Negotiations have wrapped up between the City of Nanaimo and Island Ferries, resulting in a proposed long-term lease on city land for a terminal building for the Nanaimo to Vancouver foot passenger ferry service.
The city and Island Ferries announced that a deal had been reached Thursday morning, with both sides citing the news as a major step forward in the project.
The proposed 20-year lease would allow the company to build a terminal for the service on city-owned lands at 1 Port Dr., locally known as the former GADD Marine site. The agreement can be renewed twice at the city's discretion.
The lease would come into effect on Oct. 1 and would require the Island Ferries to begin operating the service by March 31 of next year.
Dave Marshall, marine operations director for the company, said securing the lease is a "critical" step for the company to shore up the remaining investment it needs to begin service in the area.
Island Ferries had originally intended to launch passenger-only ferry service between Nanaimo and Vancouver this summer.
But Marshall said the company is still gathering the financial investment it needs to propel the venture forward.
He said the new target of March was realistic.
"We've said for quite some time now that we need six months from a financial close to do all the things that we need to do, not least of which is bringing the ships over, getting crews hired and trained up, and of course prepare the site."
As to securing the money to power the service, he said the company has made "a significant amount of progress," but did not go into detail.
When asked what would happen if the business is not ready by March 31, Marshall said: "I'm not even going to consider that. We're focused on achieving this milestone and putting this service in play. There is no Plan B." Mayor John Ruttan said a straightforward lease agreement would be the most timely way to proceed with the project.
"It will be much faster to move ahead and Island Ferries is very anxious to get boats running, as is the city," he said.
The company will pay the city $52,000 a year to in lease revenue to the city. The agreement comes with a 'relocation clause' to allow the city some flexibility in finding a permanent location for a terminal. Island Ferries has also negotiated separate parking land agreements with both CP Rail and the city.
The is slated to come before council for final approval July 14, following required public advertising of the land deal.
