Development Wars in Vancouver Island’s Union Bay

Two historical forces that shaped Vancouver Island meet stiff resistance as residents 
square off against a developer’s vision of 
leafy residential streets and a coal miner’s plans for a massive underground mine.

Brian McMahon stops the big SUV and opens the door. To an observer unaccustomed to the ways of Union Bay, the yellow sign nailed to a tree alongside the old Island Highway looks like a simple case of guerrilla marketing – a small-time septic company cadging some low-cost advertising – but McMahon thinks he knows better. Pulling the sign from the lone tree standing just inside his cleared property, the developer explains: “Someone keeps telling everyone we’re putting in a septic system, we’re putting in a sewer system.”


McMahon suspects he knows who the provocateur might be, but he’ll only hint at the person’s identity – a bit of circumspection that is probably well advised. After all, there has been more than one trip to court around here, as local residents tried to stop the development or faced off against each other over allegations of defamation and misfeasance. McMahon has the patient air of a high school principal as he describes the myriad twists and turns the process has taken: stacked town hall meetings; approvals followed by reversals; unanticipated environmental landmines; arbitrary behaviour on the part of civic officials; and beyond all of this, the slow grind of a regulatory process that has encompassed four levels of government and as many as a dozen distinct authorities. All in all, McMahon and business partner Jim Youngren have been working on their Kensington Island Properties residential development for more than a decade, and it will be several more months at least before the first basement can be dug – and that’s if there are no more surprises.

And, well, there has been a surprise. A few months prior, yet another developer with a big chunk of land nearby stepped up with an ambitious project, this one of a very different stripe. In tiny Union Bay, the new proposal has blown up an even fiercer storm than did McMahon’s – and perhaps ironically, McMahon is among those with mixed feelings.


As a land developer, McMahon is following in a grand Vancouver Island and B.C. tradition. Indeed, as much as anything else, the leafy mien and unique economy of the provincial capital of Victoria can be traced to its very early role as a retirement haven marketed primarily to British naval officers. Neighbourhoods like Fairfield and Oak Bay are often described as “more English than England” because, way back in the 1880s and ’90s, that’s how they were plotted and hustled. We’ve been parcelling up the province and selling it to people from away since before it was a province. 


However, the company behind the newest proposal can claim a historical lineage that is every bit as long and every bit as valid. Atop a bench running behind Fanny Bay, Buckley Bay and the southern edge of Union Bay, Compliance Energy Corp. is planning to mine for coal, and who can forget that for almost a century, until 1966 when the last mine finally closed, coal was by far the dominant economic engine here in the Comox Valley (and, indeed, is still carried on near Campbell River, some 80 kilometres north). Union Bay itself – current population, about 1,200 – was once a city of almost 10,000 people, a bustling coal port from which the black bounty of the mines centred around nearby Cumberland was shipped throughout the world. 


In a way, both McMahon’s Kensington Island Properties and Vancouver-based Compliance are dancing to a familiar tune. And for their part, the citizens of Union Bay and neighbouring areas who are up in arms over the proposed developments are following right in step. Unfortunately, in B.C., this three-sided tango – basement diggers versus resource diggers versus dug-in residents – has too often become a dance marathon with few left standing. John Tapics, president and CEO of Compliance Energy, won’t even talk about a timeline for the proposed Raven Underground Project, but McMahon thinks he has a good sense of what it might entail. “We went through 10 years of uncertainty with our development,” he says. “I suspect that the coal mine is going into a process a whole lot longer than that.” 

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Arrested development on Vancouver Island

Given that B.C. was until recently famous among miners for its record of failing to open a mine for 10 years, perhaps it’s no surprise that launching a coal mine in the midst of a retirement mecca might be difficult. But how on earth can the approvals phase of a mere residential development stretch out for more than a decade? 


Well, to begin, Kensington Island Properties isn’t exactly your basic suburban subdivision, nor even a stand-alone resort exerting limited impact on nearby communities. Rather, its 340 hectares wrap almost entirely around the existing community of Union Bay, and will someday encompass, not 1,200 residential units (like other large Vancouver Island golf course developments such as Qualicum Beach’s Fairwinds), not 2,500 doors (which would add sufficient additional homes to return Union Bay to its long-ago population of 10,000), but 3,354 residences, making it almost precisely the size of Bear Mountain, the massive development in metro Victoria. 


Moreover, Kensington Island Properties is in many ways more ambitious. Bear Mountain’s primary signatures are its mountainside setting and Whistleresque esthetic. 
Union Bay could be regarded as Bear Mountain 2.0 – an updated version for a more enlightened time. The development will strive for LEED status, with grey-water recycling, geothermal heating and sustainability-oriented design guidelines that encourage straightforward, vernacular architecture finished with local materials such as cedar siding and shingles.


