Public Market lease shows payment obligation of $400,000 before end of this year

(by Laura Houle) The Gibsons Community Building Society (GCBS), which operates the public market, has agreed to pay the owner of the market building (a numbered company) $400,000 before the end of this year. The money, the lease states, is for the building and improvements which were in place at the commencement of the lease. 

It is not clear why the tenant is paying for amenities already existing on the property.

In the Coast Reporter of May 4, 2017, Building Society president Pam Robertson said the society has raised almost $4 million for the public market so far. The society plans to fundraise another $750,000 in the coming months, she said. About $100,000 of that amount has already been donated and she has no doubt  the rest will be raised.

The Coast Clarion obtained a signed copy of the lease from the Town of Gibsons showing the agreement to pay the $400,000. The lease was signed on June 5, 2015. The town had a copy of the lease because it has a 39 per cent interest in 987152 B.C. Ltd., the owner of the market property. Other shareholders include the Sunshine Coast Community Foundation, Community Futures Sunshine Coast, and the Building Society itself:The lease states that if the $400,000 isn’t received by the end of 2017, the unpaid amount must be paid in monthly installments. The amount shall be amortized over 20 years with interest at a rate of two per cent per annum above the prime rate declared by the Bank of Montreal on December 31, 2017.

The base rent for the market is $1.00 for the entire 30-year term. However, the lease says that “the Tenant shall also pay to the Landlord, from time to time upon demand, as additional rent, all other sums payable to the Landlord pursuant to this Lease.”

According to the lease, the Building Society is responsible for construction of improvements, extensions and renovations, and repair and maintenance of the building. Despite these obligations, the lease states that ”all buildings, structures, fixtures, and improvements belong at all times to the Landlord.”

The landlord acknowledged that the Building Society was investing considerable sums in the construction of the public market, and needed to raise capital. Hence, clause 30 of the lease grants the society the right to mortgage the value of the improvements. A leasehold of 30 years provides collateral.

And indeed, there is a mortgage. Through a Freedom of Information request, a citizen obtained a copy of a mortgage agreement between the Building Society and the Sunshine Coast Credit Union from the Town of Gibsons in 2016.

The document was almost completely blacked out. Only the letterhead, the date, and the blank signature area were visible. Dated February 15, 2016, the signature area is not signed other than the corporation name: Gibsons Community Building Society. The amount and terms of the mortgage are unknown at this time.

There is another mortgage, registered on the land title. This mortgage between the numbered company 987152 B.C. Ltd. and the Sunshine Coast Credit Union was registered on December 20, 2013, the day the market property was originally purchased. The amount and terms of this mortgage are unknown at this time.

In clause 10 of the lease, the tenant (the Building Society) acknowledged that property taxes needed to be paid. That same year, the Building Society applied to the Town of Gibsons for an exemption. The town granted the exemption for a period of four years, starting in 2016.

Last year, the town forgave $16,116 of property taxes for the public market and this year, the amount is $16,439, the town’s director of finance Ian Poole confirmed yesterday.  Next year, an estimated $16,605 will be forgiven. In 2019, the estimated amount is $16,937 (ad in the Coast Reporter of September 23, 2016, page 15). The total tax exemption is approximately $65,800.

The Coast Clarion contacted Nancy Grenier, communications and marketing director of the Gibsons Community Building Society for an interview about the finances of the market; the Building Society declined. The society is a private, non-profit organization with 32 members.

The Coast Clarion asked Jonah Spiegelman, who co-signed the lease for 987152 B.C. Ltd., to check this article for inaccuracies. He did not respond.