The money North Bay Hydro receives from the sale of its former headquarters will not go to the city but will be used to fix power lines and transformers, says Coun. Mac Bain, chairman of the utility.
Dr. Rod Johnston confirmed Monday night he had purchased the Fisher Street building for $1.1 million in a deal that closes May 28.
“And when it does close that money will be going directly into the long range capital projects budget of the hydro distribution company,” Bain said.
“The funds will help us fix lines, replace old transformers and upgrade hydro substations in the downtown core.”
Funding its contribution
While North Bay Hydro remains municipally-owned, Bain said, the only commitment hydro has is to repay a $20 million note held by the city.
Hydro is already paying the city $1 million a year toward that note and will continue to over a 20-year period.
“That’s how city council is funding its contribution to the new hospital,” Bain said.
Deputy mayor Peter Chirico said council has no intention of pushing the hydro board to accelerate the repayment using the $1.1 million from the sale.
“There’s absolutely no pressure,” Chirico said.
“We’re quite content with the existing agreement.”
Generating revenue forever
Bain said the deal works well for all parties.
“That building will generate property taxes for the city for the first time, since none were paid when North Bay Hydro was in there,” Bain said.
“And new businesses it attracts will also be paying business taxes to the city, so the building will be generating revenue forever.”
Bain added that Johnston’s offer was the best of any received for the building.