The following was taken from a report to Lake Country council from Dec. 16, 2014 with regard to the proposed purchase of the CN Rail corridor. The City of Kelowna is investing 50 per cent of the $5.1 million dollar price tag for Lake Country to join inter-jurisdictional partnership.
The District of Lake Country and the City of Kelowna have approved a reciprocal Memorandum of Understanding (MOU) whereas the City of Kelowna will assist with the purchase cost portion of the District.
The City will advance 50 per cent of the District of Lake Country purchase cost in exchange for 50 per cent tenancy in common of the asset. The purpose is to assist the district’s purchase of its portion with the intent to pay back the City of Kelowna as soon as funds are available, especially through the sale of excess land. This will alleviate debt load of the district and protect the opportunity to finalize the deal with CN.
The general terms of the MOU are as follows:
•Kelowna and Lake Country will each pay 50 per cent of the purchase price for the acquisition of the Lake Country Corridor from CN, which purchase price is presently estimated to be $5,145,000.
•Kelowna and Lake Country will be registered as tenants in common of the Lake Country corridor each as to half interest (50 per cent each).
•As Lake Country reduces Kelowna’s investment interest, its interest in the ownership will increase while Kelowna’s will decrease.
•Lake Country purchase from Kelowna will not be based on market value but on actual purchase price.
•No interest will be applied to Kelowna’s investment in the land for three years. Subsequent interest will be applied to Kelowna investment by a rate established by the Municipal Finance Authority on January 1st of each year.
•The proceeds from the disposition/sale of lands along the Lake Country corridor that are considered surplus will go entirely to reducing Kelowna’s investment in Lake Country lands.
•If funds become available, Lake Country can make additional payment to further reduce Kelowna’s share.
•Lake Country will maintain full decision‐making authority for operating, maintaining and repairing the corridor until a decision is made to create a regional operation with all other participating partners.