Dr. Paul LaFleche, Chair Kespuwick Developments Cornwallis Park, Nova Scotia

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Dr. Paul LaFleche, ChairKespuwick Developments
Cornwallis Park, Nova Scotia
Rural Matters The Rural University in Miramichi
City October 27th, 2002
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Whats on the Agenda?

• The closure of CFB Cornwallis in 1994
• The failure of the initial 18 months
• The re-grouping and change
• The 1996 Strategic Plan that led to success
• Cornwallis Park and the surrounding community
  today

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CFB Cornwallis

• The major employer in the Western Annapolis
  Valley since the Second World War
• A cultural anchor for the areas proud military
  tradition
• The largest local purchaser of goods and services
• A major local recreational facility

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CFB Cornwallis

• CFB Cornwallis closure announced in 1993
• Closure became a 1993 election campaign issue
  whereby the Opposition party promised to save
  the Base for the local population
• Military base closed subsequent to the election
  despite the Opposition victory
• Base assets saved through the creation of a
  development agency

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CFB Cornwallis

• Base development agency (CPDA) operated
  separately from newly created regional
  development authority (WVDA)
• CPDA created through a contractual arrangement
  with ACOA
• CPDA Board appointed by ACOA Minister
• CPDA CEO President appointed by ACOA

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Start-up problems

• Municipalities and regional development authority
  not involved
• CPDA CEO not supported by CPDA Board
• Infrequent Board meetings
• Lack of public information
• No development plan
• Local protest groups active
• Intense media interest
• Large operating losses with impending insolvency

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Consolidation Period

• Federal Auditor Generals investigation
• ACOA trusteeship
• Replacement of CEO by strong financial manager
• Hiring of Director of Marketing
• Approached regional development authority for
  assistance in developing Strategic Plan

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Blockages to Success

• The Board was not viewed to be representative or
  fairly selected
• Board members were compensated
• Meetings were held in camera
• There was no public strategic plan
• No one (Board or staff) would communicate with
  the organized protest groups
• Municipalities were not on side and publicly
  protested their lack of involvement
• The Agency and Municipality were in a bitter
  public tax dispute
• ACOA was treated with little respect beyond their
  cash contribution

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Blockages to Success

• The regional development agency was keep distant
  from all activity and planning
• Media and community allegations of fraud and
  asset loss were left unchallenged
• Staff appointments were made arbitrarily without
  notice or process
• CEOs had been from away and lived away except
  four days a week
• Contracts were not properly tendered
• The Provincial economic development officials
  were not informed or involved
• There was no vision for what role the assets and
  the Agency could play in re-developing the area

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Renewal - 1996

• Replacement of 50 of Board, including the
  addition of ex-officio members from the Province,
  ACOA and the local RDA
• New Board Chair
• Board meetings opened to public attendance
• New Mandate developed
• Strategic Plan developed in consultation with
  local community
• New General Manager (local hire) responsible for
  development, financial management and
  administration
• Public hiring competitions with interview boards
• Adoption of Provincial tendering guidelines

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Renewal - 1996

• Elimination of CEO position, Director of
  Marketing and Director of Facilities
• General down-sizing of agency staff in
  maintenance and facilities area
• Creation of a development officer group
• Creation of a community newsletter and Strategic
  Plan scorecard
• Regular Board rep meetings with community protest
  association leaders
• Media interviews
• ACOA and Province sought out for their
  connections and advice
• Cooperation with Municipalities on objectives

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The Problem in a Nutshell

• Nothing could happen unless the community would
  come around and provide support
• The areas economy was depressed in several areas
  including fishing, forestry, HRDC employment
  insurance changes, Federal and Provincial office
  and health service cutbacks
• The area was three hours drive from Halifax
• Local literacy levels were low and there was not
  an abundance of skilled labour outside of the
  industries that were in decline
• The population was declining and shifting upward
  in age distribution
• The modern economy is built on intellectual
  capital former military bases are physical
  assets with high operating costs

