O’Chiese Nation Information Document

 

O’CHIESE NATION

LAND DESIGNATION

 

BACKGROUND

 

The Chief and Council of the O’Chiese Nation (the “Nation”) propose to designate, by way of surrender that is not absolute, a portion of the O’Chiese Indian Reserve No. 203, comprising approximately 55.361 acres, as shown on the plans attached as Schedule ‘A’, in order to allow for the lands to be leased for purposes which might include recreational, commercial, residential, light industrial, institutional or educational purposes for a term of up to 49 years.

 

This Information Document provides an overview of a proposed designation of O’Chiese Nation reserve lands for leasing purposes. An explanation of the designation process is provided as well as information regarding the projects proposed as part of this project.

 

WHAT IS LAND DESIGNATION?

 

Land Designation is a process available to First Nations to assist in the management of reserve land. Section 38(2) of the Indian Act allows a Nation to designate, by way of surrender that is NOT ABSOLUTE, all or part of their reserve land so that it can be leased or a right or interest in that land granted to some other person or party.

 

Lands which are designated DO NOT lose reserve status they remain part of the reserve and are only leased to a lessee for certain purposes for certain limited periods of time.

 

Income earned by Nation people on designated land is non-taxable.

 

First Nation by-laws passed by the Chief and Council apply to designated land and any projects located on those lands.

 

WHY DESIGNATE LANDS?

 

As reserve land is developed for economic benefit, people (or companies) that operate commercial or industrial ventures (such as stores, banks, hotels or gas stations) are often required to make long term financial commitments to finance their businesses. To make the required long term financial commitments to finance their businesses. To make the required long term financial commitments they may seek to lease a parcel of reserve land on which to locate their business for a fixed period of time. To lease the reserve land they will be required to pay rent to the Nation or a Nation entity in return for the rent paid, a person (or company) referred to as a lessee receives the right to use the land for a specific purpose and period of time if they comply with the specific terms and conditions detailed in the lease.

 

A lease is the document which conveys to the lessee the legal right to use and occupy the land and contains the terms and conditions which specify all aspects of land use. It is drafted and negotiated by the Department of Indian Affairs and Northern Development (DIAND) at the request of the Nation.

 

However, before any reserve land can be leased, it must first be “designated.”

 

If land is not designated it cannot be leased.

 

Reserve land is not subject to seizure and cannot be used as security for loans or mortgages to financial institutions.

 

Leasehold interests in designated reserve lands can be mortgaged for loans or other obligations and a designation and lease maybe required in order to obtaining financing against the lease to pay for infrastructure and buildings.

 

THE PROCESS

A designation is conducted in accordance with the rules set out in Sections 37 to 41 of the Indian Act and the Indian Referendum Regulations. There are specific procedures and requirements which ensure that electors of the Nation have the opportunity to vote on the terms and conditions of the designation.

 

Before any vote on a designation, the Nation electors must be provided with information regarding the designation process and of any contemplated projects or developments.

 

A designation can only occur if the electors of the Nation approve through a formal vote as described below.

 

Electors have the right and opportunity to ask questions and get information about the proposed designation so that they can make an informed decision regarding the acceptance or rejection of the proposed designation.

 

To ensure there is community support for the designation, the referendum vote must be passed by a “simple majority” of the eligible voters. This means that a majority of those voting must vote in favor of the designation for it to pass. If the majority votes against the designation, it will fail.

 

Nation Electors who live off-reserve are also entitled to vote in designation referendums. Information packages regarding the designation are sent to each eligible off-reserve voter for whom an address is known. These packages contain a mail-in ballot which the off-reserve voter can fill out and return in the self-addressed return envelope provided.

 

DETAILS OF THE PROPOSED DESIGNATION


SUBJECT LANDS

 

The lands proposed for the designation are shown on Schedule ‘A’ and are more specifically described as:

 

SITE A:

LOTS1-1 AND 1-2 BEING A SUBDIVISION OF LOT 1, PLAN 64720 CLSR AND LOT 3 WITHIN THE N.W.1/4 SEC. 17, TP.43, R.9, W.5M AND INTERVENING ROAD ALLOWANCE AND FIELD NOTES WITHIN O’CHIESE INDIAN RESERVE NO. 203 AS SHOWN ON PLAN RSA 3006R; said lots together containing 11.471acres (4.642 hectares), more or less.

Excepting thereout all mines and minerals, whether precious or base, solid, liquid or gaseous

 

SITE B:

LOT 13, WITHIN THE N.W. 1/4 SEC. 17, TP.43, R.9, W.5M AND INTERVENING THEORETICAL ROAD ALLOWANCE WITHIN O’CHIESE INDIAN RESERVE NO. 203 as shown on the Provisional Plan and Field Notes of Survey dated January 9, 2015 (the “Provisional Plan”); said lot containing 43.89 acres (17.6 hectares) more or less.

