Heritage Rail has a new lease after city council voted to approve a new agreement at its regular council meeting July 24.
The Fraser Valley Heritage Railway Society (FVHRS) had been without a lease agreement with the City of Surrey for several months.
Corporate Report No. R132, issued by Scott Neuman, GM for the city’s engineering department, recommended council approve a new lease agreement to allow FVHRS to continue to occupy city-owned land at 5554 – 176 Street. The terms of the new lease agreement include: term of four years (July 1, 2023 – June 30, 2027); a lease rate of $112,000 for 2023, and $188,424 for the remaining term; maintenance and utilities to be the responsibility of FVHRS; insurance to be split between both, with the buildings covered by the city and contents covered by Heritage Rail; and general commercial liability falling to FVHRS with a policy to name the city as an additional insured.
“FVHRS is the operator of Heritage Rail, which runs a tourism rail service in Cloverdale,” the corporate report noted. “FVHRS currently operates railcars on the B.C. Transportation Finance Authority (BCTFA) land and is seeking to resume providing services on the Southern Railway (SRY) track and B.C. Hydro railway corridor from Cloverdale to Sullivan.”
Four months ago in March, city council asked staff to negotiate a new lease agreement with Heritage Rail to include the terms and conditions set out in the Corporate Report No. R033.
SEE ALSO: Surrey council to vote on possible new lease agreement for Heritage Rail
SEE ALSO: Still no lease agreement for Cloverdale’s Heritage Rail
The current report (R132) noted FVHRS recently signed a three-year agreement with BCTFA to operate the heritage railcars on their short Cloverdale rail spur. It also noted FVHRS is in discussions with both SRY and B.C. Hydro to sign agreements so the Society can run trains on the mainline up to Sullivan Station later in 2023 (something the railway is currently unable to do).
“The city is not a party to any of these agreements.”
The report added the difference in rental amounts for the first year of the lease and the final three years is because the 2023 grants budget was already approved.
“It is expected that FVHRS will continue to apply to council for an annual grant in lieu of rent for the duration of their lease with the City, under the City’s policy for leasing of City lands and buildings and in alignment with the terms of this lease agreement.”
City policy on leases for non-profit organizations indicates that rent must be set at “fair market value” with the ability for such organizations to apply to the city for grants in lieu of rent.
“The proposed lease will be consistent with other City leases to non-profit organizations, allow FVHRS to continue its Heritage Rail operations and eliminate the city’s exposure to risk associated with Heritage Rail operating on the SRY mainline,” the report concluded.
editor@cloverdalereporter.com
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