The City of Terrace has successfully retained a $6.18 million deposit from a Chinese-owned company, Taisheng International Investment Services Inc., after the developer failed to meet crucial construction deadlines for a major industrial park. The B.C. Supreme Court ruled in favor of the city, dismissing the company's bid to reclaim the funds.
Key Takeaways
- The City of Terrace will keep a $6.18 million deposit from Taisheng International.
- The ruling stems from Taisheng's failure to meet construction deadlines for an industrial park.
- The court found returning the deposit would be commercially unreasonable.
The Failed Industrial Park Development
In 2014, Taisheng International, a subsidiary of China's QETDZ State-Owned Assets Management Ltd., purchased 1,187 acres within the Skeena Industrial Development Park. The agreement stipulated that Taisheng would develop the park, including essential infrastructure like roads and a groundwater system. In return, the city was set to reimburse the company $6.18 million upon meeting specific construction milestones.
Early proposals for the industrial park envisioned housing various manufacturing facilities, including those for alfalfa protein extraction, wood products, aluminum, and containerized liquefied natural gas. The City of Terrace highlighted its strategic location as a service and supply hub for the region.
Legal Proceedings and Court Decision
When Taisheng International failed to adhere to the agreed-upon construction timelines, the City of Terrace exercised its right to buy back the land, a process completed in 2023. Taisheng subsequently sought the return of its substantial deposit.
B.C. Supreme Court Justice Mark Underhill dismissed the company's application, stating that returning the deposit would lead to an "absurd" and commercially unreasonable outcome. The judge reasoned that allowing Taisheng to recover millions despite failing to fulfill its contractual obligations would amount to an unjustified windfall.
Future Plans for the Deposit
The City of Terrace plans to utilize the retained construction deposit to fund the development of a groundwater system. This initiative is part of the city's ongoing efforts to secure a new developer for the industrial lands, aiming to revitalize the project and bring economic benefits to the region.