 

Excepting thereout all mines and minerals, whether precious or base, solid, liquid or gaseous

 

It being acknowledged and agreed that upon the Provisional Plan being finalized and recorded in the Canada Lands Survey Records, this description shall be replaced and superseded by the description in the recorded survey plan.

 

The designation of the lands does not include any mines and minerals, whether precious or base, solid, liquid or gaseous.

 

The designated lands are subject to existing third party encumbrances. The lands proposed are subject:

  1.          1. Permit to Fortis Alberta Inc., Utility (Power) Distribution Permit Reg. 6056543;
  2.          2. Telus Communications Inc., Reg. 7363-240, 1958-37; X10454; 213390; 206120;
  3.          3. Rocky Gas Co-op Ltd., Reg. No. 217405;
  4.          4. West Rock Energy OS5669; Reg.331635;
  5.          5. Northrock Resources Ltd. RW 4246, Reg. 353152 and OS5988 Reg. 345202; and
  6.          6. Crown Alberta for SuperNet, Reg. No.318683.

 

TERM

 

The term of the designation is 49 years that commences on the date the designation is accepted by the Minister.

 

The designation term is different than the lease term and while the designation term is 49 years, the lease term for O’Chiese lands may be for a shorter term such as 5 years.

 

Some of the lands to be designated may never be leased, but designating them now gives the Nation the option in the future should it decide to do so.

 

PURPOSE

 

The designation allows for the lands to be leased for commercial, recreational, residential, light industrial, institutional or educational purposes, examples of which include, but are not limited to, the following:

  •            *Truck stop, gas station and convenience store;
  •            *Playgrounds, parks and recreational areas.
  •            *Recreational vehicle sites, campground;
  •            *Automotive service centers;
  •            *Restaurant and food sales facilities including kiosks, convenience stores;
  •            *Hotels and motels;
  •            *Signs;
  •            *Facilities related to bingos and casino games;
  •            *Single or multi-residential premises;
  •            *Athletic and recreational facilities;
  •            *Clubs and organizations;
  •            *Retail or wholesale establishments or shopping centers;
  •            *Office, business or commercial establishments;
  •            *Parking areas;
  •            *Light manufacturing, fabricating, processing and packaging goods or products;
  •            *Movement or storage of goods;
  •            *Utilities and essential public services;
  •            *Entertainment establishments, including movie theatres;
  •            *Public buildings;
  •            *Educational institutions for both children and adults;
  •            *Special adult and childcare facilities;
  •            *Financial institutions, medical or health facilities;

 

or such other specific commercial, recreational, residential, light industrial, institutional or educational purposes as set forth in each lease.

(the “Permitted Purposes”).

 

The designation will also allow for assignments, mortgages and subleases of the leasehold interests in accordance with the terms of the designation. It will also allow for the granting of easements, permits, right-of-way, licences of occupation, other interests and amendments of all such interests as may be necessary or ancillary to the primary purpose of any lease.

 

PROPOSED PROJECTS

The Nation is considering developing a number of possible projects on the designated lands, the details of which are as follows:

 

Grocery Store (utilizing local produce and products where possible)

Four Baseball Diamonds

Gas station and convenience store

Drug Store

Post office

Retail Shops

Bank

Laundromat

Multipurpose recreation centre,

Current school may be converted into a relocated Business Centre

Current school gym may be converted for community use

Current school may be converted for adult basic education,

 

The purpose of the designation is to give the Nation the opportunity create a business hub in the community that will provide youth, adults and elders with employment, entrepreneurship, education and recreational opportunities, with access for membership to local services and businesses.

 

The goal is to promote O’Chiese ownership, independence and keep opportunities in the community.

 

The first project will be the construction of a grocery store. Construction will commence in 2015. The existing baseball diamond will become the location for a new grocery store. The grocery store will feature local products where possible, providing local grower/supplier opportunities. It will also provide local access to grocery products saving time and money for members by buying local. Member money will be spent in the community supporting the community.

 

The next project is planned for 2016-2018 is the relocation of the gas station and convenience store.

 

In 2016-2017 the plan is to open a post office/drug store and create a building with individual shop spaces available for lease to local craft persons and business people. This will provide opportunities for members to create their own businesses and work within the community.

 

The current school building may be converted once the new school is opened possibly partly for a relocation of the Business Center, partly for use as a community centre and partly for an adult education centre.

 

AUTHORITY OF CHIEF AND COUNCIL

 

The Chief and Council may, by way of Band Council Resolution, request a Ministerial Order to revoke the designation, in respect of the whole of or any part of the designated lands, without another band vote being required, provided that there are no existing third party rights or interests issued under the designation on the affected designated lands. For example, if it is determined that not all of the 55,361 acres are required, then the designation may be revoked from the portion of the lands that is no longer required for development.

 

Chief and Council will have the authority to negotiate, review and approve the terms and conditions of all leases. The Chief and Council will evidence, by Band Council Resolution to Canada that the Nation, at a further general meeting of the nation’s members, has approved of the rental structure of a lease, the term of a lease, the area to be leased and the specific purpose that the lands will be leased for.

