More Costs Revealed From Failed Carpere Deal

Another cost of the collapsed land sale deal between Carpere Canada and the City was revealed at Council and this time it is external legal fees which are in the tens of thousands of dollars.

The City is out a further $48,557.56 in unrecoverable external legal fees after the deal’s collapse.

“A month ago I inquired what costs for external legal services have been incurred with respect to the Carpere proposal for the South East Industrial Park (SEIP)? that referrig to the proposed land sale that fell through and the answer is the total cost of legal services related to the Carpere proposal for the South East Industrial Park is $48,557.56,” Councillor Brian Swanson said reading out an answer to an enquiry.

Under the deal, described at the time as “the largest land deal in the history of the City of Moose Jaw” by Mayor Fraser Tolmie, Carpere Canada was to purchase 780 acres of land in the SEIP.

The land deal would have seen the British Columbia based Carpere Canada purchase the land for a cost of $10,000 per acre plus the establishment of a Development Levy of $49,600 per acre with the price held at this level for ten years. The sale would allow Carpere Canada to exclusively develop the SEIP.

With the demise of the sale to Carpere the City had to find an additional $2.7 million in order to pay for the City’s share of the water line to the proposed $700 million SaskPower natural gas fired electrical generation plant for the SEIP. The estimated cost of the 400 mm waterline is $9.27 million with SaskPower picking up 70 percent or $6.489 million with the City on the hook for the remaining $2.78 million.

Under terms of the deal with Carpere Canada the development company had pledged to pay 50 percent or $1.37 million of the waterlines’ cost.

The water line is being upsized in a capacity larger than needed by SaskPower because the extra capacity will provide water service to potential industrial purchasers without having to go back and install a new water line at a later date as the SEIP secures tenants.

At the March 9, 2020 Council meeting Mayor Fraser Tolmie said paying $2.78 million for the additional water line capacity made sense as the City would be able to market the park as shovel ready to any potential purchaser.

“In conversations with anybody they want site preparation. They want this to be readily available for them to come in. Even the Province and the Federal Government when they are talking about grants…they are looking for shovel ready projects. What happens and continually happens in this community is that we are never ready or prepared and that we are always scrambling,” Mayor Tolmie said at the March 9th meeting to justify the cost.

The upsized water line was approved at th March 9th meeting in a 6 - 1 vote with Councillor Swanson the lone vote opposed.