Marina Lease Negotiations

Last updated: July 23, 2024

Background 

The District of Oak Bay owns the Marina lands located at Turkey Head and has a lease with the Province for the foreshore/aquatic area occupied by Oak Bay Marina. The District leases the land/buildings and subleases the foreshore/aquatic area to the Oak Bay Marine Group. The leases expire in December 2022.  

On September 14, 2020, Council directed staff to issue a Request for Proposals (RFP) document towards obtaining proposals for a new 30-year lease of the upland and foreshore/aquatic crown lands associated with the municipally owned marina facilities located at 1327 Beach Drive.An RFP procurement is a distinctly different process than policy changes, or planning engagements, or rezoning applications that change permitted land uses; these all legislatively require opportunity for public input. RFPs are not required to provide opportunity for public engagement. This RFP procurement process is about negotiating a lease within the framework of existing permitted uses under the District's Zoning Bylaw.

The RFP for lease of Oak Bay Marina Lands and Marina was issued on September 18, 2020.  Proposals were due by November 30, 2020.  For public entities, best practices require that a Request for Proposal process be undertaken in a way that ensures fairness and transparency. In this case, the requirements for fairness and transparency have been met through the involvement of a third-party external fairness advisor, and numerous opportunities for public input.

The District recognizes the historical connections that the Lekwungen people, the Songhees and Esquimalt Nations, have to the land on which the District is located.

The Province has a duty to consult with First Nations in relation to proposed dispositions of Crown land that may affect the rights of the First Nation. What the District did, as a separate level of government with different and distinct responsibilities from the Province, was to stipulate respect for First Nations culture, language, traditions and world view as a lease objective and guiding principle and to encourage proponents to engage with First Nations in formulating their response to the Request for Proposal. The negotiation process allows for ongoing work to achieve these and other reconciliation goals. Ongoing respectful dialogue with First Nations remains a top priority for Council generally and within this RFP process.

Following receipt of proposals, staff undertook a technical evaluation of each submission. Two proposals achieved technical scores sufficient (minimum 70%) to have community amenity proposals reviewed. Council directed that proposals clearing this threshold be released for public review and feedback. The two community amenity proposals forwarded for review were named Proposal 1 and Proposal A.  Proponents were advised that community amenity proposals would be read by the public and Council and that Council would evaluate and score the community amenity section separately from all other information provided. To support as unbiased review as possible, proponents were directed to refrain from using company-specific information or references. The documents given to proponents indicated that staff could remove information that might reveal the identity of the proponent.  In this regard, staff redacted some references.  Redacted references are marked with black strike-through lines. 

Public input was sought through an online questionnaire that ran from February 9, 2021 to March 2, 2021.  Results are available here.  Public input was also requested by way of correspondence with Council and at a Committee of the Whole meeting held March 1, 2021.  Public input opportunities were extensively advertised/promoted.  Among hundreds of good ideas heard through the public engagement process, some consistent themes emerged, including the importance of ocean environmental protection, seeking opportunities for First Nations reconciliation, access to beaches, supporting small craft watersports, all-ages walkability, opportunities for gatherings, and of course ensuring the District sees revenue proportional to the high value of the property. The District thanks the community for taking the time to share their experiences, expertise, and ideas to help guide and inform this process. The feedback received will be top of mind as the District enters negotiations.  

Following scoring of technical, community amenity and financial proposals, Council, late in May 2021, selected Proponent 1 as the preferred party with whom to commence negotiations. Community input on amenities was considered in scoring proposals. 

Over the late spring/early summer, the parties worked with professional advisors to prepare for negotiations. The first negotiation meeting took place July 15, 2021. Among the items discussed at the meeting was identification of Proponent 1 by name. Release of this information required agreement of the Proponent and this was considered best dealt with in the context of the first negotiation meeting. With Proponent agreement, the District could then identify Proponent 1 as the Oak Bay Marine Group. Another item discussed at the meeting was public release of Oak Bay Marine Group’s technical proposal. With Proponent agreement, the District was able to release this information (redacted to remove sensitive commercial information). 

