Edmonton city council seeks new tenant for bankrupt recycling facility

City council has approved a plan to look for new tenants to take over the building and equipment it leased to a now bankrupt paper recycling company in which taxpayersinvested millions.

Greys Recycling Industries declared bankruptcy earlier this year.

Between 2009-2014 the city invested $9.4 million dollars in land, equipment and the building, which is located at the Edmonton Waste Management Centre.

"We don't want to rush this," said Mayor Don Iveson. "Butif we can get something up and running in there and have it paying rent and have it paying taxes again then that's the best for the city's bottom line."

Iveson said a successful proposal would have to meet all of the city's evaluation criteria to ensure the company is on good footing, with good business practices in place.

"Then if we find someone who wants to do a paper business, or some other kind of business in there, and it's in the best interests of the city financially to lease the facility to them, then that would be a risk managed approach to who we would allow to be the tenant in there ultimately," said Iveson.

He said if no one is willing to pay a reasonable market rent, the city will repurpose the building.

City staff told council they believe the plan is the most practical option to pursue at this time.

Other options include either repurposing the facility for use by the city or the Edmonton Waste Management Centre, or selling the paper recycling equipment and leasing out the building to recycle materials accepted at the centre.

While some councillors such as Michael Walters expressed confidence in the plan prior to the vote, others raised concerns.

"I'm just fearful of going back to before," said Coun. Mike Nickel, who addedhe had "no faith" in the option. "How is this fundamentally different?"

City manager Linda Cochrane said the latest proposal would be less of a partnership with the city and more of a pure lease agreement.

When asked about possible interest by Coun. Bev Esslinger, city staff confirmed one potential bidder is a group that includes original investors "structured entirely different."

"I'm just really cautious about having this group reinvent themselves on our dime," said Esslinger.