Negotiations continue about Central Elgin land compensation for VW plant

Closed-door negotiations are dragging on between the mayors of St. Thomas and Central Elgin as they work with a provincial mediator to ensure Central Elgin receives fair compensation for the Ontario government’s decision to expropriate hundreds of acres of farmland as part of the deal for an electric-vehicle battery plant.

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“We’ve got to finish the compensation conversation, and one of the ways to compensate would be if we were sharing everything as an amalgamated community. . . . If we can’t do that, (we need to) come up with a final prize package for Central Elgin for the 800 to 1,000 acres that switched from Central Elgin to St. Thomas,” St. Thomas Mayor Joe Preston said in a late -January interview.

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“What we’ve done already, and will continue to do, is pay the level of taxes for the farmland that’s there, about $150,000 a year. We’re giving them that right now, so (Central Elgin is) staying whole (and) some of that goes to the (Elgin) County. They would like a bigger bonus.

“That’s the discussion that’s taking place and, because that’s being done in confidence, I can’t really say how big a bonus we’ve offered or how big a bonus they’re looking for, above and beyond what have been the normal taxes .”

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PowerCo announced, a Volkswagen subsidiary, announced plans on March 13, 2023, to build its first overseas “gigafactory,” an EV battery manufacturing facility, in the new 1,500-acre (607-hectare) industrial park in the city’s northeast corner by 2027 .

The provincial St. Thomas-Central Elgin Boundary Adjustment Act expanded the city’s boundary by annexing Central Elgin farmland, wetlands and woodlots worth hundreds of millions of dollars.

The closed-door negotiations, Preston acknowledged, are focused on seeking compensation for Central Elgin’s resulting loss of property tax revenues.

“There’s still some confidentiality as to what parts are on the table and what aren’t,” Preston said “There have been offers that are today-related (and) we could get it all done, or there are offers we need to look into the future, as to what the bonus might be.

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“Well, none of us know that, so how could we ever set it or negotiate it? We have to wait then.

“I feel pretty comfortable in my skin that St. Thomas has made a good move, but if the municipalities around us want to wait until after the next election, I’m not sure how well that will go with their people.

“There are other exchanges of land that have happened across Ontario, but none of them are extremely precedent setting because they’re different from each other in almost every case, and a lot of them are very well thought-out agreements between two municipalities. That’s what worked for them because they’re good neighbors and want it to happen.

“We’d like to come up with something where we’re good neighbors and we want it to happen.”

Sloan did not respond for a request for comment on the negotiations.

The Local Journalism Initiative is funded by the Government of Canada.

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