivership and ceased rail service in July 2013.
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Castanet: http://www.castanet.net/news/Central-Okanagan/127973/CN-Rail-deal-reached
In a statement Monday morning, CN Rail says:

"CN is pleased at the successful outcome of these multi-stakeholder negotiations, which preserves this transportation corridor for use by local communities.

The settlement, reached through the federally-regulated Canadian Transportation Act (CTA) discontinuance process, is based on a mutually-agreed balance between the value of the asset and the needs of affected communities.

The agreement is the final step in settling the affairs of the former Kelowna Pacific Railway, which ceased operations in July, 2013. CN took over the former shortline at that time, and invested close to $20 million to revitalize rail freight service between Kamloops and Kelowna. This accounted for 80 per cent of rail traffic on the line. It was not economically feasible to preserve rail service on this final 47.5 km of track, but this agreement preserves the corridor for use by the communities as they see fit."