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CRD to spend another $1 million on site rejected for sludge plant

The Capital Regional District is spending $1 million to fix up an Esquimalt warehouse complex it bought as a potential site for a sewage sludge plant. The four-acre site at 808 and 836 Viewfield Rd. cost the CRD $17 million in 2013.
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Purchasers can buy one or both of the lots on Viewfield Road in Esquimalt. The Capital Regional District has been trying to sell the warehouse complex since 2014 The site became a lightning rod for the sewage-treatment debate.

The Capital Regional District is spending $1 million to fix up an Esquimalt warehouse complex it bought as a potential site for a sewage sludge plant.

The four-acre site at 808 and 836 Viewfield Rd. cost the CRD $17 million in 2013.

Outrage from neighbours killed the sludge plant scheme, and the CRD has been trying to sell the property since 2014. It’s adding tenants and making a fresh attempt to sell.

The site has two large warehouses, each on its own lot. When it first went on the market, it was offered as one property.

Under the new offering, purchasers could buy one or both of the lots, said Ross Marshall, of CBRE Victoria commercial real estate.

The asking prices are not being disclosed.

According to government records, the combined assessed value of the lots is $14.9 million.

Spinnakers Gastro Brewpub and the Flying Squirrel trampoline park have signed five-year contracts to each lease 20,000 square feet at 808 Viewfield Rd. These leases will bring in money to cover temporary loan interest and building insurance, the CRD said in a statement.

Marshall said there’s interest in leasing the final 20,000 square feet of that site.

Upgrades to 808 Viewfield Rd. are needed to meet the B.C. building code, said Stephen Henderson, CRD manager of real estate. Three bids came in for the work, which is anticipated to cost about $1 million.

Improvements include upgrading the building envelope and electrical system. They are set to be finished by early November.

The warehouse at 836 Viewfield Rd. is empty.

The warehouses were a lightning rod in the controversial matter of where to build sewage-treatment facilities in the capital region.

The CRD board made an in-camera decision to buy the warehouses and the agreement was made public after it was signed in March 2013. Public fury led the district to scrap the idea of using the warehouses just months later, in June.

It didn’t even take possession of site until Oct. 1, 2014.

CRD board members admitted at the time that the public trust had been damaged.

“We got it wrong. We got it really wrong,” said Graham Hill, then the mayor of View Royal, in 2013.

Esquimalt Mayor Barb Desjardins said it was “ridiculous” to put a sludge plant in a residential area and called the process a “travesty.”

Today, Desjardins chairs the CRD board. The goal is to sell the property, she said. Leasing warehouses is “not really what we are in the business to do.”

But for now, leasing the warehouses will generate economic spin-offs in the community, she said.

The space could be used for storage by the shipbuilding industry, when federal non-combat vessels begin arriving in Greater Victoria next year for final work, Desjardins said.

Wilson Foods leased both warehouses until the end of September 2015, giving the CRD gross rent of $1.3 million.

That money went toward the principal on the $17 million borrowed to buy the buildings, as well as loan interest, operating costs, insurance and property taxes, the district said in a statement.

Wilson Foods merged with ColdStar Freight to form ColdStar Solution and a new warehouse was built near Nanaimo.

Demand to buy and lease warehouses has gained momentum in Greater Victoria since September 2015, when the industrial property vacancy rate stood at a 15-year high of 5.69 per cent, said Ty Whittaker, of Colliers International’s Victoria office.

He anticipates that rate will dip back down again in our current stronger economy. There is a correlation between the residential market being strong and the health of our business parks,” he said.

Companies specializing in products such as countertops, building supplies, kitchen cabinets — anything related to the residential market — all need space. “There’s this trickle-down effect that you do feel.”

Today, those interested in warehouse space want 24-foot ceilings, multiple dock doors and a good location, he said.

“A lot of our inventory is fairly dated.”

cjwilson@timescolonist.com

Map - Viewfield Road warehouses