On September 29 and October 6, the District gave formal notice including information on rents to be paid in accordance with Community Charter requirements. On October 14, Oak Bay Marine Group and the District of Oak Bay signed a 5-year lease. A copy of the lease can be found here. Signing of the lease concluded the RFP process.

When the five-year lease was signed, Oak Bay Marine Group and the District of Oak Bay agreed to a month- to-month lease on the Restaurant and Coffee Shop facilities at the marina. The parking lot area and public paths on the site were not leased.

On February 27, 2023 Oak Bay Marine Group (OBMG), for business reasons, gave thirty (30) days’ written notice to end the lease for the Restaurant on March 31, 2023. Oak Bay Marine Group will continue to lease the Coffee Shop on a month-to-month basis.  The District of Oak Bay and OBMG have agreed that it is in their mutual interest for OBMG to be allowed to leave the restaurant equipment within the Restaurant following March 31, 2023 on terms and conditions set out in a Restaurant Equipment Agreement. 

On July 6, 2023 the Province of BC approved a water lot lease to accommodate the marina docks. 

In response to earlier Council direction, on January 22, 2024 Council received a dock condition assessment completed by Herold Engineering. Herold Engineering concluded that the dock is in fair to good condition overall. No major safety concerns were apparent during the review. Areas of localized damage and deterioration were identified and maintenance activities recommended to preserve and extend dock service life. The docks are the private property of Oak Bay Marine Group (OBMG).  OBMG has indicated it is committed to a prudent dock maintenance program, while balancing the limitations under the current short-term lease arrangements. The marina employs the services of a professional engineer with marine experience to provide guidance as needed and will at all times ensure safety to their Crew, customers and the general public. 

It will be up to the Council elected for the 2022-26 term to determine next steps on the vacated restaurant space and to provide directions for the site beyond 2027.  Council’s directions will determine the timing and scope of future steps.  

On January 31, 2024 the District shared the following motion:

THAT staff secure a project lead to guide the future use of the Turkey Head (Spewhung) site that reflects the following objectives of the District:

  • First Nations partnership,
  • Sustainable Financial return,
  • Site activation and public use, and
  • Environmental stewardship

As the District prepares for next steps, it will be guided by community values including dialogue with the original Peoples of the lək̓ʷəŋən Territory towards advancing strong relationships, prosperity, and stewardship of lands and waters.  The District will consult with the Oak Bay community and be guided by Provincial legislative requirements and broader responsibilities to Oak Bay taxpayers. 

On April 8, 2024 Council directed that staff advance Council Priority Project #52, "Undertake Options Analysis for Marina", by securing a consultant to produce technical and financial analyses of potential future land use options for the Turkey Head (Spewhung Point) site as outlined in the related Council Project Sign-Off.

Early in 2024, it was thought that Project #52 would be completed as part of work to be undertaken by a Project Lead to be secured through contractual arrangements as directed by Council in January 2024. The District did not receive any proposals in response to two separate processes:  a Request for Quotes and a Request for Proposals.

Instead of securing the services of a Project Lead, the District will therefore proceed with an Options Analysis. The Options Analysis will provide technical and financial analyses of potential future land use options for the Turkey Head (Spewhung Point) site currently occupied by the Oak Bay Marina and associated parking lot. The completed analyses will be used to prepare for and support related First Nations and community engagement as well as any future negotiations with potential partners.

An external options analysis for the Turkey Head / Spewhung site was completed in July 2024, which included a technical analysis of potential land use options. The next phase of work is underway to provide a financial analysis of some of those options. The reports’ data will inform site potential and will be critical to inform the future work with the community, stakeholders and potential partners. This consultation is intended to lead to a vision and plan for both the built environment and public sphere that meets the four criteria established by Council: First Nations partnership, sustainable financial return, site activation and public use, and environmental stewardship. 

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