Kingsville council is pursuing a bid to expropriate a four-acre parcel of land leased by an aggregate company at the town harbour.
Part of a longstanding battle between the town and Southwestern Sales Corp., the municipality wants the land as a buffer strip between Mettawas Park and the aggregate operation. It also wants to use the property for parking.
The town has hired Windsor lawyer Jeffery Hewitt to represent the municipality at the expropriation hearing. A hearing date has not been set.
“This is a long story,” Kingsville Mayor Nelson Santos said. “We’re only going to expropriation because the municipality asked to lease the property and they said no.”
The port of Kingsville was originally owned and administered by the federal government. In the 1990s, Ottawa announced a divestiture program that involved handing over hundreds of small ports and airports to local municipalities.
The Kingsville agreement, signed in 1999, handed over ownership to the town and the local Port Users Association, a group that included fishermen, fish processing companies and Southwestern Sales.
It was a unique agreement: all the other Canadian municipalities gained full control of their ports.
Santos said the town began the process of acquiring a lease for the four-acre parcel nearly a decade ago and that Southwestern put up stiff resistance as soon as the town made its intentions known.
He said the company began depositing broken up concrete on the site — an action, he said, that has put it at odds with the Ministry of Environment and the Essex Region Conservation Authority.
“It’s an effort to keep the municipality from using the property. They’ve created that additional concern.”
The town put its case before an arbitration hearing in 2018 and lost. It was required to pay the port users’ legal costs — more than $30,000.
However, the ruling was narrow in scope, Santos said.
“It didn’t stop the process. It just meant we had to go to a full rationale…. That they needed more information.”
Santos said the aggregate company has argued the municipality had no authority to zone lands previously owned and administered by the federal government. He said he disagrees and pointed to the ports and harbours handed over to municipalities that are now zoned by those municipalities.
“It’s more delay tactics,” the mayor said. “They are using every process available to them before we go to the main question. They are exhausting all their avenues.”
It’s uncharted legal territory which makes it very, very uncertain about the outcome and the costs — for both sides.
Jacob Koehl, a consultant for Southwestern Sales, said the port users will “continue to resist” any attempt by the town to take over the property.
He said when the town and port users took over ownership of the port from the federal government, all three parties agreed it would continue to operate as a commercial enterprise. “The town wants to ignore an agreement we entered into in 1999. We find that unacceptable.”
As part of the divestiture process, the joint owners — the town and the Port Users Association — entered into a 50-year lease with the newly created Port Management Corp. for the entire port property. That lease expires in 2049.
The Port Management Corp. then signed subleases with individual businesses, including Southwestern Sales, for parcels of property within the port.
Koehl said it is that complex ownership structure as well as legal agreements over the continued commercial use of the property which have made Kingsville’s expropriation case unusual.
“It’s not a typical expropriation,” he said. “Typically a municipality expropriates a property because they need it to do something else (like) a commercial development or an easement … and they justify it; it’s almost a slam dunk.”
The town announced plans in 2013 to expropriate four acres of Southwestern’s 13-acre site and agreed to arbitration over the property’s future.
Koehl said that in 2018 an arbitrator gave the Port Users Association standing to oppose the expropriation and ordered the town to pay $32,000 of the port users’ legal costs.
“The onus was on the town to show that our claim was frivolous,” Koehl said. “They did not do that.”
He said it was a “business decision” to allow contractors to dump concrete and asphalt at the site and not an effort to thwart the town. The company did some crushing of the material but stopped after complaints over dust emissions, he said.
Koehl said the town has “many hurdles to overcome” in its expropriation effort. “You have all sorts of issues here — constitutional issues, federal regulatory issues — that haven’t been tried before because Kingsville is such a unique situation.
“It’s uncharted legal territory which makes it very, very uncertain about the outcome and the costs — for both sides,” Koehl said.
Santos said in hindsight the town should have negotiated an agreement making the town the sole owner.
“We were a small municipality pre-amalgamation,” he said. “We didn’t have a lot of internal support, staffing, management… it wasn’t within their vision … they just wanted to maintain the status quo. The leadership at that time (also) didn’t want to get into land ownership.”
Full expropriation would be a costly option, mayor says
Kingsville Mayor Nelson Santos said expropriating the entire harbour is an “option” but not one the town is currently considering. He said such a move would be time-consuming and costly.
“The ownership change wouldn’t alter the current operations other than the portion (four acres) the town has sought for the last eight years,” he said.
Southwestern Sales consultant Jacob Koehl said while the town would probably like to have the entire port ,“I don’t think it’s a viable option.”
He said the port is leased until 2049. The cost of terminating the lease and the damages to businesses and workers would be a significant liability for the town, he said.
“I can’t imagine how many millions of dollars that would be.”
Koehl said 200,000 to 300,000 tons of aggregate pass through the Port of Kingsville annually.
“It’s a vital service to Kingsville” and the Essex County construction industry, Koehl said. “The businesses that are operating down there are long-term, are viable and the intent is to keep on going.”