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‘Cough it up or it will be expropriated,’ N.L. town warns business after mistaken water system sale

Wabana Mayor Gary Gosine says the Advanced Drinking Water System housed in the burgundy shed behind him belongs to the town, despite a mistake made during the sale of the old firehall (white building) to Beachstone Enterprises Inc.
Wabana Mayor Gary Gosine says the Advanced Drinking Water System housed in the burgundy shed behind him belongs to the town, despite a mistake made during the sale of the old firehall (white building) to Beachstone Enterprises Inc.

Bell Island residents showing up for clean drinking water at a water dispensary near the old firehall building in Wabana on Tuesday hoped the fuss over who owns the water facility is soon resolved — and that it’s a resolution that doesn’t involve any increase in taxes.

Bell Island residents Albert Murphy (front) and Ross Blundell fill water bottles for drinking in Wabana on Tuesday. Both say the town’s tap water is no good for drinking.

Since Beachstone Enterprises Inc. purchased the old firehall from the town last year, the company has since discovered the deed to the property takes in the town’s nearly $400,000 Advanced Drinking Water System housed in a small building next to the old firehall.

And Beachstone Enterprises owner Jim Bennett wants the town to now pay rent of $3,000 a month for access to the facility. The lease agreement he proposed would also include a $2,500 security deposit and a $50 per-day late fee should the rent not be paid on time.

The town council of Wabana is pushing back, threatening legal action and possible expropriation of the land.

Related story:

N.L. town mistakenly sold water system to company

Wabana Mayor Gary Gosine on Tuesday was confident the town will regain ownership of the water dispensary.

“It’s all in the hands of the lawyer. Something went wrong. At the end of the day either the lawyers are going to get it back through (a deed of rectification) or it’s going to be an expropriation of property,” he said. “If he wants to go playing games, we can play games. He might not even have a building to operate from in the future because we can expropriate the land and the building, if need be, but that drinking station is on our land. We have a letter sent to him … to either cough if up or it will be expropriated.”

Bell Island resident Ross Blundell said the town’s tap water is not good for drinking so his family depends on the dispensary. He brought three large bottles to fill up on Tuesday afternoon.

“I read the (Telegram’s) story on Facebook this morning,” Blundell said. “I don’t think this situation is very good. From what I can gather, there’s just been a mistake made and that’s all.

“To me it just makes sense that what (Bennett) was buying was the old firehall. I think it was just an oversight by somebody and not done properly, and I hope it will be resolved.”

Albert Murphy, who has been living on Bell Island for 35 years, said that after he heard about the story on the radio Tuesday morning, he was worried it would result in increased taxes down the road.

“They are already making enough, $1,100 or $1,200 a year in taxes,” he said. “The old tap water here is just like rotten eggs, not fit to drink. I have to come here to get water all the time.”

The water system inside the roughly 12 foot-by-20 foot building is a potable water dispensing unit — a small-scale water treatment system that pumps and treats water from the municipal supply and stores the water for residents to collect at their convenience. The system was installed by the town a couple of years ago cost-shared 90/10 by the provincial government and the town.

Bennett said Monday the sale was a binding legal agreement between the two parties. He said he has no intention of turning the water off to residents, but needs money to maintain the facility and that’s why he sent a lease agreement document to the town.

Town minutes from 2016 show the town council issued a request for proposals regarding the original firehall, rather than have the building torn down because of its rundown condition. There was some concern on council about whether it should have gone through a public tendering process.

A committee that was overseeing the matter — members included Gosine, MHA David Brazil and town consultant Ed Kent — noted that if someone purchased the property there would be no expense to the town, as to heat and light or insurance costs, and the new business owners would make the upgrades required by Service NL. The town would also receive future revenue in the form of business tax, and the economic benefit of possible job creation.

Beachstone Enterprises was the only proposal received and the town voted to proceed with the sale.

All seemed good until Beachstone read the deed and realized it had more property than originally thought.

It is still unclear on how the sale went through without anyone noticing that the water system building was included in the sale.

One Bell Island resident, who didn’t want his name used, said the whole sale was rushed through council and that’s why the mistake was made. He said there was little opportunity for other companies to submit proposals for the old firehall.

The reason there’s controversy now, he said, is because the parties involved had a falling out over unrelated issues.



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