Saddled with more than $6 million in debt after backing a loan to bring a Cold War submarine to its shores, a London-area community is poised to pay off the outstanding amount 15 years early.
Advertisement 2
Article content
Bayham, a municipality with 7,000 residents on the eastern edge of Elgin County, is in line to settle the approximately $4 million remaining on its submarine debt in March 2025, when the 10-year term on its 25-year loan ends.
“It’s the best time, if we’re going to try and get out of it, to do it,” Mayor Ed Ketchabaw said.
“We’ve explored it in the past and to break the mortgage, the interest penalties would by far outweigh the benefit. That’s why in March 2025 we’re looking to withdraw this debt.”
The municipality has about $2.5 million in a dedicated fund, will pull another $1.1 million from its capital budget this year and is hoping to make up the remainder through the sale of four long-abandoned residential properties seized by the municipality, Ketchabaw said.
Advertisement 3
Article content
“We got those lots jacketed to the municipality in the summer. We’re in the process of having them declared surplus and we’ll sell them as residential lots,” Ketchabaw said about the four fully serviced parcels on the east side of a park in Vienna.
Some public meetings and a small rezoning must happen first before the properties can hit the market, he said.
The municipal government, in 2012, agreed to guarantee the debt from the Elgin Military Museum related to the HMCS Ojibwa project, an amount that included bringing the Oberon-class submarine to Port Burwell and converting it into a museum
When the loan went into default in 2015, Bayham was on the hook for more than $6 million.
Bayham has been paying down the debt ever since at a cost of about $330,600 a year. The municipality’s total annual budget is about $11 million.
Advertisement 4
Article content
Bayham has sold off several of its surplus municipal properties – including two small-town community centers, a former municipal office and a public works yard – to reduce its spending and support a fund to repay the HMCS Ojibwa loan.
A recent report by municipal staff identified three parks that could be sold, fully or partially, for residential development to help pay off the HMCS Ojibwa debt, but council decided not to take further action.
The Port Burwell ball diamond was the most attractive municipal property to offload, the report said, since it has brought in just $789 in rental fees for Bayham in the last three years, needs $200,000 in capital improvements and has space for at least 14 residential lots .
The other two properties eyed for potential sale were the Corinth community park and a segment of Richmond park, recreation spaces named for the Bayham communities in which they are located.
Advertisement 5
Article content
The possibility of selling off community parks was not well received by the public and is not being pursued at this time, Ketchabaw said. But he wants the report to serve as a notice to Bayham residents to make use of their local parks.
“I’m hoping it makes people understand that just because it exists, doesn’t mean it will always be there. If you don’t use these facilities, perhaps they will serve a better function as something else,” he said.
Retiring the submarine debt from the municipality’s books will mean it can take on other projects, including the refurbishment of a historic lighthouse or a seven-kilometer water line in Port Burwell.
“We have bigger things coming down the road. If we can clear up our debt capacity, then that gives us the opportunity to do infrastructure things that really matter for our community,” he said.
Recommended from Editorial
Article content