will pay an annual sum of $50,000 exclusive of Rates and Property Tax. The latter are expected to yield about $23,000 at the present levels of taxation, and the total annual payment will therefore be of the order of $73,000. The terms of the contract will, otherwise, be those of the original tender except that the Company will have the opportunity of increasing the charges authorised by the Conditions of Tender provided the Governor in Council considers an increase justifiable.
6.
The annual payment of $50,000 may be regarded as a payment of Annual Crown rent plus instalments of premium over the 25-year term of the lease. The normal Crown rent for 81,000 sq. ft. in this locality would be about $1,860 per year at the rate of $1,000 per acre. The balance of the annual payment, amounting to $48,140, therefore represents an annual contribution by way of a premium. If the land were put up to public auction without the restrictions attaching to the present scheme, the upset price would be $5.00 per sq. ft. for à 75-year lease, or about $3.00 per sq. ft. for a 25-year lease. The total premium received would therefore be of the order of $243,000, paid in one lump sum as against which Government will be in receipt of $48,140 annually.
7.
The grant of this 25-year lease involves the following unusual features:-
8.
(a) It is by private treaty after receipt of
tenders, instead of by public auction. The necessity for this arises from the nature of the facilities which it is desired to provide;
(b) The lowest tender has been accepted, for
the reasons explained above;
(c)
It has been necessary subsequently to depart materially from the terms of the published Tender Notice and Conditions of Tender.
Nevertheless, I am satisfied that the terms now proposed will provide the best possible facilities for the public and I accordingly endorse the recommendation of Executive Council.
9.
An early reply would be appreciated as the Company is anxious to start building operations as soon as the present bathing season ends, so as to be ready for the summer of 1952.