The two players involved in the loan at the centre of the proposed Wood Innovation and Design Centre project have different views on how much money was potentially on the table after work was underway.
Northern Development Initiative Trust (NDIT) approved a loan to Commonwealth Campus Corp. in late 2009 as part of plan to acquire properties on the 400 block of George Street, demolish existing buildings and remediate the land.
NDIT claims although its board of directors approved an $8.9 million loan to Commonwealth but later capped the loan at $2.9 million. Commonwealth president Dan McLaren said there's no evidence the terms of the loan were ever changed.
"I never signed an amended terms sheet that capped us at $3 million," McLaren said.
The loan is now part of a foreclosure case in B.C. Supreme Court and a contract for the wood centre still hasn't been awarded more than four years since the project was first announced in the 2009 throne speech.
NDIT CEO Janine North said the regional development agency followed proper protocols in handing out the loan by ensuring there was proper security in place. In the case of the smaller loan that was handed out, North said the security included an option to buy some of the property in question by the City of Prince George and personal guarantees from the principals of Commonwealth.
"A larger loan was never made, a smaller loan of $2.9 million was made," North said. "It was based on what we always look for which is very strong security."
According to North's briefing notes prior to a Sept. 25, 2009 special board meeting, before handing out the $8.9 million loan NDIT was waiting for assurances that the provincial funds for the wood centre were in place.
"This loan and purchase/sale transaction is subject to approval from Treasury Board for the capital investment in the Wood Innovation and Design Centre and inclusion in the 2010/11 or 2011/12 provincial budget," North's notes read.
The idea at the time was that NDIT would loan the money to Commonwealth so all the land could be assembled and the necessary work done to remediate the land. NDIT was then planning to buy back the land for $11.8 million and sell it to UNBC for $12.5 million. UNBC has been tabbed as the major tenant for the wood centre.
At the time the wood centre was expected to be 10 storeys high and require a provincial investment of more than $100 million. Since then the project has been scaled back significantly and a contract for a $25 million project is expected to be announced in the coming days or weeks.
North said that when it became clear that treasury board was not going to approve the larger project, NDIT decided to issue the smaller loan instead.
On June 17, 2010 North wrote a letter to McLaren indicating NDIT was not in a position to lend any more money "until there is a firm commitment from the Province of British Columbia, the University of Northern British Columbia, or some other suitable public body."
At that point work was well underway on some of the properties and McLaren said he still understood the loan to be for up to $8.9 million and that the letter didn't change that in the long run. He also wondered why there are no documents which show the terms of the loan changed.
"NDIT has twice been asked to provide details of the loan [through access to information requests] and twice they've presented the notes from Sept. 25, 2009," he said.
North said the loan that was handed out was appropriate.
"What really matters here is that $2.9 million was loaned and only partly paid back and then defaulted on," North said. "This is not about the development of the Wood Innovation Design Centre. We acted strictly as a lender, and we are focused on recovering the money owed to the Trust as any prudent lender would do."
North insisted there was no provincial government interference in the loan process.
"There were interests expressed back in 2009 at the time of the original throne speech announcement of the Wood Innovation and Design Centre by the city, by the university and by the province," North said. "Our board does not take direction from anyone except those 13 fiducially responsible directors on the board who make a decision."
With over $1 million still outstanding from the loan, North said NDIT's goal now is to get it fully repaid.
"Our sole focus is on recovering the money for the trust," she said.
