You can't accuse Dan McLaren - and his investment partners - of taking a small or dim view of the downtown's potential for revitalization.
When Commonwealth Campus Corp. approached Northern Trust in September 2009 for financing of the acquisition of properties on deteriorating, historic George Street, they put a nearly $8.9 million price tag to their "The New Downtown" plan.
That plan, revealed in hundreds of pages of documents obtained by The Citizen through a request under the province's Freedom of Information and Privacy Act, shows that Commonwealth's aim was to redevelop the 400-block of George Street as a lynchpin to revitalizing downtown.
Under the plan, Commonwealth Campus Corp. told the Northern Development Initiative Trust that they wanted to be the leading proponent of redeveloping downtown, assembling a team and land to convert the downtown, recruiting new inhabitants, demolishing old buildings and constructing new ones.
Describing Prince George as having the "worst downtown in British Columbia, perhaps Canada," Commonwealth Campus Corp. president Dan McLaren, L&M Engineering representative Heather Oland - with CNC president John Bowman and UNBC president George Iwama also part of the presentation - made a one-hour pitch for the financing to the Northern Trust.
A Downtown Campus Project Plan report delivered by Commonwealth to the Northern Trust shows the phased plan included the construction of residential, office, retail, hotel and industrial land uses.
The basis for acquiring properties in the 400-block of George Street is the campus project.
Commonwealth's argument for Northern Trust's involvement was that the loan was a good investment (it is not a grant), and that there was a strong socio-economic need for improving the downtown. They also argued that Northern Trust would have mortgage collateral, and that the proposal could provide a template to be repeated in other northern B.C. downtown re-developments.
The board - which is represented largely by municipal mayors (including Prince George mayor Dan Rogers), and regional district directors - agreed to have Northern Trust CEO Janine North undertake a due diligence process of the loan request.
Eventually, a portion of the loan request was approved and Commonwealth Campus Corp. bought up properties on the 400-block of George Street.
The approximately 500 pages of documents obtained from Northern Trust - which are heavily redacted to remove information on interest rates and certain aspects of the plan, as well as personal, policy, company and shareholder information - show that the Trust acted as financier for the purchase of $2.8 million in properties for Commonwealth Campus Corp., much less than the $8.9-million original request.
While some of the information revealed in the documents is already known - including that Northern Trust acted as a broker and financier in the purchase of the P.G. Hotel downtown, afterward bought by the City of Prince George for $2.5 million - a much broader picture of the Commonwealth group of companies' plans for downtown is unveiled in the Northern Trust minutes, due diligence reports, term sheets, correspondence and loan agreements.
The documents show that Commonwealth Campus Corp. obtained financing from Northern Trust for $1.612 million for the purchase of the P.G. Hotel properties; but also $506,250 for the purchase of 409 (known as Dungate) , 415/421 (known as Sassafras) and 445 (Mailboxes Etc.) on George Street; $150,000 for 231/233 George Street (known as the Laundromat); and 1189 Fourth Ave. (known as the Achillion). Northern Trust later provided financing for 427 George Street (known as the Final Chapter).
On top of this, in 2009, Commonwealth was awarded an $1 million loan from a federal community adjustment fund administered through Northern Trust for a $3.25-million renovation of the former gaming centre at the corner of Sixth and Quebec into a medical office building.
In total, Commonwealth received $3.8 million in financing through Northern Trust.
This week, McLaren showed off the revamped medical office building. It's a high-end building with an open design that uses wood as an accent. It's still partly under construction, but has tenants signed up including doctors, a pharmacy, coffee shop and the federal government.
"This is step one of a great new beginning downtown, for a great new downtown," said McLaren.
He has made no secret of his companies' involvement downtown, revealing in previous interviews they have purchased George Street properties.
He says he is still hopeful that the P.G. Hotel property purchased by the city will be the home of the proposed Wood Innovation and Design Centre. The centre - which potentially could be married with some sort of downtown campus - has been promised by the B.C. Liberal government, although no solid details or financing have been brought forward.
The project is considered a necessary catalyst to creating more opportunities and stimulating private investment downtown.
If that project doesn't materialize, they're open to other concepts, said McLaren. "We're developers. You have an idea, we're listening."
McLaren brushes of any criticism - he's heard some - of Northern Trust's financing of the downtown purchases, noting that until Commonwealth got together with Northern Trust as a lender, banks and investors were not interested in the downtown.
A 2009 Citizen review has already shown there had been numerous plans to revitalize the downtown, including at least three major efforts in the past two decades alone.
While some elements have been implemented, the revitalization plans have largely been unsuccessful. Even before Commonwealth's downtown acquisition strategy - they have boarded up some properties they own in preparation for demolition - there was an increasing number of empty store fronts in the city core, particularly along George Street.
Some downtown business owners had complained of open drug dealing and liquor consumption, aggressive behaviour of some street people, crime and vandalism, fighting when the bars emptied at night, and a perception that downtown was unsafe.
There have been some improvements - led, in part, by recommendations that came out of the most recent 2009 mayor's task force on downtown - including increased policing measures and a clean-up program. However, the downtown has failed to attract significant new investment to renew aging buildings, and stem the flow of businesses exiting the downtown, particularly along George Street.
