Councillor Says Canadian Tire Deal Not As Good As Original Deal

Although full details have not been released of the deal between the City of Moose Jaw and Canadian Tire to create a retail development on 11.95 acres of land presently leased by the Moose Jaw Exhibition Company discussion at Monday evening’s Council meeting revealed the City is set to net less in 2020 than initially negotiated in 2016.

In discussion prior to Council ratifying the agreement Councillor Brian Swanson asked questions about the reduced sale price, land commission, increased costs infrastructure costs to the City and the reasoning about tax concessions the deal will entail.

Councillor Swanson asked about the increase cost of $400,000 to the City to service the land in the final agreement versus the original 2016 agreement. The estimated cost of infrasture the City must pay is $2.4 million which is $400,000 more than the $2 million original estimate, he said.

Under pubicly released financial terms by the City of the deal Canadian Tire is to purchase the land from the City for $3.172,125 including off-site levies and the City s to fully service the land for $2,484,000. No other terms of the deal have been publicly released.

“Normally when there is a land deal like the Grayson Industrial Park…as long as you conform to the Bylaws you can build what you like it does not cross our desks,” Councillor Swanson said, adding the deal had crossed Council’s desks due to tax and other concessions.

The tax concessions being afforded Canadian Tire as part of the deal were not revealed but Councllor Swanson expressed concerns the deal would grant concessions for a retail store to relocate to a development where there tax concessions.

“We are facilitating the relocation of retailers in Moose Jaw (from a tax paying property) for a tax exemption,” he said, adding the tax concession “defies logic.”

“It concerns our deal because there are many concessions…to facilitate tax paying properties to be relocated to places where there are tax exemptions…it does not demonstrate the City’s best side.”

Canadian Tire’s proposed retail development is to be in the southeast corner of land leased to the Moose Jaw Exhibition Company - MJ Independent Photo

Although it was not specifically stated which stores would be relocating to the development Canadian Tire owns a number of stores incliuding Sport Check and Marks Work Wearhouse.

In a later response Mayor Fraser Tolmie mentioned the Town and Country Mall which houses Sport Check raising the potential that retail outlet will be moving into the new retail development.

“It is not for City Council to interfere with business…we have been in contact with the Mall owners…this deal was being worked on prior to them taking this property over…we will continue to work with the Mall owners and see investment in the Mall,” Mayor Tolmie said.

Another major concern raised by Councillor Swanson is that the City will be receivving less than the original selling price the last Council had decided at their final meeting in October 2016. At that time he said the original selling price agreed to was $316,000 per acre but the 2020 deal was $265,000 per acre.

“The delay was not on the part of the City,” he said.

Mayor Tolmie said there were many hurdles which had to be cleared to make the deal with Canadian Tire work.

“This is one deal this Council inherited and yes there were delays with bureaucracies and delays with the (Moose Jaw) Exhibition (Company)…delays with restrictions due to the burrowing owls,” Mayor Tolmie said adding it had to be done to so “when the property is sold there are no repurcussions.”

Councllor Swanson asked why he could not as an elected official see the reasons why the the servicing cost of the land was now $2.4 million and not the long time estimate of $2 million.

“I have some concerns there is an increase in expenses to the City and I am not able to look at those,” he said.

City manager Jim Puffalt said the City does not pubicly release all details of land sales to the public so as to protect the City’s ability to negotiate.

“Land sales is something we do not put out to the public…it interferes with our ability to do land sales,” Puffat said. “The costs are reasonable…it is a fair and reasonable deal with the purchaser.”

Councillor Swanson mentioned two changes to the original 2016 agreement to the final one ratified by Council that being the City was suppose to share the cost of traffic controls with Canadian Tire but now the City must pay the total cost. No dollar amount was mentioned how much this would cost the City to additionally service the land.

Another new cost was the City had to pick up the entire land sale commission cost of $132,000 when originally the commission was to be evenly split between the City and Canadian Tire. City po;icy dictates the purchaser assume the total land sale commission cost.

The changes to the 2016 and present deal means the net proceeds to the City decreases from the original $1.3 million to $668,000 “almost half of the original deal…on the most valuable land the City has left for sale…an $886,000 difference.”

Councillor Swanson said he had other concerns about how Canadian Tire had initially acquired the land which had not previously been up for sale with no other bidders have the opportunity to express an interest in the land.

Mayor Tolmie stressed the City had worked hard to make a final deal with Canadian Tire.

“I want to say this we have been working hard on this deal…we have reached out to Canadian Tire to get this deal done…they are a big player,” he said, adding Canadian Tire as a billion dollar corporation has numerous properties but the deal with Moose Jaw was “one of the fastest deals they have been able to work on and it is a positive” development for the City.

Councillor Swanson asked about the tight timeline the City has to have the infrastructure ready for Canadian Tire, Septmeber 30th, and if that meant the possibility the City would start work on the infrastructure without full payment for the land. He was told that was something which could potentially happen but there were built in safeguards to protect the City if Canadian Tire did back out of the deal.

Another problem raised was the deal with Canadian Tire “greatly decreased the value” of the 21.4 acres of land directly north of the property they were purchasing.

Councillor Swanson said they did this by having the ability to dictate restrictions on what could be developed in the north property and the final concept they had presented to the City restricted the site lines to the northern property, Councillor Swanson claimed.

Mayor Tolmie said he had no concerns about the site lines as there was access to the north property either through extending the service road to it and there ws access on Diefenbaker Drive running to the hospital.

“I don’t think you can see through Superstore or other large retailers, Mayor Tolmie said.

At the present time it is unknown when Canadian Tire will start construction of the retail development after the City completes the infrastructure work but through a confidential and trusted City Hall source MJ Indpendent has learnt further details of the Canadian Tire deal. Those details include the retailer has up to two years to start construction and up to four years to complete construction once they take full control of the property.

Council approved the deal with Canadian Tire in a 6 - 1 vote with Councillor Swanson opposed.