NANTICOKE—A recent decision at the Ontario Court of Appeal may be the end of the line for Stelco Inc.’s efforts to stop the conveyance of a portion of land near its Nanticoke facility to DGAP Investments, which could then complete a sale of the lands to Empire Homes, the developer behind a proposed large-scale development in the area.
The Press spoke with local attorney Ed McCarthy of McCarthy and Fowler for a breakdown on the decision.
McCarthy said the issue dates to the sale of the lands to LandCo, which he described as an “outfit owned by the Stelco pension plan.”
“I think it all goes back to Stelco’s financial trouble, back when US Steel took it over.… US Steel of course didn’t care about all these extra lands. When Stelco found out that these lands would be sold to Empire, they got upset and tried to delay the thing,” said McCarthy.
The land in question is approximately 1,200 acres on the west side of the steel plant, according to McCarthy’s interpretation of legal documents related to the appeal decision.
“When you search the title of these properties, this land west of the steel plant is still in Stelco’s name, but the 600-odd acres to the north of the Stelco operation … they’re in the name of this land company,” he said.
The parcel is one of 14 parcels DGAP agreed to purchase from LandCo. McCarthy noted that the original sale required a severance agreement from Haldimand County to proceed. That agreement had conditions related to easements between the severed parcel and Stelco’s retained lands.
Stelco, which was subsequently ordered to transfer the parcel to LandCo as part of a 2018 reconveyance agreement, has to-date refused, attempting to appeal the reconveyance agreement on the basis of non-consensus over how to implement easements between the two pieces of land.
McCarthy couldn’t say for sure what the easements in question would be used for, but posited that it’s likely they would relate to rights-of-way through the sold land for a range of operational issues.
“They’ve been balking because in the original agreement … there was a provision about these easements,” said McCarthy. “They haven’t come to terms on how these easement agreements are to be worded, and that’s what Stelco is hanging its hat on.”
“It looks to me like they’ve tried everything under the sun,” added McCarthy. “The court of appeal has said no, this appeal has no merit.… I think what’s going to happen is the court is going to settle this easement question under the powers they have under the company’s creditor’s arrangement act, to impose terms.”
McCarthy continued, “I think what it means is that Stelco will be forced to close the deal and transfer these lands to the land company, who can then sell them to DGAP.”
Last July, Stelco VP Trevor Harris appeared at a Haldimand Council meeting, where he said Empire’s proposed development of a residential community in Nanticoke “puts us at risk…. We can provide you no assurance that we will be here in 20 years.”
The Press reached out to Harris following the appeal decision but received no reply ahead of publication.
“Their concern is that all these lands will be used for residential development, which will be incompatible with their steel operation,” said McCarthy. “That might be posturing, but that’s the concern.”
He noted that once the transfer has taken place and LandCo has sold the lands to DGAP, the generated funds will go to Stelco pensioners; however, no further information was available as to how much money that sale will generate.
The decision removes an obstacle for the Nanticoke development, which remains up in the air on whether or not it can proceed.
Haldimand County, which initially requested a Minister’s Zoning Order (MZO) in early 2022 to explore the proposed development, called the court decision a “private matter” that does not involve the County in any way. The County statement responding to a request for comment noted there “has not been any formal meetings with Stelco and County representatives” since the CIC meeting last July.
There has been no word on the progress of the MZO request to date.
McCarthy, however, noted several obstacles remain in the pursuit of the proposed development moving forward.
“If it’s really Empire that wants those lands, they’ll need to get them rezoned,” he said. “It’s all zoned for industrial. On top of that, there’s the provincial policy statement that says the lands are to be used for industrial purposes.… The designation of these lands for employment is another provincial policy, and that has to be changed if they want to develop them for residential purposes.”
As for the land in question, in contention now for the better part of a decade, McCarthy said, “This is the end of it. It looks to me like now they’re going to have to go ahead and complete these deals as originally agreed on.”
