City inks deal with Chinese wood processing company

AERIAL view of the 20 acres on the southside the city is leasing to a Chinese wood company. That
AERIAL view of the 20 acres on the southside the city is leasing to a Chinese wood company. That's Hwy16 running along the bottom of the photo with Kenney St. on the left and the 5000 Block of Keith Ave. at the top. The section on the far right is not owned by the city.
— image credit: CONTRIBUTED

THE City of Terrace has finalized a deal with a Chinese wood processing company to lease it city-owned land on the southside for the next 10 years.

Yaorun Wood Co. Ltd, which also operates a wood processing plant in Burns Lake, will pay $10,000 a month, or $120,000 annually, to use the Keith Ave. land, which was once a log yard for the now-dismantled Skeena Cellulose/Terrace Lumber Company sawmill.

The approximately 20 acres is bounded by Kenney to the east, Keith to the south, CN's rail line to the north and to nearly Blakeburn to the west.

It had been listed for sale for $1.5 milion.

The company will also pay property taxes, which will be determined depending on its exact plans for the property, said Heather Avison chief administrative officer for the City of Terrace.

“It's pretty limited use,” said Avison, referring to lease conditions. “Outdoor logging yard, basically comprised of some storage for raw wood.”

This deal is good news for Terrace, says Avison.

“It means $120,000 worth of revenue, for starters, for the lease, plus having taxes paid on the property which we haven't had for some time,” she said.

Full details of the company's plans for the land will be released closer to the end of the month, said a spokesperson for Yaorun Wood here in Terrace.

The city has been in negotiations with the company since September. Yaorun was originally interested in leasing the airport lands, but pulled back on that agreement late last year.

Yaorun has been interested in Terrace for some time, even going so far as to invite, and partially pay for, Mayor Dave Pernarowski's late-summer trip to China.

According to the lease, Yaorun takes control of the property tomorrow and the city says it expects it to begin developing right away.

“I think they do plan to start as soon as possible,” said Avison. “My understanding was that they had wood to move, that they needed a place to store wood initially, but that would be a question for Yaorun to be certain.”

The acreage was once part of a much larger industrial wood-processing land package that stretched across Kenney all the way east to the Sande Overpass.

It has housed various sawmill configurations over the years, the last being a mill that opened in 1988 under the ownership of Skeena Cellulose.

That company went into financial difficulty in the late 1990s, sparking years of uncertainty and financial support by the NDP government of the day in a bid to keep Skeena Cellulose's Port Edward pulp mill and Terrace sawmill open.

That support ended when the current provincial Liberal government was elected in 2001, causing the region to fall into years of a regionally-based recession.

The Terrace sawmill opened in 2005 under the local ownership of the Terrace Lumber Company but closed for good a year later.

The sawmill was sold off and dismantled shortly thereafter and the city ended up with the land because of unpaid taxes and an unpaid loan.





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