Council drops lot prices in bid to boost residential construction

City-owned lots in Prince Albert’s Crescent Acres neighbourhood will be a lot cheaper after city council voted to reduce sale prices by adjusting the franchise fee.

As a result, the 38 lots currently for sale in Crescent Acres will be $12,665 cheaper, but some city councillors worry the decision will set a bad precedent.

Ward 5 Coun. Dennis Ogrodnick, who represents the area, was among seven council members to support the price reduction. He said it would spur development in an industry that struggled in 2019. The City of Prince Albert failed to sell a single lot in Crescent Acres last year, and only two the year before. It also has another 77 ready to go on the market.

“(If) we reduce them a little bit we’re going to sell and we’re going to see interest,” Ogrodnick said during Monday’s council meeting. “We’re going to see construction. It’s going to be a spiral effect for the city. That’s the point, it’s not only going to bring us taxes, it’s going to get people working. We talked about contractors leaving the city as a result of no work. We’re going to keep those people here.”

Ogrodnick called the decision a “win-win” for the city, and argued that it would keep contractors working and spending money in Prince Albert. He also argued it would not only boost the economy, but increase city tax revenues too.

Mayor Greg Dionne echoed those sentiments. He said Prince Albert’s construction industry is struggling, and city council needed to do something to boost it.

The price reduction in Crescent Acres is just one of many changes council made to help the industry, he argued. At the same meeting, council also voted to renew the Building Our Tax Base Program, which allows nearly all multi-unit commercial developments to apply for a two-year tax abatement.

“You’ve got to look at this as a package,” Dionne said during the meeting. “We could do nothing and just (watch) our market crashing. We could do nothing and say it’s not our problem, but it is our problem. It’s our people and we want to put them back to work.”

Dionne said large contractors he’s spoken with aren’t thrilled with the price reduction, but weren’t going to complain because they were pleased with the Building Our Tax Base Program renewal.

However, not all councillors view the decision as a win for Prince Albert. Both Ward 2 Coun. Terra Lennox-Zepp and Ward 3 Coun. Evert Botha voted against the proposal. Lennox-Zepp said she was concerned the reduction would hurt developers for forcing them to decrease the price of commercially owned lots.

Botha, who was the most vocal dissenter, said the private developers he spoke to aren’t happy with the proposal, and would rather let the City keep their deposits instead of watching their property values drop.

“In a relatively flat market we’re discounting these properties to below the market averages, when the properties held by private developers are difficult to move,” he said during the meeting. “If we keep discounting the prices here we’re going to set a precedent on any other development we have, whether it’s 77 properties to the south or properties up on the West Hill, when we eventually get there, where people are going to be expecting the city to reduce the prices on these properties after three to four to five years. People could be holding back on building properties waiting for a better deal.”

Botha argued that council shouldn’t rely on the construction industry to boost Prince Albert’s economic prospects. Without a larger and more diverse industrial sector, he said, the city will struggle.

“We can’t keep discounting properties in the community in the hope that we’re going to grow the economy,” he said. “We’ve been fairly flat because we don’t have industry. WE don’t have new business.”

Botha added that he hopes the new PAREDA board will be able to help the city attract new industries.