Municipal governance experts say city should have given residents more time to consider property purchase from Signature Developments

The site of a proposed recreation centre that will house two new hockey rinks and an indoor pool. -- Michael Oleksyn / Local Journalism Initiative Reporter / Daily Herald

Municipal governance experts say the City of Prince Albert should have given residents more time to consider a recent $6.5-million purchase of 18-acres of land in the city’s southeast corner.

Council approved the purchase by a 5-4 margin after giving residents four days public notice that the matter was coming up for a vote.

Ken Rasmussen, a professor of public management at the Johnson Shoyama Graduate School of Public Policy, called that a “significantly unusual” decision, and worries residents aren’t fully aware of the implications.

“There should be some expectations (for public consultation), given the magnitude of these kinds of decisions and what the implications are,” Rasmussen explained. “It’s one thing if you’re selling a back lot or buying 10 feet of property. It’s another thing entirely if you’re planning this massive mega-development.”

The projects defenders, including Mayor Greg Dionne said the development will help generate tax revenue for the City. Those funds will be badly needed to help cover the City’s portion of the $60-million price tag for building the new aquatic and arenas recreation centre.

However, Rasmussen said touting a project’s benefits isn’t enough. City council needs to make sure it’s in the best interest of all city residents.

“You want to make sure you’re achieving all of the city’s goals and serving all of the city, not just the people who stand to make money from the project,” he said.

Rasmussen added that he’d prefer to see the City of Prince Albert adopt a similar process the City of Regina used to build the new Mosaic Stadium. The building proposal not only went through extensive public consultation; it was also the subject of an all candidates mayoral debate during the city’s 2012 municipal election.

“If you look at the process here in Regina over the stadium, and all of the multiple models and various community discussions and all the rest that went into that, that’s the kind of process that probably would have been appropriate,” he said.

However, there are risks to waiting on public consultation before making a decision. Joe Garcea, a University of Saskatchewan political science professor who specializes in municipal governance, agreed with Rasmussen that the public should have been given more notice. However, he said a referendum or vote on the project may not be the best bet either.

His primary concern is Signature Developments, who plan on turning the area into an entertainment and recreation hub.

“Private capital is very sensitive to community conflict,” Garcea explained. “If it feels a community conflict is going to delay matters, they’re going to take their money and they’re going to go and invest it somewhere else. It’s not (an opportunity) that sites there forever and says, ‘well, when you guys are ready and you’ve done your deliberations and you’ve got unanimous consent, then we’ll do business.’”

Garcea said the four day window was be “too tight a period” and would make it difficult for opponents of the plan to mount an effective opposition campaign. However, he also said there is no way to make everyone happy, and with the COVID-19 pandemic crippling the provincial economy, it’s understandable that both Signature Developments and Prince Albert city council would want to start work as soon as possible.

“There is no magic formula for doing these things efficiently, effectively, and being able to satisfy all the potential stakeholders, including the ratepayers,” he said. “The question is, rather than best practices, what are some of the ways you can minimize some of the obstacles and controversy that will invariably arise? There are pros and cons no matter what you do.”

Garcea said Prince Albert residents should look down the road to Saskatoon to see what happens when too much consultation stalls development. He pointed to the River Landing area, which has seen plenty of planning but little development over the past decade, as the prime example.

If a developer pulls out, Garchea said it could be years before another one comes along who is willing to take the risk.

“There’s a menu of issues that invariably emerge with every project of this nature,” he said. “I would defy anyone to show me anywhere where a project like this was not controversial in some way, shape, or form.”

Saskatoon began an $81.5-million redevelopment of the area in 2008, but the project came crashing down a year later after the developers missed a payment deadline in October.

Fast forward to 2019 and Saskatoon city council is debating whether to return some of that land to civic groups, like the Riverside Business Improvement District, while other land parcels are still in the proposal stage.

The StarPhoenix reports that sales of city-owned property are on hold while Saskatoon city council considers building a new arena and convention centre in the area. In July, Baydo Development Corp announced plans to build Saskatoon’s tallest building in parcel Y.

Saskatoon’s former city planner told the CBC in May 2019 that parcel Z was likely going to become a high-rise condo.

Nothing unusual about property price tag say real estate experts

The timing of the vote wasn’t the only thing that raised eyebrows when the City revealed the proposal in June. Some councillors balked at the $6.5-million price the City paid for the 18-acre property, but real estate experts there’s nothing unusual about the cost.

“It’s a high visibility area,” said John Doucette, a commercial real estate agent with 11 years experience in the Prince Albert market. “To me, the price didn’t shock me. It really different.”

Doucette said the amount of traffic that goes by is one of the biggest factors that determine the price of commercial real estate. He said buying a parcel that’s already fully serviced with water and sewer hook ups would also increase the cost.

While agricultural or residential land may be cheaper, Doucette said it can be time consuming and costly to get that land rezoned as a commercial development. He said there’s no set timeframe for how long that could take, but at least six months wouldn’t be unreasonable.

In some cities, the time and expense associated with zoning applications has forced some developers out of the market. In Saskatoon, the process has become so heated that at least one developer vowed to not go through with it again until the process improves, the StarPhoenix reported.

Real Estate experts say commercial market is significantly different than the residential one, and although the numbers may have been surprising, they weren’t out of the ordinary if the developer had a strong plan in place.

“We are a small town, and big numbers are shocking when you see them,” one Prince Albert real estate agent said. “You figure, ‘how in the hell did this go for that kind of money?’ Again, somebody’s obviously done their research. If there’s a grand plan, then those numbers can make sense.”

All residential real estate agents contacted by the Daily Herald declined to comment on the record due to the disparities between the residential and commercial market. Outside experts, such as instructors at the UBC’s Sander School of Business or the Westman Centre for Real Estate Studies at the University of Calgary, declined interview requests because they didn’t feel they had the knowledge to talk about the Prince Albert real estate market.

Jason Yochim, the CEO of the Saskatchewan Realtors Association, said commercial real estate sales are typically driven by logic and business decisions, while residential real estate transactions are typically more emotional, which makes it difficult to compare the two.

Like Doucette, he said zoning, traffic, and water and sewer services would all factor into the price of a commercial property. He also said he’s not surprised the sale was a controversial one.

“I don’t envy council in this,” he said. “You do have voices of constituents and a lot of different opinions, and a lot of different ideas as to what’s best. You have to sort through that knowing when you make a decision, you will have people who are upset as well as pleased. It’s never an easy path.”

Although Yochim is more familiar with the residential side than the commercial side, he said city council would have a hard time finding a bank to loan them money if the decision didn’t make sense.

“They’re at risk if it was overvalued,” he explained. “The banks are at risk if they haven’t had a proper evaluation, appraisal and sale price.”

However, city officials didn’t have an appraisal done before the issue was sent to city council for a vote. City Manager Jim Toye said appraisals are typically only conducted on properties with a list price, and this property didn’t have one.

“On this particular piece of property it’s a willing buyer, willing seller,” Toye explained. “Certainly, we did have some discussions with the owner about what the price was going to be, and this is the price that we came up to. We thought it was fair market value, and that’s what the two parties decided on.”

Toye said they did a comparison with similar properties the city sold for nearly $300,000 an acre a few years ago. They felt this property was a premium site, and ideal for the needs they were looking for.

He added that both the developer and the city wanted to get going on the project as soon as possible.

“It’s a very exciting time for the city,” he said. “We can look back and say ‘was that the proper price at this particular time?’ We think it is, and anyone else purchasing property in that particular area will be probably paying very, very close, or maybe more, than what we paid per acre. Time will tell, but … city administration and city council did approve this and we’re moving forward.”