Northam Industrial Park Mortgage Almost Paid Off

In December, 2002 the Town purchased Northam industrial park for $13.7M, took out a 15year $14M mortgage and took possession in March, 2003. The site is 121 acres and has 17 industrial buildings which cover more than 836,000 sq. ft.  Since then, although over $13M has been spent on Capital improvements, the mortgage has been paid down and $5M has been paid to the town by way of dividends.  The good news is that in March 2018 the mortgage will be fully paid up and the annual dividend from the park will increase by about $1.25M per year ($940K in 2017). 

Northam Industrial Park - Entrance
Northam Industrial Park – Entrance

Over the 14 years, the annual dividend has paid for a variety of things – including long term debt, Tannery Property costs, NHH contributions, Pumper trucks, CCC improvements  and road works.  At Monday’s Committee of the Whole Meeting, Treasurer Ian Davey will present his third quarter Financial report on the park – download copy here.  See also the 2016 year-end report here and the Cobourg Internet summary of that report here.

The Park still has some vacancies but recent moves by the Town have filled two buildings:  Number 7 and number 13.  Number 7 was renovated for the Works and Parks Departments to move out of their dilapidated sheds on the flood plain of Cobourg Creek on King Street.  The renovation cost approx. $4M and was a lot less costly than a new building which would have been approx. $8M.  Number 13 will also be renovated and will house both the new Venture 13 facility and the ever expanding Police Business services unit (See Entrepreneurs get Major Boost in Cobourg and Venture 13 Tenders come in Lower than estimate).

Addendum 

At the Committee of the Whole Meeting on December 4, this report was accepted without discussion or comment.

 

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Frank

That would be quite an annual dividend, ” to increase by about $ 1.25M per year ( $940K in 2017 ) “.

Ben

With a larger dividend coming next year it is time to setup rules for this reserve. We can longer use this dividend as Council’s “playmoney” (and I know this word annoys you Mr Mayor – but if you want me to stop using it set some rules!!). If the Council’s wishes and whims continue to determine how this money is to be spent this issue must become an election issue.

Tommy Chong

Whats wrong with it being used as play money? It’s not they’re burning it into nothingness. The town gamble on this and they won, might as well enjoy some luxuries and perks with it.

Frenchy

I don’t think anyone would argue about enjoying the benefits, but the bigger question might be who gets to decide which luxuries and perks?. One school of thought might be that these profits should just be added to town general revenues as profits from the trailer park and marina are. I guess profits from LUI and/or LUSI could be lumped in there too. What about profits generated by the Police Service? Projects and expenditures are then decided upon using the same criteria as all other town expenses are. No more slush funds. Maybe we could even get a break on our tax bill from time to time if we have a great year.

Santa Claus

They aren’t your typical town revenues though. I could see some inherent risk of counting on these things. Does Port Hope for instance enjoy a similar setup? I know they don’t own their own utility.

Frenchy

Revenues from our marina and trailer park could hardly be considered “typical” when compared to other Ontario towns either. How many of them own and operate a marina and trailer park within their towns limits, never mind right downtown?
According to the summary of the business operations at Northam Park over the last 14 years, I don’t think there should be a problem counting on a profit being generated for the foreseeable future. Same goes with LUSI, turned a profit from day one. How big a profit? Nobody knows as financial reports are murky at best…
https://www.cobourginternet.com/cobourg-news/news-2017/1183-holdco-releases-annual-report
In a great year maybe taxes go down a little, in a very bad year maybe they go up a little. Probably all works out in the wash but at least this way it would be all transparent and accountable.