As an inspiration, McMahon cites the new-urbanism-influenced principles of developments like Washington State’s Seabrook. And the fresh thinking extends to the requisite golf course. Whereas Bear Mountain employed Nicklaus Design for its two courses, for their Links at Union Bay, McMahon and Youngren took a chance on Gil Hanse, who was relatively unknown at the time but has gone on to be named Golf magazine’s 2010 Designer of the Year while helping to lead the minimalist movement (so named because of its adherents’ desire to move as little dirt as possible) that is best illustrated by Oregon’s Bandon Dunes. In fact, Hanse was recently tapped to design two new courses at the resort that has almost single-handedly changed the direction of golf course design. With its design pedigree and seaside location, the new Union Bay course will be one of the few genuine links on the continent and an easy contender as one of the province’s best when it finally opens. 


That epochal event is now scheduled for 2013, 17 years after McMahon and Youngren picked up the primary parcel of land, a property that had been logged in the late 1970s. Entering into the process, the two men were certainly familiar with the development industry, if less so with the area. In the 1995 provincial election won by Glen Clark’s NDP, McMahon was defeated as a Liberal candidate in a riding in the east Kootenays, where he had been a vice-
president of Fairmont Hot Springs resort, as well as a builder and developer. Youngren is an American who makes his home in the San Juan Islands, but his development experience extends to several other B.C. properties, including Fernie’s Island Lake Lodge, the legendary backcountry resort where his partners included Scot Schmidt, sometimes referred to as the first extreme skier, and the late Craig Kelly, the professional snowboarder often given credit for inventing freeriding. Yet it’s an incident from Youngren’s pre-development career that earns him a footnote in the history books. In 1971, while working in deeply depressed Seattle as a real estate agent, he and a colleague embarked on a strange reverse-psychology marketing gambit, erecting a billboard with the words, “Will the last person leaving Seattle turn out the lights,” a phrase that immediately entered the popular lexicon, where it remains to this day. 


In recent years Youngren has largely faded from the scene at Union Bay. “Jim was 58 when we started this,” McMahon says. “Now he’s 71.” Meanwhile, McMahon is now 62, and supportive local residents who once looked forward to the new marina and golf course have begun to badger him about wedging in a seniors centre (which will be done, he says). Still, while the time lag has been extraordinary, it’s undeniable that the development faced some significant hurdles right from the beginning.


A chunk of Kensington Island Properties sits on top of Union Bay’s old coal port, which has required more environmental remediation than expected. And securing an adequate water supply – something Union Bay has never enjoyed – proved to be an expensive and contentious issue. Water, in fact, precipitated the first trip to B.C. Supreme Court, after the Comox Strathcona Regional District approved a plan to link Kensington Island Properties and Union Bay with Cumberland on a project that would have both communities drawing their water from a lake near the latter. The district’s abrupt decision was a surprise to the developers, says McMahon, since their plan all along had been to use Langley Lake, which was considerably closer and less expensive to tap. Meanwhile, a residents’ group and environmental advocates were leery of the Langley Lake solution and felt that the process, such as it was, had shut them out of the discussion. In the end, after a court challenge, Langley Lake became the water supply, but the imbroglio cost Kensington Island Properties millions of dollars in additional studies and legal costs, not to mention a delay of some two years.


In 2009, after the water issue had finally been cleared up, the development advanced to third reading at what was by then known as the Comox Valley Regional District, reaching that stage for an astonishing fourth time. “It’s not over till it’s over,” the Comox Valley Echo quoted McMahon as saying at the time.


And, sure enough, it wasn’t over. Achievement of final planning approval gave McMahon the confidence to begin clearing and shaping the golf course, but by then the administrative process had ticked over to the provincial ministry of highways, which required extensive additional property surveys; and because a small chunk of the golf course was purchased as a separate parcel, it proved to be subject to a different regulatory framework that necessitated more extensive environmental testing and remediation. There were other glitches, too, ranging from small to smaller, but resulting in delays and expenditures, nonetheless.


McMahon now believes that the few remaining hurdles will be cleared this fall and winter, allowing construction to begin no later than next spring. In the meantime, those fairways have grown back so vigorously that they will require a fresh round of bulldozing and subsequent debris sorting – rocks to one side, shredded organic matter to the other – meaning yet more delays and expenditures on that front. 

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And then there was the matter of the Union Bay Improvement District. As an unincorporated community, Union Bay leaves virtually all of its planning control in the hands of the regional district, so in theory the local body that provides services such as sewer and water and fire control should have had only a minimal impact on the development. And indeed, says McMahon, successive boards have been largely onside. (Among other benefits, the community is getting a $1.7-million water-treatment plant; the total value of infrastructure associated with the development is $78 million, says McMahon.) Nevertheless, complications – and court cases – have ensued. 