McLaren also notes that the P.G. Hotel and Laundromat loans have been repaid. That leaves about $1.2 million outstanding in loans, he said, which agrees with information provided by Northern Trust.
Research by The Citizen through the B.C. Land Title's office also shows that another Commonwealth company, Commonwealth Realty Corp., owns George Street properties. However, those properties, including the former Morrison Men's Wear building on Third Avenue adjacent to George Street, were not financed through Northern Trust.
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The Northern Development Initiative Trust was created from proceeds from the $1-billion sale of B.C. Rail to CN. The BC. Liberal government wanted to dampen criticism of the deal in northern B.C. and seeded the trust with $135 million to allow regional decision makers to govern the fund to spur economic development.
Later, the government provided another $50 million, as part of its efforts to offset the coming impact of the loss of timber supply from the mountain pine beetle epidemic.
In responding to questions about its financing to Commonwealth Campus Corp., Northern Trust CEO Janine North said the Trust has a mandate that allows it to enter into funding for downtown revitalization projects with a public interest, pointing to the city's purchase of the P.G. Hotel property.
She says the Trust has funded downtown revitalization projects in other communities, including in Vanderhoof, Fort St. James, Valemount, Quesnel, and Terrace, although those were largely grants.
Acting as a financier to a private developer for downtown revitalization was a first for Northern Trust, but North said it is something they are willing to examine in any community in northern B.C. as downtown development is important.
North says the trust's only relationship to the project is as a secured lender.
She also noted that the remaining $1.2 million in Northern Trust secured loans are in good standing. The loan from the federal funding is also in good standing, she said.
Although the loan rate information was redacted from the documents provided to The Citizen, Northern Trust later provided that the loan for $1 million from federal funding was 0 per cent for five years as stipulated by federal program guidelines. The Northern Trust loans were set at about 6.97 per cent, although they vary.
Whether Commonwealth's venture to redevelop George Street will succeed remains an open question.
It is not clear, despite the province's promise, if the Wood Innovation and Design Centre will be built, and also whether there may be an expanded campus presence downtown.
CNC president John Bowman said the college supports a vibrant downtown core, but sees itself as a minor partner in any downtown campus concept. He noted that the college - which is currently undergoing a trades expansion - has limited ability to grow as its funding is tied directly to government.
Bowman had offered some support in an April 6, 2009 letter for Commonwealth Realty Corp.'s downtown redevelopment plans, part of documents obtained on the financing of the medical building on Sixth and Quebec. Bowman had said he looked forward to the possibility of a presence in the "new Prince George Downtown Campus."
Bowman said this week, if they were to become involved at all, it would be as part of a proposed two-year diploma engineering-technical program focused on civil and mechanical engineering, which remains in the concept stage. For now, he said, CNC is largely providing moral support.
As part of the same supporting documents, former UNBC president Charles Jago wrote on April 6, 2009 to Commonwealth Realty in support of the "New Downtown" project. Jago has since been replaced by UNBC president George Iwama, who wasn't immediately available for an interview on the university's plans downtown.
Although the city purchased the P.G Hotel properties downtown, mayor Dan Rogers is somewhat circumspect about Commonwealth's "The New Downtown" plan, saying the city is guided by higher-level planning which includes the recently-completed Smart Growth on the Ground exercise. The overall Smart Growth concept plan includes design concepts to revitalize streets, with a stress on housing and more green space. The plan contemplates putting housing on top of the city's grey, shapeless parkades, and creating a canal that skirts the bank below Patricia Boulevard in the Millar Addition neighbourhood.
"We're eager to hear from anyone willing to invest," said Rogers. "We're not partnering with anyone."
Rogers wouldn't directly respond to a question on whether he is pleased that Commonwealth is investing downtown, nor would he respond to questions as a member of the Northern Trust, saying protocol dictates that the chair, Chetwynd mayor Evan Saugstad, answer questions on behalf of the board.
Rogers, who continues to chair the mayor's task force on downtown, now called Downtown Partnership, will not say that the P.G. Hotel property the city purchased for $2.5 million is earmarked for the Wood Innovation and Design Centre. Instead, he says it is being readied for investment.
Demolition of the hotel is being considered as part of the city's budget next year.
Rogers, who sees a potential to capitalize downtown from its winning bid for the 2015 Winter Canada Games, also notes that a prospectus is being readied to market the downtown. It will include city-owned property available downtown, as well as development incentives that are in place. Stresses Rogers: "We are trying to create an environment that will attract investors. We're not closing the door to anyone."
"The New Downtown's" investors?
Who are McLaren's investment partners in "The New Downtown" is unclear.
McLaren is reluctant to reveal who are the other investors.
McLaren is listed as the sole director of Commonwealth Campus Corp. and Commonwealth Realty Corp. according to the province's corporate registry.
Although the loan documents from the freedom of information request include a shareholder list for Commonwealth Campus Corp., the information has been blacked out.
There is more than one director, however, listed for Commonwealth Health Corp., according to the province's corporate registry. The list includes Dan McLaren, Grant Dakus, Mark Dakus, Don Kehler and David McWalter.
