City turns to courts to stop CP Rail from Arbutus Corridor demolition, railway reactivation

The City of Vancouver announced today that it has filed a notice of civil claim in BC Supreme Court to prevent Canadian Pacific (CP) from further demolishing the community gardens on the Arbutus Corridor and reactivating the railway.

Lawyer Joseph Arvay, Q.C., has been hired to defend the City’s case on a constitutional basis and seek an injunction to halt CP’s activities along the Corridor.

Clearing work began in mid-August, weeks after the deadline had passed for gardeners to dismantle their community garden structures. Then last month, talks between senior City officials and CP collapsed.

“Today’s action in BC Supreme Court is a reflection of the City’s longstanding commitment to ensuring the corridor is protected as a greenway for the benefit of all Vancouver residents,” said Mayor Gregor Robertson. “

“The refusal by CP to reach a reasonable agreement on the future of the Arbutus corridor is tremendously disappointing and frustrating, but the City will continue to responsibly advocate for citizens’ interests and strongly oppose the reactivation of the rail line. The City will not do a disservice to taxpayers by reacting to threats and bullying on the corridor by spending tens of millions dollars more than the land is worth.”

The municipal government claims it has offered CP with a “fair price,” but the railway company has repeatedly countered, saying restrictive bylaws designating the 45-acre, 11-km long Corridor as a greenway and car-free transportation corridor do not permit residential and commercial development.

The issue of zoning was taken to the Supreme Court of Canada in 2006, and the City won the ruling on having the final say of what the Corridor can be used for.

On September 22, CP published an open letter emphasizing that the value of the Corridor is significantly higher than what has been offered by the City.

The City of Vancouver has offered $20-million for the land, but CP is requesting a minimum of $100-million. The company says the Corridor is worth more than $400 million, but it is “prepared to accept far less in order to reach an agreement” as it recognizes the importance of the right-of-way to Vancouverites.

Here is the full open letter by CP CEO E. Hunter Harrison:

Much has been written and reported in recent weeks on the future of the Arbutus corridor, an 11 km rail line owned by CP that runs from False Creek to the Fraser River in Vancouver, and is the subject of ongoing discussions between CP and the city.

Many of those reports have been contradictory, and, at times, inflammatory. I would like to provide the context and clarity necessary for residents, and all stakeholders, to fully understand the issue.

The corridor, zoned by the city expressly for transportation, is the property of CP and has fallen into disuse over the past decade as the company and the City of Vancouver have sought to come to an agreement for its sale or disposition. During that time, CP has put forth a variety of proposals, some of which would involve no cost to the citizens of Vancouver, including a plan that would see small portions of the corridor rezoned for development by CP with the remainder donated to the city for the recreation and enjoyment of its citizens.

This proposal was part of a Visioning Process undertaken in 2006 with the direct involvement – and endorsement – of community groups that represent the residents along the corridor.

A land swap was another option tabled by CP, which would see a number of parcels of unused City land traded for the corridor.

These proposals, and others, have been rejected.

At the heart of the issue is the value of the corridor. Based on independent third-party appraisals using the value of adjoining lands – the standard method for assessing this type of rail corridor – the Arbutus corridor has been valued at more than $400 million. As this was done a number of years ago, the value is significantly higher today. Recognizing the importance of this property to the citizens of Vancouver, CP has been prepared to accept far less in order to reach an agreement. The City of Vancouver has, in turn, offered only a fraction of that discounted price.

We were disappointed last week to be asked back to the table only to find the city not prepared to move reasonably on its position. We fear that due to internal city politics, the council is not able to reach a fair and equitable settlement. CP management has a responsibility to its shareholders to generate a return on its assets. Simply put, we must get fair value for our property or put it to use.

The new CP is not a company that will let this corridor lay dormant while discussions with the city drag on for another decade. If there is no agreement we will use it for rail operations, and expect to have the rail line up to operating standards later this fall.

Contrary to many reports, CP has been and continues to be flexible in its approach. The company stands ready to sell this asset, but at a fair price, or to find a creative solution that satisfies all stakeholders at no cost to the citizens of Vancouver.

E. Hunter Harrison
Chief Executive Officer
Canadian Pacific​