The City of Terrace announced Monday (March 7) that it is working to repurchase 1,187 acres of land at the Skeena Industrial Development Park (SIDP) from Taisheng International Investment Services, after the company failed to meet development deadlines.
“It is very unfortunate that Taisheng has not been able to move forward with the development in a timely way as was envisaged when the contract was entered into in 2014,” Kris Boland, Terrace’s chief financial officer, said in a statement.
The move by the city ends, for now, a multi-year hope that the project by an overseas investor would expand and diversify the area economy.
“The city and the Kitselas First Nation have determined that it was necessary to exercise the option under the agreement to ensure that progress is made in the development of the lands,” Boland said.
In 2005, the city and Kitselas First Nation signed a memorandum of understanding and a joint revenue sharing agreement to develop more than 2,000 acres of land south of the Northwest Regional Airport, and then in 2014 entered into a purchase agreement with Taisheng to sell 1,187 acres for just under $12 million, excluding taxes.
As part of the deal, the company agreed to adhere to certain development milestones regarding utilities and other civic works.
Taisheng — the Burnaby-based subsidiary of the Qinhuangdao Economic and Technological Development Zone in China — missed deadlines to obtain development permits and building permits in 2016, and also failed to pour a building foundation in 2017. The city extended that deadline to 2019, which was missed.
The City of Terrace also alleges that Taisheng failed to meet its contractual obligations after it triggered the buyback option. The city “will be taking all necessary steps to enforce its rights under the option and the purchase and sale agreement with Taisheng.”
On Feb. 7, Terrace officials filed a lawsuit against Taisheng, claiming that the city informed the company it was exercising the option to buy back the land on Oct. 15, 2021. The city alleges that Taisheng refused to complete the sale.
“Taisheng breached its duty to act in good faith in the performance of the offer to purchase and the option to purchase agreement, and failed to act in an honest, candid, forthright and reasonable manner in relation to contract performance,” court documents state.
“[Taisheng] sought to evade its contractual duties under the option to purchase agreement, deliberately frustrating and undermining Terrace’s right to exercise the option.”
The same court documents indicate Taisheng first told the city that “political tensions” between China and Canada and then the COVID-19 pandemic complicated its ability to find business partners.
The city says it will now work with the Kitselas First Nation to diversify development of the lands.
None of the allegations have been proven in court, and Taisheng International Investment Services has yet to file its own statement of claim, and has not responded to a request for comment.
Like us on Facebook and follow us on Twitter