The Land Conservancy has started to zero in on properties in Victoria and other parts of B.C. it could sell as it begins the process to repay $7.5 million it owes to creditors.
In a report issued Tuesday by Wolrige Mahon Ltd., the court ordered monitor for TLC’s creditor protection proceedings, TLC will try to sell a parking lot it owns beside Abkhazi Gardens for $539,900 and a residential development property in Sechelt for $1.9 million. It also wants to sell its 35 per cent share of the protected Maltby Lake property in Saanich.
Of note, the Wolrige Mahon report listed the 27-acre Madrona Farms in Saanich as potential asset to sell, and described it as a property with “marketability in the near term.” TLC director of operations John Shields said including Madrona Farms in the list of potential sale properties was an error and a “mis-listing of intended actions.”
“Madrona is not under consideration at the moment,” Shields said on Thursday.
In its place, he said TLC is considering selling the Keating Farm Estate in the Cowichan Valley, a 13 hectare farm in the agricultural land reserve with 1880s era buildings.
Gord McMorran, with Wolrige Mahon, apologized for the error in the monitor report and for causing undue alarm for supporters of Madrona Farms. The court will be notified Monday of the error, he said.
“The TLC board knows about it and are calling the appropriate people,” McMorran said. “I apologize but its out there and folks are rightly upset.”
Properties purchased by TLC are regulated under the Charitable Purposes Preservation Act of B.C. (CPPA), which prevents land within a trust to be sold or seized to repay debts. Shields said TLC is obliged to follow court orders under the Companies’ Creditors Arrangement Act (CCAA), a federal law.
“In the situation we are in, the CCAA requires … that we review each of our properties for their potential to pay off our creditors, in the context of our mandate to protect ecologically sensitive and environmentally important properties,” Shields said.
“We are definitely looking to sell properties, while making sure we are mindful of the CCPA.”
TLC has hired outside consultants to identify and prioritize which of the conservancy’s 50 properties could be readily sold. A list of 17 conservation properties – which includes Madrona Farms and the Sooke Potholes – and seven heritage properties, will be reviewed.
Shields said TLC can satisfy court orders and the CPPA by selling, for example, the parking lot it owns beside Abkhazi Gardens, the residential property it owns in Sechelt, and the Keating farm in Duncan. Ross Bay Villa itself sits on two lots, giving TLC the potential to divide and sell the property.
The provincial and federal governments too might be interested in acquiring TLC property for parkland, he said, although that process could take years.
TLC owns 50 properties across B.C., 8,300 acres worth, with an aggregate assessed value of $43,784,000.
“We are working so we are in a position to pay off our creditors. The intent is to pay off everybody in full,” Shields said. “We want to sell as few (properties) as possible, keeping in mind we have to raise a certain amount of money. I’m thinking this will be minimum a two year process.”
Whether it’s legal for TLC to sell properties to pay its creditors “is a question for the courts,” McMorran said. “This is all being done under the supervision of the courts, it’s all transparent,” he said. “Everyone is mindful of the statutory legislation and protection of trusts. There are a host of issues and there’s a long way to go.”
Nathalie Chambers, who with her husband Dave, have a long-term lease on Madrona Farms and were the driving force behind raising funds to have it purchased by TLC, said it’s deeply disturbing that current TLC management could circumvent CPPA.
“They’re attempting to overturn a law that protects properties in perpetuity,” said Nathalie, who at one point worked for TLC for its farm stewardship program. “It will take the trust out of the entire land trust movement.
“This is a real issue for remaining conservation lands in B.C.”
Bill Turner, a former executive director and founding member of TLC, said unless TLC can find a charitable organization to purchase its properties, the sale plan could undermine the land trust system.
“If future boards can sell assets to raise money that came from a specific gift, nobody can trust charities,” Turner said. “The act was brought in to protect the wishes of donors. This could be precedent setting.”
TLC has used a handful of properties as collateral to secure loans for operating capital during creditor protection proceedings, which Turner notes violates the CPPA. He said the parking lot at Abkhazi Gardens is an integral part of the property, and necessary for the parking variance the garden has from Victoria.
“The sale of Abkhazi (parking) flies in the face of the act,” he said.