By Keith Sones
Published: Oct 11, 2014
There are some important differences between the private and public sectors. When you are running a private for profit business, decisions need to be made based on financial prudence, effective risk management and an understanding of future cash flow and profits. Success is ultimately contingent on one thing – a good product that results in happy customers.
In the public sector, the line of sight between decisions and financial benefit is simply not there. There is no motivation to generate a profit, and in fact the concept of profit is often viewed as running against the public mandate. In the absence of this line of sight and motivation, public officials can delay for a long time and spend far more than necessary and they frequently do.
With respect to money, I tracked the dollar amounts that have been transferred to the SODC from the district since 2005 and compared them to the average returns provided by the stock market, using the S&P 500 index as a benchmark. Even including the 37 per cent loss the stock market experienced in 2008, the $11.5 million investment total would now be worth almost $19 million.
Since a decent investor can do better that the market average by a percent or two, the account would realistically be valued at about $20M. Even an investment in safe government bonds at a 2 per cent interest rate would have created a value of just under $14 million.
I then talked to a couple of large BC based land developers and asked what they thought of the oceanfront lands and the development conditions in Squamish. The responses were clear. Both talked about the need for certainty when it comes to investing millions of dollars, and while there had been a strong appetite for Squamish some years ago, the delays and changes in direction by the various councils has created an atmosphere of uncertainty. Lower demand results in lower value, which is why we see the land recently sold for $15 million, when it could have been more.
In summary we have paid $11.5 million into the SODC and recovered $15 million, which translates into a net return on the land of $3.5M. If we had invested the funds that were used to create and support the SODC instead of creating a private company to hire consultants by the busload, we could have had $30 million in the bank. So, it has cost us about $26.5 million, or just over $1500 for every person in Squamish.
There is a lesson to be learned by all of us. I don’t believe any of our politicians intended to lose money or make bad decisions. So, the next time you hear a local elected official tell you of the great investments they are making in the community, do the math and make sure you are hanging on tightly to your wallet.
Douglas R. Day says
Very well said!
Rick says
Plain and simple. I like that. Local governments/staff DO NOT have the skill to be involved in developments. They should stick to zoning and permits to control development. The land should have been sold long before the SODC was born. Forget about the LNG. Let it do it’s thing. The lingering costs on the water front lands, even after this sale, will linger much longer than any negatives from the LNG project. Why you say? If you can’t figure it out, hang on. The show is just starting.
Elliot says
I believe Doug Race and Rob Kirkham were two of the biggest drivers behind this farce. Right?
M L Stathers says
in 1946 the 7.5 earthquake in Comox, became 6..5 when it arrived in Squamish. The turf in a Wilson Crescent yard became like a choppy wave on the water – liquifaction at work. Now BC awaits the BIG ONE – 9+. P:redictions are that low-lying estuaries will be GONE! – Victoria & Vancouver/Richmond. Jack Stathers’ Geography Masters’ Thesis “A Geographical Invesigation of Development Potential of the Squamish Valley Region BC” (1958) -(donated to the Village of Squamish that year – a copy in the Squamish Libraary) – felt that given the river-flooding, earthquake expectation, & soft estuarine soils, that Squamish should develop on higher ground! That advice was not caried out.
Jeff says
I understand the proposed 700 home development in the Ray Peters Trail land area is tied to this deal somehow. Does anyone have more info on that or can they clarify that?
heather gee says
Thank you very much for your input M L Stathers.
It is shocking and unethical that repeatedly Councils sweep this issue under the carpet. OK, so they get away with it – but how about the responsibility of members of the public ? Would they really not care when thousands of locals lose their lives?
A few years ago I was at the seniors centre when management engaged us in an Earthquake Readiness exercise. Afterwards, everyone gathered in the foyer and stood around. I asked a few people what they would do next……. ‘We would wait for buses to collect us’. (Perhaps they had never heard of liquefaction, etc.)
D says
I completely agree with M L Sathers. How many families and businesses are we going to put at very high risk using land that is expected to flood or worse? Quite possibly with even a more mild earthquake this land would be under water or at least water/sewer compromised? As much as I would like to see that land beautifully developed, the truth remains that a majority of Squamish has already been developed on soft sediment and flood plain. Why not just a nicely developed park/beach area for all residents to enjoy at leisure? Oh, right…the money! Yes, it’s all about money going into certain pockets. The only reasonable areas to develop are indicated in this multi-Hazard Risk Assessment intended for use by land use management and developers. Supposedly City Counsil is to refer to this as well before considering development proposals. Maybe they don’t know it exists. Ha! http://www.dcs.sala.ubc.ca/docs/sgog_frb_squamish_riskhazard_sec.pdf
I personally think potential owners need to do their own due diligence and research.
Plus voters need to help get the right people into council and make these decisions transparent to and involve the people who live here. Oh ya, that’s only in a perfect world.
Nothing will change if we sit by idly.
Come-on Squamish, time to speak up!