Despite white elephants, Island city's economy thunders on with tourism and mining plays
BY WI STAFF
White elephants - a shuttered pulp mill and a failed cruise ship terminal - bookmark the Vancouver Island city of Campbell River, but mining and hydro upgrades mean the economy keeps thundering on.
Last month, a scrap-metal contractor and potential businesspeople were picking over the bones of the former Elk Falls pulp mill, once a major employer that was permanently shut down by Catalyst Corp. On the downtown waterfront all that remains of a $16 million publicly funded cruise-ship terminal built for the Campbell River Indian Band in 2007 is an empty dock and an abandoned market. The last cruise ship to visit was in 2009, the only ship to arrive that year.
The Elk Falls pulp mill was temporarily closed in 2008 and shut down two years later. Richmond-based Catalyst sought creditor protection this January after its creditors rejected a plan to cover its $645 million debt. Among those sifting through the mill site was a group hoping to salvage large water tanks for use in an aquaculture play.
Still, this city of 31,000, long known as the "Salmon Capital of the World," is far from an economic basket case. Last month, crews were demolishing old downtown stores to make way for a low-rise office building for Seymour Pacific and Broadstreet Properties. Just south of town, a new 36-unit oceanview condominium development is underway, and local realtors say the sluggish resale housing market has suddenly come to life.
At an average price of $280,000, Campbell River house prices are lower than in the Comox Valley ($344,000) or Nanaimo ($349,800) and are down about 20 per cent from the peak three years ago. March home sales in Campbell River were up a startling 31 per cent from a year earlier, reports the Vancouver Island Real Estate Board.
The reason for the sharp sales spike could be a return of consumer confidence. Fuelling this is a $1.35 billion BC Hydro replacement of the local 65-year-old Jim Hart Generating Station.
Coal mine and more BC Hydro expects to award a construction contract by next summer and have the first new generating unit running by 2017, with the project complete in 2018. Construction would create 400 jobs annually for five years and Campbell River Mayor Walter Jakeway says they are needed in a community with an estimated unemployment rate of more than 12 per cent.
More jobs could be generated after the controversial Quinsam coal mine, just 20 kilometres from downtown Campbell River, had an extension of its mining operations approved in January. The project, which has seen protests from local environmentalists, could still face a review from the Canadian Environmental Assessment Agency pending completion of a review by Fisheries and Oceans Canada. The original mine's been in operation since 1986.
David Turnbull, CEO of Hillborough Resources, which operates the mine, pledged the company would "exceed all regulatory requirements and protect key local environmental values." The only underground coal mine in B.C., Quinsam has reserves of about 40 million tonnes of coal and employs more than 140 people.
Meanwhile, the Myra Falls copper-gold-silver mine, owned by Swiss-based giant Nyrstar, is running full tilt in a provincial park about 90 kilometres from Campbell River. In operation for 45 years, the mine employs 282 people.
In all, the fortunes of Campbell River are looking up, said veteran realtor Roy Grant of Coast Realty Ltd., adding the salmon fishing is still world-class and the city, close to Mount Washington's ski slopes, offers excellent golf and boating. "It is just a beautiful place to live."
from Western Investor May 2012