2018 Annual Financial Report

NOTESTOTHE CONSOLIDATED CITY OF SURREY FINANCIAL STATEMENTS

For the year ended December 31, 2018 [tabular amounts in thousands of dollars]

19. SURREY CITY DEVELOPMENT CORPORATION

On April 24, 2007 the City of Surrey incorporated the Surrey City Development Corporation (“SCDC”) with the purpose of advancing the commercial, industrial, institutional and residential development of the City. The City is the sole shareholder of the Development Corporation and has provided financing to sustain operations. As a controlled other government organization, SCDC’s financial information is fully consolidated within the City’s financial statements. As at December 31, 2018, SCDC has entered into Government Partnerships and Government Business Partnerships as follows: a) The Grove Limited Partnership The Grove Limited Partnership (“Grove”) is a partnership for the development of 141 three-level townhomes located in the East Clayton area of Surrey. SCDC mutually contributed a beneficial interest in lands valued at $2,844,000 and cash consideration of $1,341,597, for a 50% interest in the Grove. The proportionate amounts included in the consolidated financial statements at December 31, 2018 are as follows:

2017

2018

Assets

$

113

$

110

Liabilities

(3)

(3)

Accumulated surplus

$

110

$

107

Revenues and expenditures for the year ended were $1 thousand (2017 – $13 thousand) and $3 thousand (2017 - $0 thousand), respectively. b) Surrey Centre Limited Partnerships Prior to October 9, 2018, Surrey Centre Limited Partnerships (“SCLPs”) were various partnerships for the development of mixed-use real estate developments in the City. The SCLPs financial results were proportionately consolidated with those of the Corporation based upon the Corporation’s partnership interest of 24.4% (2017 – 24.4%). The proportionate amounts included in the financial statements at December 31, 2018 are as follows:

2017 1,226

Assets

$

Liabilities

(30,410)

Tangible capital assets

43,085

Prepaid

14

Accumulated surplus

$

13,915

Revenues and expenditures for the year ended 2017 were $165 thousand and $30 thousand, respectively. On October 9, 2018, SCDC’s wholly owned SCIC disposed of its ownership interest in the Surrey Centre Limited Partnerships and its shares of the Surrey Centre Tower Holdings, the bare trust entities created to facilitate the Surrey Centre Limited Partnerships, for proceeds of $22 million which resulted in a net gain on the sale of SCIC’s partnership interests totaling $7.3 million, including previously deferred gains of $3.8 million. c) Beedie Limited Partnership Beedie Limited Partnership (“Beedie LP”) is a partnership in the business of real estate investment and development of a build- to-suit industrial building in the City that has been occupied by a tenant under a long-term lease. Beedie LP meets the criteria of a government business partnership and its results are accounted for under the modified equity method. The liability of SCDC is limited to the cash and land which it contributed to Beedie LP.

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