A BC Supreme Court petition demanding payment over the stalled Porteau Cove development deal has been stayed after the parties agreed to return to arbitration.
A community of 1,400 units on 471 hectares was supposed to have been built by now near the provincial park, but for the long-running legal dispute between the Squamish Nation and a division of Concord Pacific.
Squamish Cornerstone Developments Ltd. petitioned the court on July 25 against landowner 602297 BC Ltd., Porteau Cove Developments Ltd., Porteau Cove GP Co. Ltd. and Porteau Cove Developments LP.
Cornerstone is a partnership of Squamish’s Bethel Lands Corp., Texas-based Matthews Southwest and the Squamish Nation that has its sights set on bringing the project back to life. It sought a judge to declare a May 2009-registered mortgage in default and to set $2.9 million (plus interest) as the amount of money required to redeem the lands. The petition also asked the court to set a one-month redemption period, after which the lands be listed for sale.
The parties reached an August 26 consent order that stayed proceedings pending arbitration. Squamish Cornerstone lawyer John McLean told Business in Vancouver he was “not in a position” to provide an update on the matter. Hein Poulus, lawyer for 602297 BC Ltd., Porteau Cove Developments Ltd. and Porteau Cove Developments LP, declined to comment.
BIV reported in April on leaked documents that confirmed Concord Pacific bought out the Squamish Nation for a nominal $1 in June 2013 under a buy-sell clause in their contract. The Squamish Nation disputed the validity of that buyout but was unsuccessful.
The NDP B.C. government gave the Squamish Nation an option to buy the land in August 2000 from a division of BC Rail. Through 602297 BC Ltd., Squamish Nation exercised a $10.1 million option in April 2004 with $505,000 from Concord Pacific division Adex Holdings and nearly $9.6 million as a vendor take-back mortgage from BC Rail Properties.
Profits from the joint venture would be shared 50-50 after repayment of the land purchase price. There would also be job training and business opportunities for Squamish Nation members.
602297 BC Ltd. granted Porteau Cove Developments LP – a partnership of Adex and two Squamish Nation numbered companies – the option to buy the land in March 2005.
A July 25 affidavit by Chief Gibby Jacob, head of the Squamish Nation’s intergovernmental relations, natural resources and revenue department, said the partnership exercised an option on the property in October 2008.
Various transactions followed in which shares of numbered companies were transferred back and forth. The $2.9 million obligation was secured by a mortgage granted to a Squamish Nation entity. Instead of the land being transferred to the partnership, Adex eventually exercised a buyout clause for a nominal amount to buy the interest of one of the companies holding the property.
In August 2011, Adex senior vice-president Cliff McCracken gave Jacob 120 days to accept or decline the $1 offer under the buy-sell clause, and left the door open to restructuring the deal. Squamish Nation re-transferred its interests, but the buy-sell process resumed.
The transfer of the partnership interest of 587267 BC Ltd. and 688368 BC Ltd. to Adex and Porteau Cove Developments was confirmed in a previous round of arbitration, the affidavit said. •
