Provincially owned B.C. Pavilion Corp. has agreed to defer rent on a new floatplane terminal for nearly 25 years - allowing the terminal developers to lower the rent they charge to floatplane operators who balked at the cost of using the new facility.
"They [PavCo]offered to defer the rent as long as we passed 100 per cent of that on to the operators - which of course we did," Vancouver Harbour Flight Centre president Graham Clarke said on Wednesday at the official opening of the new facility.
Mr. Clarke was unable to provide an exact figure for the deferred rent, saying the sum would have depended on traffic volume. But VHFC has recently reduced the stated capital cost of its terminal from $22-million to $18.5-million, a decrease that reflects a rent deferral until 2034.
With the rent concession from PavCo, VHFC lowered its charges to floatplane operators from $12 a passenger on flights in and out of the harbour to $9.50. The lower rate helped draw floatplane operators Seair Seaplanes and Tofino Air.
The heads of both companies - which broke from an industry group boycotting the new terminal - say the facility gives them a way to crack a downtown market that up to now has been dominated by Vancouver-based Harbour Air, which operates from a Coal Harbour site west of the new terminal.
"We're happy to be here; we can't wait to get going - there is finally a public-access facility in Vancouver," Seair president Peter Clarke said at the opening.
In 2004, floatplane operations were bumped from a base at the foot of Burrard Street to Harbour Air's current site to make room for the convention centre expansion. VHFC, a private-sector consortium, built a new terminal to replace the Coal Harbour base.
For the past few months, the Vancouver Commercial Seaplane Operators Association - spearheaded by Harbour Air - has lobbied fiercely against the new terminal, saying costs were out of line with average rates of $3 a passenger at other terminals.
VHFC maintains the rents are reasonable for a new facility built to stringent safety and environmental standards.
The city's agreement with Harbour Air stipulates the company is to move from its current Coal Harbour site by 2012 or when a new terminal opens, whichever comes first.
The city has so far held off on giving notice to Harbour Air, in the hopes that the province can help broker a deal between the two sides.
PavCo's rent deferral to VHFC highlights shortcomings in how the province carried out the project, NDP MLA Spencer Chandra Herbert said on Wednesday.
"Why should B.C. taxpayers be subsidizing a private, for-profit flight centre which is also gouging the user with the highest rates in all of B.C.?" Mr. Chandra Herbert said.
Mr. Clarke said that taxpayers would get their money back through a competitive, open terminal that would drive down fares, noting that Seair is offering a $69 flight to Nanaimo, lower than Harbour Air.
"As a result of competition," he said, "this will be good for government - because they [the government]are going to pay less for the tickets they buy."