The B.C. Liquor Distribution Branch's East Vancouver warehouse is on the move – but where, when and who will be involved is a mystery.
The BC Liberals announced in a news release on February 14 – just five days before the provincial budget and 88 days before the provincial election – that a request for proposals would be published "in the coming weeks" for a transportation and logistics study to determine a new location. The news release claimed no staff would be affected. A request to interview Liquor Minister Rich Coleman was not fulfilled.
"It's a strong indication of chaos going on in government, generally, and in this ministry in particular," NDP liquor critic Maurine Karagianis told Business in Vancouver. "In the current circumstances that seems to be the only way they can present a balanced budget is to claim a lot of asset sales."
During last year's provincial budget on February 21, 2012, then-finance minister Kevin Falcon announced the sale of surplus government real estate to raise $700 million and the privatization of LDB's warehousing and distribution.
A December 8, 2011, Treasury Board presentation, obtained via Freedom of Information, said government property worth more than $1 million that is marketable by March 2014 and not required by government to meet its strategic priorities was eligible for sale. ICBC, BC Hydro, B.C. Parks and B.C. Pension properties and land set aside for First Nations treaty settlements will not go on the block.
No major property sales appear to have taken place under new finance minister Mike de Jong.
The LDB privatization also did not happen.
ContainerWorld, Exel, Kuehne + Nagel and Metro were shortlisted to take over liquor hauling from the government, but the tendering was halted prematurely when the B.C. Government and Service Employees' Union reached a new collective bargaining agreement with government on Sept. 27, 2012. The four bidders had yet to make their final presentations to government.
The NDP opposed the privatization because of the lack of business plan and the lack of industry and public consultation by the Liberals. BIV obtained documents that showed the lobbying and political donation activities by ContainerWorld and Exel.
"Is this another stealthy way to fulfill the original purpose of offloading some of this to a private sector investor that is closely tied with the government?" Karagianis wondered.
This won't be the first time the government has considered moving the LDB main warehouse.
A Ministry of Finance report by Coriolis Consulting Corp. from April 2001 said the cost of a new facility would likely exceed the revenue from selling the 9.2-acre property. It estimated the government would receive $13 million to $15 million if LDB vacated the 280,000 square foot warehouse or leased it back on a short-term basis. The cost to acquire a suitable site and build a new distribution centre in South Burnaby, Annacis Island, Northwest Langley or Port Kells was estimated at $17 million to $19 million. To break even, the new facility would have to be 20% smaller, the report estimated.
"The only relocation options for the LDB in the foreseeable future will be to purchase a site and construct a new building or enter a build-to-suit agreement with a developer," said the report.
The report said there was no opportunity to develop "any significant additional space on the site without demolishing all or a portion of the existing building." Vacant portions of the site are required for on-site circulation, parking and loading.
The May 2012-assessed value, according to the City of Vancouver, was $27,678,667.
