Heather Wright/The Independent

Lambton County taxpayers have turned over $11 million in bailouts to keep the Sarnia-Lambton Research Park afloat.

That’s according to a report by the county’s Chief Administrative Officer, Stéphane Thiffeault, prepared for politicians as they debate the $321 million budget Feb. 4.

The Research Park works in cooperation with Western University. The Modeland Road facility is an incubator for new companies, often in the biochemical field. Businesses of any kind can rent space in the facility, with the thought that it would allow business leaders to create new ideas with the people around them.

For some time, telemarketing centres thrived there. 

But since the pandemic the facility has struggled. In 2020, companies left the building, leaving about 80 per cent of the floor space empty.

Thiffeault, in his report to county councillors, said “The Research Park has had cash flow issues for quite some time. Although its revenues can generally cover its operating expenses, its revenues cannot cover its operating expenses and its debt obligations.”

Starting in 2020, the county found ways to provide extra cash to the struggling organization including a $5.4 million in loan forgiveness in 2020, operating grants ranging from $400,000 to $642,000 and another grant of $1.35 million in 2024.

In September Research Park officials asked the county to consider a “debt holiday”  consolidating its debt to obtain lower interest payments, then deferral payment of the principal and interest payments for its debt, with the county and its taxpayers picking up the tab.

The board also wants the county continue to pay the $661,000 in operating funds it normally contributes. County officials estimated it would require a 1.4 per cent tax increase.

And it didn’t fly well with local politicians.

 “You’re bankrupt; you’re insolvent; you can’t carry your debt load, but now were asking council and our taxpayers to consider it,” said Lambton Shores Mayor Doug Cook at the time. He wasn’t the only one to push back. Brooke-Alvinston Mayor David Ferguson said the debt holiday with “lock in one council and dump (the financial burden) on the next.” He asked for the county to get a valuation of the park.

Katherine Albion, the executive director of the Research Park told councillors Jan. 21, the property had been evaluated at $18 million. The Research Park has $17 million in debt.

Albion told councillors the appraisers said many property types have declined in value since 2022 and there would be “very few prospective buyers” of the complex right now.

Then, Albion had another proposal to keep the park going. She suggested the county’s Community Development Corporation, which holds the mortgage for the property, should consolidate and refinance the property’s mortgage over either 15 or 30 years and provide a grant of between $845,603 to $1,363,603 to the park. It would payback a $900,000 loan given to the Research Park last year.

“The research park has a strong record of success,”Albion said. “We will, and we continue to fulfill the mandate given to us by Lambton county council… as we look ahead, we’re excited by the exciting new and emerging opportunities that we are seeing and developing that will continue to grow and benefit the communities of Lambton County.”

Warwick Mayor Todd Case was among those who questioned the latest plan. “It’s a money in, money back out situation again. I appreciate the fact that you’re paying back grant given last year, but in all honesty, I don’t understand the rationale around it …because you’re asking for even more,” he said Jan. 21.

Councillors will debate the merits of the plan but, likely weighing heavily on their minds is the possible impact on taxes.

Before council begins deliberations, county staff has produced a budget with a 3.48 per cent tax increase which will add about $18.23 for every $100,000 of assessment on a home. The proposals to bail out the Research Park could add another 0.83 to 1.34 per cent tax increase on top of that.

Council began its deliberations at 9 am Feb. 4.