Flavelle sawmill on historic Port Moody site to be shuttered by end of October
Derrick Penner
The Vancouver Sun
A sawmill has operated on the Flavelle mills site since 1905, but its owner cites “disproportionately high municipal property taxes,” as the reason for ending operations.
The Flavelle sawmill, which has operated on a 14-hectare plot of Port Moody’s waterfront since 1905, will be closed at the end of October according to its owners. Photo by Arlen Redekop /Postmedia News
The Flavelle sawmill, last in a line of forestry operations that have occupied a central 14-hectare plot of Port Moody’s waterfront since 1905, will fall silent at the end of October according to its owners.
Surinder Ghog, CEO of the AP Group of Companies, broke the news to Flavelle’s 70 employees Monday afternoon citing “disproportionately high municipal property taxes” that hit $2.4 million in 2019 from $1.6 million the year before.
“It is now evident that there is no constructive path forward for this mill,” Ghog stated in a news release.
A rising property tax bill wasn’t the only consideration, said Bruce Rose, the company’s executive vice-president. The mill had also received a substantial increase in lease rates on the water lots it uses for log storage on Burrard Inlet.
Combined, the two tax bills amounted to almost $3 million, which Rose said “is just not economic, is what it comes down to. There is just no rationale to invest any more money in this and attempt to get any return.”
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There is a potential path forward for redevelopment of the 14-hectare site into some 3,400 condo units in towers up to 38 storeys, according to an initial master plan the company proposed to the city of Port Moody in 2018.
Port Moody council at the time approved the proposal as an amendment to the city’s official community plan.
However, AP Group’s conclusion came as a surprise to United Steelworkers Union Local 2009 president Al Bieksa, who said the membership there had been advocating on behalf of the company with its concern over property taxes, and thought they had a commitment the mill would keep running for a few more years.
Bieksa said the union was among those that advocated for a provincial legislative change that allowed for short-term exemptions to higher property taxes that would have come with that, for which he thought AP Group was going to seek an extension.
“We were promised that we were going to get a fair and equitable collective agreement,” Bieksa said. Their last agreement expired in 2017. “So everybody was kind of blindsided by the decision.”
Mayor Rob Vagramov said that exemption shielded the mill from “the significant increases they would have faced,” from the OCP change the company itself asked for.
However, the proposal wasn’t just to change the plan from industrial to residential, “but the single largest development in Port Moody history,” Vagramov said.
He voted against it as a councillor, Vagramov said, but “the previous council and administration gave them everything they asked for.”
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Rose said the plan didn’t get as far as an application to rezone the property.
“It is still industrially zoned in Port Moody,” Rose said. “We’re just going to look at all options across everything, whether it’s industrial, commercial or whatever.”
Rose said Flavelle’s 40 million board feet worth of production will be shifted to its other mills or to third-party, custom-cut mills that it has arrangements with to meet the needs of customers.
However, Bieksa argued AP Group should lose an equivalent amount of timber-cutting rights, which is referred to as tenure, because the union had helped the company win a temporary measure calling for the property to be taxed as just a sawmill.
Rose, however, said AP Group doesn’t hold large amounts of tenure to start with and some of the production lost at Flavelle will be shifted to other mills represented by the United Steel Workers.
“We have five or six manufacturing operations in the interior, as well as other operations on the coast,” Rose said. “This is first and foremost a forest products and operating company.”
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