The Songhees and Esquimalt First Nations have agreed to purchase property at Rock Bay once Transport Canada remediates the land.
The three parties have signed an Agreement to Transfer a 1.71-hectare parcel at Barclay Point for $2.8 million. Transport Canada announced the deal alongside a cost-sharing agreement with B.C. Hydro to remediate Rock Bay fully by 2016.
Bob Mason, in charge of economic development for Esquimalt First Nation, said he anticipates the property will serve as a revenue stream.
"I think the property will ultimately have some sort of commercial industrial use; that's consistent with our desire," said Mason, of Longbow Properties.
More importantly, the acquisition will serve to re-establish historical ties to the land.
"It gives them a foothold in the Inner Harbour, and that's really where they came from years and years ago," he said. "There is an emotional attachment. … The First Nations expressed a very strong interest in this property a long time ago."
On Thursday, Transport Canada announced it will launch phase three of its remediation of Rock Bay. To date, Transport Canada and B.C. Hydro have spent $19 million and $30 million on the project respectively over the past decade.
For the upcoming work, B.C. Hydro has committed $18.8 million. Transport Canada is taking the lead on the project, and its contribution won't be known until it goes out to tender.
Both provincial and federal bodies own adjoining parcels of land around the bay, which sit fenced off and mostly vacant.
Once remediated, B.C. Hydro plans to dispose of its property, which sits farther inland adjacent to Government and Pembroke streets.
It will first offer the land at fair market value to any level of government. If it receives no offers, then it plans to sell the land on the open market.
The City of Victoria has slated Rock Bay as critical to its economic development strategy.
Mayor Dean Fortin praised the remediation plan.
"It's good to get some more activity and life in the downtown, at the north end," he said. "It's way better than just having derelict property sitting there."
The land holds high potential for an industrial high-tech park, and some kind of live-work opportunities, said Fortin. "Certainly there is also an opportunity for a park … Strangely the remediation level for industrial land is the same for a park."
rholmen@vicnews.com