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The Opportunity in a Nutshell

• There was a sizable base of retired professionals
  and skilled workers from across North America
• The regional development authority was the first
  to get going in the Province and was very
  progressive
• The area had a past tradition of success in
  business in the natural resource area
• The area was connected by ferry to the New
  England market for shipping and tourism
• The climate was one of the best in Canada
• The Municipalities, Province and the Federal
  Government were committed to make the
  re-development work whatever the political cost
  tough decisions could be made

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New Mandate

• Lever the physical and financial assets
  available to the former military base to assist
  economic development within the Western Annapolis
  Valley area (focus on the broader region in lieu
  of the military site)

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New Strategic PlanStrategic action in the
following areas

• Residential Housing (246 units)
• Commercial Buildings (barracks, military admin
  and service buildings)
• Infrastructure Upgrading Divestiture(roads,
  water, sewer, power)
• Demolitions (high maintenance assets with little
  value)
• New Development (local job creation)
• Finances (restore operating balance/ develop
  capital fund)
• Organizational Structure (focus on development in
  lieu of facilities maintenance)

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Residential Housingcommunities best govern
themselves

• Creation of a true residential village with the
  former PMQs through ownership transfer
• Partner with professional residential
  re-developers to market the housing to external
  buyers limit impact on local market
• Attract buyers that would invest in property
  upgrades
• Create a true community with a community centre
  and community association
• Amortize facilities and taxation costs over a
  larger population base
• Increase interest in other real estate in the
  area through increased prospect traffic

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Commercial Buildings LandBusiness people
create jobs not development agencies

• Transfer to job creating owners at Net Zero cost
  with contracted job creation targets let
  business people do what they do best with the
  base assets create jobs and build businesses
• Maintain as is until new owners are identified
• Develop a concerted marketing effort for the
  commercial properties targeting businesses which
  fit with the local culture and resource base
• Divide the property into an industrial park and
  a business park
• Create a highway access ramp to the industrial
  park
• Upgrade properties in concert with developers
  needs

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InfrastructureTransfer it to the appropriate
operator

• Transfer all road, water and sewer infrastructure
  to the local municipality
• Transfer power distribution system to power
  utility
• Transfer communications system to telephone
  utility
• Encourage telephone utility to upgrade local
  switching capacity for high speed internet access
  and digital communications

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New Development ActivityKey Focus Areas

• Tourism-related businesses
• Training-related businesses
• Conference facility built around summer cadet
  camp
• Non-government Offices/Government Offices
• Service Providers
• Commercial /Industrial businesses consistent with
  the local economy

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Development Privatization Initiatives 1994 -
2002

• Privatized almost all CFB Cornwallis buildings
  not required for the ongoing use of the
  conference facility
• Privatized the majority of the land used by the
  former base
• Sold or optioned various industrial lots in the
  newly developed industrial park
• Sold all former CFB Cornwallis housing (246
  units).

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Development Privatization Initiatives 1994 -
2002

• The local power and telephone grid (NSPI
  Aliant)
• The water and sewer system (Annapolis County)
• The former CFB Cornwallis maintenance operations
  (Annapolis Maintenance Services)
• The former base CANEX (Basin Wellness Society)
• Responsibility for the redevelopment of the
  recreational facilities (Basin Wellness Society)
• Responsibility for local economic development
  (WVDA)

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Major Development Initiatives500 (year-round) to
1000 (peak Summer) jobs

• Shaw Wood exported manufactured furniture
• Acadian Seaplants exported seafood products
• Darmos Industries exported toys
• Pearson Peacekeeping worldwide peace-keeping
  training institute
• Fundy Fibreglass marine products
• HAL Consulting training consulting

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Major Development Initiatives500 (year-round) to
1000 (peak Summer) jobs