 

Any amendments of leases granted pursuant to the designation will require the approval of the Chief and Council by way of a Band Council Resolution, without the requirement of a further meeting of the Nation’s members. However, no such amendment shall extend the term of a lease beyond the term of the designation, and where an amendment to a lease reduces, or has the effect of reducing, the rent per acre payable under the lease, substantially changes the purpose for which the lands are leased, the Chief and Council will evidence by Band Council Resolution to Canada that the Nation, at a further meeting of the Nation’s members, has approved of such amendments.

 

ENVIRONMENTAL ASSESSMENATS

 

Any lease and any subsequent sublease entered into the designated lands will be subject to all necessary environmental reviews as required by DIAND’s policy and any relevant legislation. The designation appoints the Chief and Council to act as the representative of the Nation in relation to such environmental reviews.

 

GENERAL INFORMATION

 

The rent for all leases shall be fair market rent subject to periodic rent reviews as set out in each lease. However the Chief and Council may approve of Canada leasing the designated lands, or any portion of them, for nominal rent of $1.00 per year for up to the first five years of the term of a lease to a Nation Entity to promote the economic development of the lands. After this nominal rent period, rent reviews shall be conducted and the designated lands shall be leased for fair market rent.

 

In leases entered into pursuant to the designation, Canada will only be collecting the rent payable under the leases.

 

The Nation Entity may sublease the lands when they are developed, (i.e. as a grocery store) for an amount greater than the amount payable to Canada. Any amounts collected by a Nation Entity greater than the amount to be paid to Canada will belong to the Nation Entity and will benefit the Nation and indirectly benefit members of the Nation as beneficial owners of the Nation Entity.

 

Canada does not collect any rent revenues payable under any subleases.

 

A certified appraiser, Ken Waters of Waters Mackie Valuations Inc., has appraised the fair market annual rental of the lands proposed to be designated. The appraisal report, dated September 3, 2014, sets out the appraised fair market annual rental of the lands as approximately $793.65 per acre or $1960.78 per hectare. Copies of this appraisal are available at the O’Chiese First Nation Band Office.

 

In the event the lease from Canada shall only be for nominal rent during the initial 5 years of the lease, the fair market annual rent is the amount that the Nation would forgo as annual lease rent per acre for the designated lands (or any portion of the designated lands that has been leased).

 

No rent is payable to Canada on lands that are designated but not yet leased.

 

All payments made to Canada for any lease, permit, easement, license, or other interests issued under the designation will be credited to the funds of the First Nation as Indian moneys, except for any additional rent, reimbursements or similar payments payable to Canada as may be provided for in such instrument.

 

Full details of the designation are set out in the designation document attached to this Information Document as Schedule ‘B’.

 

 

NOMINAL RENT

 

All or some of the designated lands may be leased for nominal rent to a Nation Entity for up to five years. If nominal rent is payable under a lease, the Nation Entity will have a rent-free “start-up” period which may assist the Nation Entity in becoming a viable operation, and/or lessen the Nation Entity’s financial outflow while it is pursuing fair market rental sublease opportunities. In addition, although nominal rent may be payable by a Nation Entity under a lease, any profits of the Nation Entity, or increases in value of the Nation Entity’s assets, may indirectly benefit members of the Nation as beneficial owners of the Nation Entity.

 

However, as only nominal rent would be paid by the Nation Entity instead of fair market rent for up to five years, there is a risk that the Nation may not financially benefit as much from the designated lands during the nominal rent period as compared to a lease for fair market rent. As such, Canada requires certain acknowledgements from the Nation in respect of this risk, and nominal rent leases to Nation Entities generally. These acknowledgements are specifically set out in Schedule ‘B’.

 

INFORMATION MEETING

 

An information meeting for the Nation members will be held at the following locations:
 

LOCATION: O’Chiese Community Center, O’Chiese Reserve No. 203

DATE: February 25, 2015

TIME: 1:00pm to 4:00pm

 

As set out in the Notice of Referendum.

 

The purpose of the information meeting(s) is to provide the Nation members with information to assist in their decision making with respect to the proposed designation.

 

DATE OF REFERENDUM VOTE

 

A referendum vote to seek the assent of the electors of the Nation to the proposed designation will be held on March 5, 2015 at the O’Chiese Community Center from 9:00am to 8:00pm.

FURTHER INFORMATION:

 

For further information on the proposed designation contact:

 

Victor Humbolt, at the O’Chiese First Nation Band Administration office, P.O. Box 1570, Rocky Mountain House, Alberta, T4T 1B2. Phone: 403 989-2047 or 403 989-2297.

 

Joey-Leigh Mogus (Lands Management Officer), Aboriginal Affairs & Northern Affairs Canada, #630 Canada Place, 9700 Jasper Avenue, Edmonton, Alberta, T5J 4G2, Phone (780) 495-5290