From the start, the community was split on the Kensington Island Properties development – often dramatically so. Among the most passionate of those opposed was a resident named Mary Reynolds, who wrote of the development and the local politicians who supported it on her blog, All Things Union Bay. Early this year, eight people who felt they’d been defamed (including a former board member who is now married to McMahon) initiated a lawsuit, signed onto by the Union Bay Improvement District board, which also paid the legal fees. After an election in May, a new board withdrew the district from the suit, but to that point, it owed an estimated $130,000 pursuing the action, out of a total annual budget of less than $800,000. (The suit remains active, pending a decision on whether to continue it from the eight individuals.) In the wake of it all, the local squabble has caught the attention of media outlets including the Vancouver Sun, with more than one commentator aghast at the District’s apparent attempt to silence one of its residents. In fact, Reynolds did take down her blog, as part of her agreement with the District’s new board, although she continues to contribute to a website originating out of Cumberland. Meanwhile, the Internet remains awash with the unsigned blogs of other Union Bay residents, in some cases writing about Mary Reynolds in language far more inflamed than any she used. 


And now there’s the coal mine. When Brian McMahon speaks about Compliance’s Raven Project, he’s careful to take a middle road. After all, a mine would employ 300 or more potential homebuyers, even if it’s not precisely “clean and green,” as he believes of his golf course, which will cap Union Bay’s old coal tailings. Carol Molstad, the new Union Bay Improvement District chair who helped broker the deal that got the District out of its quarrel with Mary Reynolds, is similarly inclined to look at the issue from both sides. She acknowledges that, based on her experience canvassing some 500 of the community’s 600-plus households, opinion is split on the development. In the central part of Union Bay, where many of the houses were built by the collieries and some of the residents once worked in the industry, there’s a lot more support than in southern extremes, which are close to the proposed site.


Molstad says the District hasn’t taken a stand, though she thinks it would be inclined to support Fanny Bay’s local government, which has been pushing for an Environmental Impact Assessment review panel rather than the comprehensive review that is currently underway. In general, the two approaches have similar scope, but the panel approach allows for more public involvement and generally takes longer. “Personally, I don’t see how the government can say this isn’t necessary,” says Molstad.


Molstad works as an environmental consultant in the Alberta oil sands, so her opinion isn’t without basis. Then again, pretty much everyone has an opinion around here. During a 40-day public comment period that ended in June, more than 2,700 letters were submitted to federal and provincial environmental assessment offices. Compliance Energy’s John Tapics points out that the project also has supporters, including many in the local business community and residents concerned about employment opportunities in the area. Still, the list of those opposing the project is long, ranging from the Baynes Sound shellfish industry to First Nations groups to environmental organizations. Several public meetings have attracted noisy overflow crowds, largely made up of people opposed to the mine proposal.


If McMahon is the patient principal who has learned from experience how best to deal with high school shenanigans, Tapics, a mining engineer by trade, seems to play the part of the thoroughly prepared and ever-so-cautious bureaucrat – after all, political players and public opinions come and go, but the process endures. And endures – he says the drive to achieve regulatory permission has accounted for perhaps 95 per cent of the company’s expenditures to date. 


The Raven Underground Project has been quietly percolating since a preliminary drilling program produced promising results in 2006. According to a feasibility study released in May this year, the proposed mine, which lies only a kilometre or so east of the last Comox Valley mine to close, has an expected life of 15.5 years, with projected production of about 850,000 tonnes of coal a year. 


Tapics rejects the idea that avoiding a full panel environmental review is any sort of win for Compliance. “The same level of study is required,” he says. “That’s a misunderstanding on the part of the public.” And he methodically ticks through the various objections that have been raised, suggesting that some are without basis and others will be eliminated, reduced or mitigated. For example, there’s a storage facility proposed for Port Alberni that will be enclosed in order to reduce coal dust, even though most similar dumps are left open, including one in North Vancouver. It’s true that the use of trucks to move the coal to Port Alberni is less than ideal, but, he says, the Island’s rail line is not currently up to the task. As an underground mine, the project will result in the disturbance of about 200 hectares, which will all be remediated at the end of the mine’s life, while measures will be taken to ensure that toxins don’t penetrate into the groundwater. And as for the potential effect on marine life in Baynes Sound, well, in a strange way, history is on the side of Compliance, Tapics thinks. “They have a world-class shellfish industry,” he says. “And it’s in an area where there was a coal industry for a long time.” 


Of course, that long-ago coal industry was the one that Brian McMahon has spent more time and money attempting to remediate than he ever thought possible. At the same time, it was an industry with only the barest of environmental controls and, by the same token, environmental critics. Not so today. Around Baynes Sound, most of the signs nailed to trees say “No Coal Mine,” and the battle to stop it is far from over. There will be four more stages of environmental review during which the public can comment on the Raven Project, and thousands more letters will no doubt be written. 


Still, the odds are good that environmental approval will be granted, the mine will be built, and John Tapics will some‑
day get to see all those signs peeled off. But how long will it take? That’s another question altogether.