• Annapolis Maintenance - local maintenance
  business
• WVDA regional development authority
• Bear Woods exported wood products
• Cornwallis Mall local shopping centre
• ABCC seasonal) provincial conference facility
• Service Zone international call centre

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Kespuwick Developments Current Mandate

• Operate the residual assets owned by the
  corporation with regards to the benefit of the
  local area

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The Path Forward

• Cornwallis Park Development Agency (CPDA)
  achieved the goal of developing the major assets
  at the former CFB Cornwallis, including the
  creation of local employment by 2002
• The Agency has successfully transitioned into two
  business elements The Annapolis Basin
  Conference Centre and the Kespuwick Initiative
  Program (venture funding entity)
• The remaining assets have been integrated into
  the local economic development infrastructure

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Current Status

• Kespuwick Developments remains a small residual
  board governed not-for-profit entity focused on
  managing the residual assets which consist of a
  few buildings, land receivables and cash.
• Kespuwick Developments will focus on operating a
  net return venture investment fund using its
  remaining cash assets.
• Annapolis Basin Conference Centre (ABCC) will
  continue to evolve as a separate entity with a
  vision of separate board governance and private
  ownership.
• The long-term financials for both ABCC and
  Kespuwick developments look positive and viable

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The Path Forward - Kespuwick Developments

• KD continues to be governed by a community Board
  of Directors with the mandate that cash,
  receivables and 200 acres of undeveloped resource
  land (Kespuwick Industrial park) are used to the
  benefit of local economic and social development
• KD continues to own the Annapolis basin
  Conference Centre until devolution can be made to
  a separate board or to a private partner
• KD continues to manage the remaining Net Zero
  property sale contracts, the Common Services, and
  the cash investments through its accounting group
  name changed to Investment Management
• Divest the Net Zero contracts as owners prove job
  commitments

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The Path Forward - Annapolis Basin Conference
Centre

• Eventually move to a separate board with
  experience in the business sector and local
  representation
• Search for a potential private partner/investor
• Operate separately from KD
• Continue to operate Camp Acadia (potential 7 year
  contract)
• 10 year Strategic Plan developed with ACOA funding

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The Path Forward - Economic Development

• The responsibility of the Western Valley
  Development Authority since 2000.

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Conclusion

• Exceeded the goal of the replacement of the 450
  jobs in place when CFB Cornwallis closed
• Completed the 5 year ACOA CFB Cornwallis
  development contract in 4 years
• Turned the financial operation around from
  effective bankruptcy in 18 months in June 1996 to
  financial self sufficiency in 1998
• Turned the local community around from a position
  of constant public protests to support in 18
  months from 1996 to 1998
• Placed productive assets in the hands of private
  and public owners who could effectively further
  develop and leverage them
• Raised the profile of the region as an investment
  opportunity through a national communication
  campaign
• Successfully turned around the Nova Tire (TRACC)
  operations from potential bankruptcy in 1998 to a
  position whereby it could be sold to affect
  development in another region of NS

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Conclusion

• Contained and cleaned up a major tire fire in
  1999
• Redeveloped the Nova Tire physical assets into a
  major call centre
• Created a net increase in construction activity
  through the sale of the housing units and
  re-created a true community at Cornwallis Park
• Boosted local retail sales through the creation
  of jobs and a community and associated
  construction activity
• Completed a Hwy 101 interchange for better
  access to the Industrial and Business Parks
• Attracted increased event traffic to local
  business through ABCC activity
• Promoted the community as a regional destination
  through ABCC

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Lessons Learned

• The loss of an areas major employer is a
  traumatic social as well as economic event
• The community must be involved in the transition
  in a very public manner
• All discussions must be open
• People cannot be perceived to profit from the
  situation volunteerism is the order of the day
• No matter how well things are communicated a
  grieving period is necessary
• Its hard to move forward until the grieving is
  over
• Plans must be community-developed and broadly
  communicated
• Government agencies can be more important for
  their advice and connections than their funding
• Municipal units provide positive leadership if
  involved