P.J. Wade, Realty Times, June 14, 2005
Residential real estate is hot stuff these days, but it represents only a fraction of available Canadian acreage. Home and cottage owners sometimes forget that there's a lot more real estate out there to consider if they are looking for good investments. Here's an example that may inspire some buyers to think as big as this country is.
One Canadian has earned a reputation for buying towns. Rudy Nielsen, founder and president of Niho Land & Cattle Company of New Westminster, BC, turned his love and understanding of British Columbia's interior into a 33-year (and counting) appraisal and real estate career. He buys BC ghost towns and resells them as RV parks.
"I buy towns myself, but most are without buildings -- they go without machinery," said Neilsen, explaining the attraction is that these old towns are already divided into individual properties. "In the old days, lots were small, so I sell to RV people."
At the turn of the last century, mining was a boom business and towns grew up around mines. Throughout BC, and in many of Canada's other provinces and territories, mining companies continue to own abandoned towns long after their mines close. Some ghost towns still have standing hotels and buildings.
Neilsen has bought many towns -- but there's always the one that got away.
About 10 years ago, Nielsen tried to buy the BC town of Kitsault, abandoned when the local molybdenum mine closed in 1982. He planned to convert Kitsault into a town-sized year-round sports resort, but the owners were not ready to sell. Then, in 2004, the current owner, a US corporation, contacted him.
"They called me last year because they wanted to sell [Kitsault], but they did not want me to buy it, since I would have given them a low figure," said Nielsen. He determined the value for them, arranged for the property to be listed with an affiliate company and created the marketing plan to promote the property across Canada.
Kitsault, with a town site of over 322 acres on eight titles, is 500 air miles northwest of Vancouver and a 3.5-hour drive north of Terrace. The once-thriving waterfront community sits on the shores of Alice Arm, a fjord with capacity for deep-sea shipping and potential for linkages to the nearby coastal city of Prince Rupert.
This was a town just waiting for people: approximately 90 houses and duplexes, 7 apartment buildings, a 22,000 square foot shopping centre, two recreation centres, a fully-equipped hospital, a large works yard, a sewage plant, a local dock and even the Maple Leaf pub connected by paved roads, all utilities including telephone and cable installed, a sewage system in place and landscaping complete.
How do you arrive at a list price for a town?
"You work backwards to create a vision," explained Neilson who set the list price at C$7 million. "First you look at what you could do with the town. There's about 20 uses from resort to alcohol rehabilitation facility to a prison."
Nielsen's research uncovered the sale of one US town that was then leased to the government as a special forces training site. He evaluated this use for Kitsault and also explored ideas including a medical research facility, a cruise ship destination, a permanent movie set and a university for mining executives who would go to classes and spend time down the mines. There was also talk of having a movie company pay to blow up the town. This cleared property could then be resold as housing lots.
When the town sold for an undisclosed sum in January, after just 4 months on the market, Nielsen issued these comments: "The lights are going back on in Kitsault. The new owners, Kitsault Resort Ltd. B.C., are planning to revitalize the spectacular oceanfront town as a premier northern destination. The outdoor recreation opportunities in this region are limitless and include spectacular sport fishing and the potential for world-class heli-skiing."
The new owners plan to refurbish the town after undertaking consultations with the Crown, local governments and First Nations. The goal of revitalizing the community may involve the sale of single family homes and condominiums, a time share vacation resort and even a movie studio.